A bipartisan House bill would require discounts for drugs in Medicare’s prescription drug program to be applied when the medicine is bought at the pharmacy, an effort to make sure that customers get the full discount instead of a cut going to insurers and drug middlemen.
The Phair Pricing Act of 2018 introduced Thursday builds on parts of a blueprint President Trump released this month to tackle drug pricing. It highlights a lack of transparency in the negotiations over rebates to lower prices for medications in Medicare Part D, the program’s prescription drug plan.
One of the bill’s sponsors criticized drug middlemen, called pharmacy benefit managers, for not sharing the full benefits of rebates with patients.
“Pharmacy benefit managers maneuver in the shadows to block savings from reaching the patients who depend on them to afford their medications,” said Rep. Doug Collins, R-Ga.
He sponsored the legislation with Rep. Vicente Gonzalez, D-Texas.
“Pharmacy benefit managers and drug companies alike will either fix the broken system themselves, or Congress will fix it for them,” Gonzalez said.
A PBM manages the drug plan for an employer or union-sponsored health plan. It negotiates with drug makers for rebates to lower costs for some Medicare Part D plans.
But critics say the consumer doesn’t get enough of the benefit of the rebate, which is applied after the sale, because the PBM and the insurer take a cut.
The bill would direct “all price concessions, incentive payments and price adjustments” to be included when a senior buys the drug from the pharmacy.
“The bill brings transparency to a notoriously complex industry by compelling PBMs to disclose concessions and programs that they employ,” according to a release on the bill.
Trump’s drug pricing blueprint bashes PBMs and insurers for rebate agreements.
Health and Human Services Secretary Alex Azar has hinted that the administration could eliminate rebate agreements for Medicare drugs and instead establish fixed price discounts. The discounts would be applied at the point of sale.
But experts say it is too early to tell whether the move to fixed price discounts would lead to lower prescription drug prices.
