U.S. Senator Mark Pryor today introduced legislation that will protect consumers from corporate middlemen, called Pharmacy Benefit Managers (PBMs). PBMs drive up the cost of prescription drugs, can require consumers to use certain pharmacies, and share their sensitive health information to third parties for marketing purposes. In addition, his bill stops PBMs from gimmicks that delay reimbursement to community pharmacies.
Pryor said anti-competitive practices among health care industry players, including PBMs, are an often-overlooked component of skyrocketing health care costs. His legislation, the Pharmacy Competition and Consumer Choice Act, S.1058, prohibits PBMs from mandating consumers use a specific pharmacy and requires a PBM to notify the plans sponsor before selling or using claims data.
In addition, the legislation increases transparency by requiring a PBM to disclose information related to manufacturer rebates and discounts they are negotiating on the plan's behalf, exclusivity arrangements with drug companies, as well as other practices the industry employs to increase profits. During a 2009 Senate hearing, an Arkansas pharmacist noted a case where the PBM charged a small, self-insured employer $126 for an employee's prescription for Simvastatin, a cholesterol-lowering medicine. The pharmacy was paid $14.
"Americans already pay far more for their prescription drugs than individuals in other countries. We don't need middlemen adding to the problem," Pryor said. "My bill ensures that patients can at least choose which pharmacy to shop at and it increases transparency to prevent PBMs from overcharging patients."
Pryor said his legislation would also benefit community pharmacists who are often hurt by abusive practices employed by PBMs. Like Medicare Part D, this bill would require plans to pay pharmacies within 14 days for clean prescription claims. PBMs can delay payments so they make money on the "float." This provision would help assure that pharmacies have good cash flow and can remain in business. Additionally, the legislation would stop PBMs from unfairly penalizing pharmacies for insignificant typographical errors and instead keep the focus of any audits on the pursuit of fraud.
"Pharmacists in rural communities provide a convenient and important service in states like Arkansas. That's why I'm working to keep doors open at community pharmacies and ensure that consumers have a choice of where to shop," Pryor said.