Pharmacy benefit managers (PBMs) are a crucial part of the healthcare industry, providing services that can help guide employers in designing and managing their prescription drug benefit programs. While these benefits are welcome in the industry, PBMs have been scrutinized for their lack of transparency and accountability, especially when it comes to pricing practices. To address this, a bipartisan bill aiming to reform PBMs was recently approved by the U.S. Senate Committee on Commerce, Science and Transportation.
PBM Reform Challenged, But Gaining Momentum
The Pharmacy Benefit Manager Transparency Act contains several provisions aimed at increasing transparency and accountability among PBMs.
The bill seeks to eliminate:
- Spread Pricing: A practice in which pharmacies are reimbursed less by a PBM than what health plans are charged.
- Clawing Back Payments: A practice in which PBMs retroactively lower reimbursement rates to pharmacies.
The bill also includes the following requirements:
- PBMs must disclose drug costs and reimbursements to health plans.
- PBMs must distribute the entirety of any rebate to the health plan or payer as well as reveal the expenses and compensation related to pharmaceuticals to the health plan.
While the fate of the bill has yet to be determined, the current momentum for PBM reform suggests that it could see further action. Last year, the committee passed the same bill, but it was never brought to the Senate floor for a formal vote.
The Pharmacy Benefit Manager Transparency Act represents an important step toward increasing transparency and accountability among PBMs. While the bill faces opposition, the potential benefits for employers and consumers cannot be ignored. As the debate over PBM reform continues, it is important for all involved to remain engaged and informed throughout the process.
Reach Out To an Advisor
We understand that regulatory changes can be difficult to navigate, especially when it comes to employee benefits. As PBM reform talks heat up, request a copy of your PBM contract to assure that the provisions listed in the bill are being adhered to. Also, it will be important to ask for all pricing information, including any and all payments to a carrier, broker or administrator. Carriers will often withhold a part of rebates in order to “offset” admin fees.
Want to learn more about PBM reform? Reach out to a trusted RCM&D advisor for more on the proposed reform bill and what it could mean for your business.