Senate Finance Committee introduces PBM reform and prescription drug cost legislation

NCPA June 21, 2023

On June 14, and largely as a direct result of NCPA’s efforts, a bipartisan group of senators introduced the Patients Before Middlemen (PBM) Act, which aims to decouple PBM compensation from drug price and utilization, aligning incentives to lower prescription drug costs for Medicare Part D beneficiaries. "This legislation will put a stop to one of the most egregious practices driving up the price of prescription drugs in Medicare: pharmacy benefit managers getting paid based on the price of a drug," said Senate Finance Committee Chair Ron Wyden (D-Ore.), in a statement last week. Wyden co-sponsored the bill with Sens. Mike Crapo (R-Idaho), Robert Menendez (D-N.J.), Marsha Blackburn (R-Tenn.), Jon Tester (D-Mont.), and Roger Marshall (R-Kan). Specifically, the PBM Act would prohibit PBM compensation based on the price of a drug as a condition of entering into a contract with a Medicare Part D plan, and provides that service fees will not be connected to the price of a drug, discounts, rebates, or other fees. The bill would also create an enforcement mechanism requiring PBMs to pay the secretary of Health and Human Services any amount that exceeds the designated service fees.