Drug affordability crisis and Pharmacy Benefit Managers focus of new legislation

Independent experts are concerned about the practice of using Pharmacy Benefit Managers (PBMs) with high prescription costs in the United States.

The PBM Sunshine and Accountability Act would establish new, public reporting requirements for PBMs.

The legislation was introduced by Virginia’s U.S. Rep. Abigail Spanberger to help tackle the prescription drug affordability crisis, hold PBMs accountable and lower drug costs. She leads the legislation with Diana Harshbarger of Tennessee, Raja Krishnamoorthi of Illinois and Mariannette Miller-Meeks of Iowa.

PBMs took in an estimated $28.05 billion in gross profits as consumer drug costs skyrocketed in 2019. The three largest PBMs, CVS Caremark, Express Scripts and OptumRx, control nearlly 80 percent of the prescription drug market. Yet, pharmacists do not see the rebates and discounts received by the powerful PBMs, so consumers are unable to learn more about how the PBMs benefit from rising drug prices and increasing out-of-pocket costs.

“During this moment when PBMs hold tremendous power across the American pharmaceutical industry, we need to know if the behaviors of these middlemen are contributing to higher drug prices for American consumers,” Spanberger said. “By increasing reporting requirements, our PBM Sunshine and Accountability Act would help shed more light on the murky world of PBMs. Our bipartisan bill would give Congress more tools to dig into their practices — and it would give the American people more information about how PBMs might be manipulating the sticker prices of medications. In this way, we can pursue reforms that will lower drug costs for the Virginians I serve.”

The legislation would require PBMs to report to the U.S. Department of Health and Human Services (HHS) their aggregate rebates, administrative fees and other revenue received from drug manufacturers and healthcare entities. Their reporting would be made public at least once a year to improve the ability of patients, health policy researchers, and other stakeholders to gauge the effectiveness of their PBMs. The increased transparency would allow Congress to take further action to lower drug costs. 

“For far too long, PBM middlemen have exploited a lack of transparency and created conflicts of interest in ways significantly distorting competition at consumer expense – and where there’s mystery, there’s margin,” Harshbarger said. “My PBM Sunshine and Accountability Act will finally require PBMs to report critical financial information on their operations, which will enable patients and providers to see which PBMs are adding value, and which ones are printing their own money. This legislation will shine a bright light on the ways that PBMs avoid regulation and siphon off countless dollars from our supply chains, and equip policymakers to prevent these practices to save healthcare dollars.”