The Focus Of Federal Proposals On Pharmacy Benefit Management ' 118th Congress

• Published date: 18 March 2024
• Subject Matter: Food, Drugs, Healthcare, Life Sciences, Food and Drugs Law
• Law Firm: Ankura Consulting Group LLC
• Author: Mr Jeffrey Low and Kristie Robertson

Over the past several years, legislators across the country have focused their attention on Pharmacy Benefit Managers (PBMs) due to concerns expressed over a variety of industry practices. To date, there has been legislation adopted in every state related to PBM practices (e.g., Michigan - Pharmacy Benefit Manager Licensure and Regulation Act; Florida - The Prescription Drug Reform Act) and a number of proposals at the federal level, however, no federal legislation has passed. There are 28 proposed bills for the 118^th Congress; 15 bills have been brought forth in the House of Representatives and 13 bills in the Senate. Most of these bills have bipartisan co-sponsorship. Recently, on February 20, 2024, 39 state attorneys general sent a letter to Senate and House leaders pushing for federal legislation to be enacted. They specifically identified the DRUG Act (H.R. 6283), Protecting Patients Against PBM Abuses Act (H.R. 2880), and the Lower Costs, More Transparency Act (H.R. 5378) and remarked they "believe several of the proposals they convey would be an important step toward reforming this industry. With stronger federal law, state and federal regulators can work together to better meet their shared responsibility to hold PBMs accountable and improve the country's health care system overall."

Below is a summary of the common topics currently drafted in the 28 proposed bills and highlights of the DRUG Act, Protecting Patients Against PBM Abuses Act, and the Lower Costs, More Transparency Act.

Key Themes Across Legislative Action

The 28 proposed bills vary in their content and the programs they address. Depending on the bill, modifications were suggested for Medicare, Medicaid, Employee Retirement Income Security Act (ERISA), and/or the Affordable Care Act (ACA) health plans. The following are common themes collectively viewed across the proposed legislation:

Greater Transparency to Health Plans and Regulators

• PBMs to report to health plans and regulators on drug-related financials and utilization, such as
  • Rebates
  • Remuneration received (e.g., pharmacies manufacturers)
  • Administration fees/Bona Fide Services fees
  • Direct or indirect remuneration
  • Specific Pricing parameters: Average Wholesale Cost (AWP) Wholesale Acquisition Cost (WAC), and other methodologies used by PBMs
  • Enrollee level reporting: Cost-sharing amounts, Out-of-Pocket amounts, utilization statistics
  • Utilization and cost by drug category/class
  • Copay Assistance Programs
• Reporting of...