Financial Regulation News

Sens. Cantwell, Grassley sponsor legislation targeting pharmacy benefit managers


U.S. Sens. Chuck Grassley (R-IA) and Maria Cantwell (D-WA) are sponsoring two bills that seek to hold pharmacy benefit managers (PBMs) accountable for opaque and often deceptive practices that contribute to high drug prices for consumers.

PBMs were formed in the 1960s to process claims and negotiate lower drug prices with drug makers. Today, PBMs administer prescription drug plans for hundreds of millions of Americans, with three PBMs controlling nearly 80 percent of the prescription drug market.

One of their bills is the Prescription Pricing for the People Act (S. 113), which requires the Federal Trade Commission (FTC) to examine the effects of consolidation in the PBM industry on pricing, as well as other potentially abusive behavior by PBMs.

Further, it instructs the FTC to provide policy recommendations to Congress to improve competition and protect consumers. It is cosponsored by U.S. Sens. Marsha Blackburn (R-TN), Richard Blumenthal (D-CT), Thom Tillis (R-NC), Tommy Tuberville (R-AL), Mike Braun (R-IN), Shelley Moore Capito (R-WV), and James Lankford (R-OK).

“Year after year, the price of prescription drugs has skyrocketed, far outpacing inflation and leaving patients and taxpayers footing the increasingly outrageous bill. I’ve worked to battle price increases on many fronts, but we can’t truly restore sanity to drug prices without addressing pharmacy benefit managers. PBMs, the industry middlemen, operate in the shadows and drive up prices for consumers. These bills bring about greater transparency to their industry and prevent unfair or anticompetitive practices that harm consumers,” Grassley said.

The other bill is the Pharmacy Benefit Manager Transparency Act (S. 127). This bill bans deceptive unfair pricing schemes, prohibits arbitrary claw backs of payments made to pharmacies, and requires PBMs to report to the FTC how much money they make through spread pricing and pharmacy fees. It is cosponsored by U.S. Sens. Cindy Hyde-Smith (R-MS), Mike Braun (R-IN), Jerry Moran (R-KS), Thom Tillis (R-NC), Jon Tester (D-MT), and Shelley Moore Capito (R-WV).

“For too long, Americans have been left in the dark while PBMs – the mysterious middlemen – manipulate prescription drug prices. We need to hold PBMs accountable for skyrocketing drug prices. With these bipartisan bills, I’m continuing to fight for accountability and transparency in the drug market so we can shine a light on unfair practices and make sure patients get a fair deal on the medications they need,” Cantwell said.

The bills are supported by several organizations, including the Biotechnology Innovation Organization (BIO).