COA Lauds the Introduction of the Prescription Drug Price Transparency Act

Representative Doug Collins (R, Georgia) has proposed a bill that would increase the transparency of payment methodologies to pharmacies. The Prescription Drug Price Transparency Act (H.R. 1316) was introduced in the House of Representatives on March 2, with the intent of requiring pharmacy benefit managers (PBMs) to disclose their generic drug pricing information.

The Community Oncology Alliance (COA) offered its support for the bill and its co-sponsors. “If passed, the Prescription Drug Price Transparency Act, and other legislation like it, will finally help curb PBM abuses. Increasing PBM transparency and fees will also finally move our country closer to solving rising drug costs,” Ted Okon, executive director of COA, said in a statement.

If the bill is passed, it would require PBMs to provide updates and disclosures on the maximum allowable costs (MAC) on drugs to pharmacies every 7 days and the sources used for making each update. The MAC lists help to determine the generic reimbursements that pharmacies receive.

The bill would also prevent PBM-owned pharmacies from sharing patient information and mandating that patients use their affiliated pharmacies, unless a patient has chosen to fill their prescription at that pharmacy.

COA noted that in recent years, PBMs have introduced new fees that have raised costs, created complex bureaucracies that often denied patients access to necessary medications, and limited patients’ access to certain pharmacies that were not affiliated with a PBM.

The organization also recently produced a report in conjunction with Frier Levitt, LLC, that revealed the effect that PBMs have on community oncology practices and the resulting rise in drug costs.¹The report suggested that PBMs have been collecting both direct and indirect remuneration (DIR) fees as a percentage of drug costs from pharmacy providers through rebates and pharmacy concessions and DIR fees after beneficiaries have received the drugs.

The Pharmaceutical Care Management Association (PCMA), responded that the report commissioned by COA was a “thinly veiled attempt to protect certain oncologists’ profits at the expense of patients and the Medicare program.” The organization, which supports PBMs, stated that DIR fees reduce premiums for Medicare Part D beneficiaries, leading to lower costs for the government.

In a statement, the PCMA suggested that the bill would in fact cut competition and lead to increased prescription drug costs.

“Now is not the time for new government mandates that raise prescription drug costs and undermine competition,” said Mark Merritt, president of PCMA, in a statement.

The PCMA noted that the legislation would ruin the use of the MAC lists, which are significant in containing Medicaid drug costs, and suggested that these lists be strengthened instead of weakened. An analysis conducted by Visante for the PCMA indicated that legislation against MAC could increase the cost of affected generic prescriptions by 31% to 56%.²

The association also suggested that the bill would risk the safety of patients with chronic conditions by undermining their use of mail order pharmacies.

Collins spoke out about the negative practices of PBMs when the legislation was introduced: “PBMs engage in practices designed to boost their own profit margins at the expense of insurers, contracting pharmacies, patients, and—in their relationships with federal programs—taxpayers. The lack of transparency in their operations has allowed them to control the market unjustly, with the result that these companies withhold savings that they have promised to pass on.

“I’m introducing a bipartisan bill to ensure that PBMs update their MAC lists for Medicare Part D, TRICARE, and FEHBP [Federal Employee Health Benefits Program] every 7 days to protect competitive pricing and to preserve pharmacy access and choice for patients. The Prescription Drug Price Transparency Act provides essential oversight to prevent waste, fraud, and the abuse of taxpayer funds, and [it] better protects patient privacy,” he said.

The bill also had suppor from Representative Dave Loebsack (D, Iowa) as the Democratic co-sponsor, as well as from Reps Brian Babin (R, Texas), Rod Blum (R, Iowa), Buddy Carter (R, Georgia), John Duncan, Jr. (R, Tennessee), Cathy McMorris Rodgers (R, Washington), and John Sarbanes (D, Maryland).

“As a pharmacist for more than 30 years, I saw firsthand the distress of families attempting to balance their healthcare needs with their bottom line when the cost of their prescription medications was on the rise and unpredictable,” Carter said in a statement on his support for Collins’ bill. “That is why the Prescription Drug Price Transparency Act is so important. The legislation will provide some light on how PBMs determine the pricing reimbursement of prescription drugs, which will provide greater transparency on how drug prices are set so patients can finally get the truth about drug pricing increases.”

References:

1. Frier Levitt LLC. PBM DIR fees costing Medicare and bene ciaries: investigative white paper on background, cost impact, and legal issues. Commissioned by Community Oncology Alliance. https:// www.communityoncology.org/wp-content/uploads/2017/01/COA_White_Paper_on_DIR-Final. pdf. Published February 1, 2017. Accessed March 23, 2017.
2. Visante. Proposed MAC legislation may increase costs of a ected generic drugs by more than 50 per- cent. Pharmaceutical Care Management Association website. https://www.pcmanet.org/wp-content/ uploads/2016/08/visante-pcma-mac-legislation-study-2015-update.pdf. Published January 2015. Ac- cessed March 23, 2017.