Senator introduces bill to end PBM drug rebates in commercial plans

A new Senate bill would ax PBM rebates in commercial plans. (Pixabay)

The Trump administration has made moves to eliminate drug rebates in federal payers, and now, thanks to a bill introduced in Congress on Wednesday, such contracts in the commercial sector are also on the chopping block. 

Sen. Mike Braun, R-Ind., introduced the Drug Price Transparency Act alongside two other bills aimed at lowering drug prices. The bill looks much like the Department of Health and Human Services’ plan: prohibit pharmacy benefit managers from receiving rebates from drug companies and instead require that such discounts be passed directly on to consumers. 

Braun also introduced legislation to clear the Food and Drug Administration’s approval backlog and boost transparency. 

“I’m offering solutions to address rising healthcare prices by adding transparency to our drug pricing, clearing the backlog on pending drug applications at the FDA and providing oversight and accountability in the healthcare industry,” Braun said. 

RELATED: PBMs launch counterattack following Trump administration’s plan to end drug rebates 

HHS unveiled its plan to nix the rebates in January, and in the proposed rule it said it intended to eliminate anti-kickback protections to rebates negotiated by PBMs and instead offer the protections to point-of-sale discounts. 

HHS Secretary Alex Azar said when the agency’s proposal on the matter was unveiled that he hoped Congress would follow suit to ensure it was extended nationwide. And even if legislators hadn’t acted, the administration expected that its rule would have ripple effects beyond Medicare. 

JC Scott, president of the Pharmaceutical Care Management Association, a PBM trade group, said in a statement that the legislation doesn’t target the true culprit in high drug prices: pharmaceutical companies. 

“The legislation appears to do absolutely nothing to address the root cause of the problem: the high list prices that only the drug manufacturers have the power to set,” Scott said. “Despite drug manufacturers’ rhetoric, their pricing strategies are unrelated to the rebates they negotiate with PBMs.” 

The bill comes on the heels of a House hearing in which executives at some of the largest drug companies backed eliminating drug rebates