Pharmacy benefit manager reform is included in a larger-than-anticipated healthcare package, but the PBM lobby is fighting the legislation at the eleventh hour.
Lawmakers appear to have agreed to a lame-duck healthcare package which, in addition to PBM reform, will include key program extensions.
As of last weekend, the package included an increase to the Medicare physician fee schedule of 2.5% for one year, bonuses to alternative payment models and a reauthorization of the SUPPORT Act for dealing with the opioid crisis.
PBM policies will be used as budgetary offsets. The legislation would ban spread pricing in Medicaid, ensure Part D plan sponsors delink PBM fees from the price of a drug and includes other transparency requirements.
“The end-of-year health care package accompanying the Continuing Resolution has morphed into a massive 400-page bill that includes provisions that would undermine the role that PBMs play in lowering costs and providing choices for employers in the prescription drug marketplace,” said the PBM trade lobby, the Pharmaceutical Care Management Association (PCMA), in a statement Dec. 16. “The health care provisions included in the latest draft, as reported in the media, risk increasing costs for health plan sponsors, like employers and labor unions, patients, and families, and hiking up premiums for seniors.”
The PCMA says the delinking policy will increase premiums in Part D by $13 billion and will benefit drug companies.
There is overwhelming bipartisan support for PBM reform, but pockets of Republicans that closely support President-elect Donald Trump oppose the continuing resolution, even as Trump in a press conference today spoke of his desire to “knock out the middlemen.”
“How much does this monstrosity cost?," said Joe Grogan, an associate director of health programs for the Office of Management and Budget for Trump in his first term, in a post on X, referring to reports of new agreement on the healthcare package. He said Trump was elected to stop Washington’s “insane business as usual” approach toward spending.
“And now when the admin is about to come in and get this country moving again in the right direction they are going to be saddled with a bunch of exorbitant craziness that only a corruptocrat or an idiot would love,” Grogan added.
Grogan then served as assistant to the president and director of the domestic policy council for Trump before joining the Paragon Health Institute as board chair last year.
Rep. Chip Roy, R-Texas, said the the pharma lobby will be the package’s biggest winners and that PBMs should not be scapegoated as the only problem.
Other prominent Republicans, however, can finally picture successful industry reform within their grasp.
“House and Senate GOP leaders have an immediate opportunity to enact critically needed PBM reforms to ensure big drug rebates go to Medicare patients as intended,” said former Speaker of the House Newt Gingrich.
“Big insurance is fighting like hell to keep bipartisan PBM transparency and accountability reforms out of the CR because they’re putting profits over patients,” said Rep. Buddy Carter, R-Georgia.
One of the final sticking points of the package is whether to include key provisions from the Improving Seniors’ Timely Access to Care Act, a bill that modernizes prior authorization in Medicare Advantage, reported Axios.
Electronic prior auth has widespread support, including from payers like Humana. It would codify and expedite prior auth decisions and ensure electronic prior auth is the norm.
Republicans and Democrats have negotiated for weeks on what to include in the healthcare package. Democrats wanted to include an extension of the Affordable Care Act enhanced subsidies, and Republicans hoped to reverse staffing minimums for nursing homes, according to reports.
Staff writer Emma Beavins contributed to the story.