The Senate Finance Committee has released its plan to reform pharmacy benefit managers.
Sen. Ron Wyden, D-Oregon, the committee's chair, and Mike Crapo, R-Idaho, its ranking member, unveiled the framework on Thursday, and it aims to address four key concerns from PBM critics: a lack of transparency, barriers to access for pharmacies, "behind-the-scenes practices" that can hinder competition and poorly-aligned incentives that increase drug costs.
The policy plan follows a hearing in late March that aimed to find solutions to rethink the PBM sphere. Executives from the industry's three largest players—CVS Caremark, Express Scripts and Optum Rx—were absent from that hearing, though they will join a Health, Education, Labor and Pensions Committee hearing in early May centered on insulin and drug pricing.
Wyden said in a statement that he looks forward to releasing legislation this summer.
“For years, drug pricing middlemen like pharmacy benefit managers have been engaging in practices that are driving up the cost of prescription drugs and clobbering American families at the pharmacy counter,” Wyden said.
The framework includes a number of policy recommendations to address the four central challenges, any of which could make it into an eventual bill. The senators suggest boosting transparency to gain a better understanding of how pharmacy pricing impacts government programs, and ensuring that discounts that PBMs negotiate generate "meaningful savings" for seniors in Medicare.
The framework also recommends delinking compensation for PBMs from drug pricing to better align incentives, pushing PBMs to be more accountable to health plan clients in decreasing costs through greater competition and mitigating practices PBMs use to "unfairly inflate" drug prices.
Practices that fall into that category include spread pricing, which has come under fire in multiple states, as well as the traditional rebate models.
“We need a bipartisan, all-of-the-above approach to modernization and transparency that empowers consumers, plans, providers and pharmacies to make informed, cost-effective and clinically appropriate decisions," Crapo said.
In addition to the pressure on the Hill, the Federal Trade Commission has launched an investigation into PBMs' business practices.