Bipartisan bill introduced to combat drug middlemen as scrutiny intensifies.

• A bill has been introduced by bipartisan lawmakers to combat the alleged price-inflating practices of drug supply chain intermediaries in the US.
• The objective of the legislation is to reduce expenses for patients in federal healthcare programs and guarantee that community pharmacies receive fair compensation from pharmacy benefit managers.
• The three largest Pharmacy Benefit Managers (PBMs), Optum Rx, Caremark, and Express Scripts, testified at a House committee hearing.

On Tuesday, a new bill was introduced by bipartisan lawmakers to combat the harmful business practices of drug supply chain middlemen, who are accused of inflating prescription medication prices and causing harm to U.S. patients and pharmacies.

The Pharmacists Fight Back Act aims to ensure that community pharmacies are fairly and transparently reimbursed by pharmacy benefit managers (PBMs) while providing care to patients enrolled in federal health-care programs. This legislation would lower health-care costs and give seniors, government employees, active duty service members, and other patients more freedom to choose their pharmacy for their prescriptions.

On Tuesday, Reps. Jake Auchincloss, D-Mass., and Diana Harshbarger, R-Tenn., presented a bill before a House Oversight and Accountability Committee hearing about the drug middlemen's tactics. Executives from three of the largest Pharmaceutical Benefit Managers (PBMs) - Optum Rx, Caremark, and Express Scripts - will testify on allegations that they contribute to rising healthcare costs, as federal scrutiny of their practices intensifies.

The new bill is among many bipartisan initiatives at the federal and state levels to reform Pharmacy Benefit Managers (PBMs), which negotiate rebates with drug manufacturers on behalf of insurers, large employers, and federal health plans. These middlemen also compile lists of medications, known as formularies, that are covered by insurance and compensate pharmacies for prescriptions.

PBMs have been accused of overcharging plans for rebates, underpaying pharmacies, and failing to pass on savings to patients, resulting in $300 billion in revenue being trapped in the middle of the drug supply chain.

Drugmakers are accused by PBMs of setting high list prices for drugs, which they claim protects patients from high healthcare costs.

PBM reform legislation received bipartisan support and passed the House last year, but Congress's failure to include it in a recent spending package has halted its progress.

The FTC is planning to sue Caremark, Express Scripts, and OptumRx, as the Biden administration increases pressure on PBMs amidst Americans' struggles to afford prescription drugs.

The new bill aims to increase transparency in PBM business practices and prohibit spread pricing, similar to earlier legislation.

The bill, led by Auchincloss, is "bigger and tougher" and focuses on pharmacies. The bill is described as the "most comprehensive PBM reform ever introduced at the federal level" in a Tuesday release.

"The bill aims to address the obstacles that prevent pharmacists from succeeding as small business owners and providing clinical and pharmacological advice to their patients. Auchincloss stated this to CNBC. "We're systematically addressing the barriers to that mission …This bill is about pharmacists standing up against corporate greed.""

The bill includes a new pharmacy reimbursement model that primarily focuses on a drug's national average drug acquisition cost (NADAC), which is determined by surveying invoices from pharmacies, manufacturers, and wholesalers.

Auchincloss stated that the bill's reimbursement model is most relevant to generic prescription drugs, ensuring that the actual cost of goods is what the price is based on.

The payment system for pharmacies is intricate and not directly linked to their spending on medications, resulting in confusion over fees and markups added to the original cost of a drug.

The bill includes provisions that mandate PBMs to share 80% of rebates with patients and prohibit certain practices. It would also prevent requiring patients to purchase branded medications when a cheaper generic version is available, encourage patients to use PBM-affiliated pharmacies, and exclude any in-network pharmacy from filling a prescription.

Harshbarger stated that the bill would implement reforms to stop the exploitation of independent pharmacies, make life-saving drugs more affordable for patients, and generate savings for taxpayers.