Drug Industry Middlemen Fees Targeted for Savings in Senate Plan

The Democratic and Republican heads of the influential Senate Finance Committee Thursday released a framework showcasing how they want to change how pharmaceutical industry middlemen operate.

Sens. Mike Crapo (R-Idaho) and Ron Wyden (D-Ore.) pointed to “misaligned incentives” for pharmaceutical benefit managers—namely that many reap higher fees when drug prices increase—and incomplete disclosure requirements as drivers of rising drug prices in the US.

The pair say they’re working to ensure seniors on Medicare in particular see the benefit of rebates that PBMs get for employers and health plans—including Medicare—in their negotiations with drugmakers.

“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 in a statement.

The framework includes a list of policy solutions, such as:

• disconnecting PBM compensation from drug prices to align incentives for lower costs;
• enhancing PBM accountability to health plan clients;
• ensuring discounts negotiated by PBMs produce meaningful savings for seniors;
• addressing and mitigating practices that unfairly inflate the prices patients and government programs pay for prescription drugs;
• modernizing Medicare’s “Any Willing Pharmacy” requirements to improve options and access for seniors; and
• increasing transparency to foster a better understanding of how financial flows across the prescription drug supply chain affect government health care programs.