A key Senate panel announced it will consider more policies to regulate pharmacy middlemen and ensure patients aren’t paying more than insurers do for medications.
The package crafted by Senate Finance Chair Ron Wyden (D-Ore.) and Mike Crapo (R-Idaho) is slated to be marked up on Nov. 8, and includes policy on a broad range of health care priorities, including substance abuse and mental health care, and extensions to provider pay. The pharmacy benefit manager regulations build on a separate package of PBM regulations that the panel passed in July.
The most impactful proposal would allow the Department of Health and Human Services to designate a list of so-called discounted drugs. Medicare beneficiaries taking those drugs would see their share of the cost based on the net price, rather than the list price, under the new proposal.
For example, if a drug has a $100 list price, and its net price is $50, patients who have to pay 25% coinsurance would pay $12.50 under the new policy, instead of $25 under the current program.
Only certain kinds of drugs could be designated as discounted: those for which drugmakers already offer rebates of at least 50% of the list price, and those in certain categories. The eligible categories include drugs for chronic conditions, specifically anti-inflammatories that are inhaled corticosteroids; bronchodilators, anticholinergic agents; bronchodilators, sympathomimetic agents; respiratory tract agents; anticoagulants; and cardiovascular agents.
There are also broader protections that would force plans to limit patients’ out-of-pocket costs to the net prices for the products, after patients meet their deductibles. It doesn’t require cost sharing to be tied to net price, however.
Both policies would go into effect in 2028.
Another policy would ensure that biosimilar drugs that are significantly cheaper than the original biologics get better placement on PBMs’ formularies. It’s an effort to ensure biosimilars cost patients less than the original drug.
The protections are designed to incentivize patients to take the less expensive alternative, even if a plan makes more money off of rebates from the maker of the original biologic. If the net price is low enough for the original biologic, plans could potentially get an exception.
In the past, proposals to pass rebate savings along to patients have stalled because it would cause premium increases. A Senate aide said that the PBM policies overall save the federal government money, though one policy that requires some biosimilars to be cheaper for patients is still under review.
The prior package passed in committee this summer included a measure to prohibit PBMs from getting any income outside of service fees, and prohibits those service fees from being related to drugs’ list prices.
Other provisions include a bill from Sens. Catherine Cortez Masto (D-Nev.) and Thom Tillis (R-N.C.) to require PBMs to send annual reports to Medicare insurance plans about their rebate and price negotiations, a policy that would ban PBMs from charging Medicaid more than they pay for drugs (a practice called spread pricing), and a mandate for the Department of Health and Human Services to outline acceptable performance measures for pharmacies.
Other provisions include expanding the number of mental health and substance use providers in Medicare, expanding the use of social workers and occupational therapists, funding primary care physicians to deliver behavioral health care, improve access to mental health services via telehealth, and requiring Medicare Advantage plans to keep their provider directories up to date.
Reporter: Rachel Cohrs, Washington Correspondent