Pharmacy benefit managers will have to disclose the prices they negotiate for prescription drugs for Medicaid under a proposal the Centers for Medicare and Medicaid Services announced Tuesday.
According to an upcoming proposed rule, PBM Contracts with Medicaid would have to disclose the price they pay for the drug, a provision meant to limit price differences, a practice in which PBMs charge insurers, employers or their plans. the government gives more drugs than they actually pay. If finalized, it would be the first time PBMs are required to disclose actual drug prices under federal law. The regulation will also make specialty drugs administered in hospitals eligible for discounts.
“With today’s proposed rule, we are driving unprecedented efforts to increase prescription drug cost transparency, be a good steward of the Medicaid program, and protect financial integrity.” of the program. This proposed rule will save money for both the state and the federal government,” said Secretary of Health and Human Services. Xavier Becerra said in a new release.
The Pharmaceutical Care Management Association, which represents PBM, said: “We look forward to working with CMS in the coming months to address the root causes of the issues they identify—namely, the high prices set by pharmaceutical companies”.
According to CMS, the draft regulation would require annual reporting on prescription drug prices to allow CMS and states to ensure Medicaid pays the appropriate amount for the drug and receives a discount from the drug manufacturer.
Cigna subsidiary Express Scripts, CVS Health subsidiary CVS Caremark and UnitedHealth Group subsidiary OptumRx hold 80% of the combined market share by 2022, according to the latest data from the Institute of Pharmaceutical Channels.
Pharmacy benefit managers have become a target of federal and state policymakers as prescription drug prices have risen and the industry has been criticized for not sharing the savings PBMs generate from deals. translation with pharmaceutical companies. In addition to this CMS action and an ongoing action Federal Trade Commission investigatesSeveral bills are being passed by Congress that would create limits on PBM.
The House Energy and Commerce Committee is expected to vote on Wednesday on the Transparency PRICE Act of 2023, which agreed to move forward out of a subcommittee last week. Among the provisions of the bill is a requirement that PBMs disclose prescription drug spending to employers.
Senate Committee on Health, Education, Work and Pensions erase The Pharmacy Benefits Manager Reform Act of 2023, earlier this month, would ban price arbitrage and mandate the passing of discounts to customers.
Last week, the FTC expanding its five-year-old exploration into the pharmaceutical benefit manager’s business practices to include PBM-affiliated group purchasing organizations. Government agencies also have targeted PBMs. For example, Ohio and other states sued Express Scripts, Humana Pharmacy Solutions and Prime Therapeutics in March, accused the companies of overcharging Medicaid for prescription drugs.
Some PBMs have responded to this pressure by Voluntary adoption new internal policy. Express Scripts and OptumRx, for example, launched transparent payment plans last month that will pass along drug-maker rebates and charge payers the same as pharmacies.
Lauren Berryman contributed to this story.