Health care costs have been in sharp focus of legislative attention during the beginning of the 118th Congress. In particular, the Senate Health Education Labor and Pension (HELP) Committee convened recently to resume a markup of several notable legislative items like the Pharmacy Benefit Manager Reform Act. The House Energy and Commerce Subcommittee on Health had a hearing focused on Pharmacy Benefit Managers (PBMs), and the full House Energy and Commerce Committee held another mark up on this topic recently. Furthermore, the HELP Committee called several pharmaceutical CEOs to testify on insulin prices. Even the House Oversight Committee has been examining the issue of late.
While some of these legislative actions are well-intentioned, NTU urges Congress to push for transparency as a first important step forward, while avoiding undue or excessive government intervention in free markets. Despite the temptation to utilize tools such as mandates to effect change, this carries a risk of merely shifting costs around the system, instead of providing greater benefits to patients and taxpayers.
Congress should avoid further price control actions for insulin and the use of federal bans on business practices. As NTUF has extensively written, including a paper released earlier this year, allowing plan sponsors to make decisions with better information would provide greater benefits without introducing more burdens onto pricing processes from the federal government onto private sector actors. Likewise, NTU has also strongly opposed recent direct price control activity in the pharmaceutical space, including within the Inflation Reduction Act. Price controls often result in scarcity due to the change in economic incentives. And while insulin may be another starting point, it won’t be long before more drugs are targeted by anti-free market legislators. Congress should find a path forward on these hot button issues that preserves and strengthens consumer choice and innovation in health care.
Past recommendations on PBMs from NTU and its research arm, NTU Foundation, include:
Enhanced transparency on PBM spread pricing for stakeholders operating in the federal health programs (namely, plan sponsors in Part D and Medicaid managed care, state governments running Medicaid programs, and pharmacists serving beneficiaries in both programs);
Additional reporting from PBMs on the use of specialty pharmacies in Medicare and Medicaid, addressing a current gap in CMS reporting requirements;
Efforts to strengthen public-private negotiations over PBM contracts, so that plan sponsors and state governments are getting the most ‘bang for the buck’ with PBM services;
Hearings and consultations with PBM industry disruptors, to determine if any legislative or regulatory barriers stand in the way of additional competition in the PBM industry;
Exploring the reverse auction model for PBM contracts that has successfully worked to reduce costs for several states, to see if such a model is applicable within Medicare or for private entities; and
Implementing a long-standing, unimplemented CMS recommendation that PBMs address potential conflicts of interest in their Pharmacy and Therapeutics (P&T) committees.
Sorting out the intricacies of prescription drug pricing, which have often been made worse by government intervention, will take time and great care. NTU is at your service in your deliberations.