Guest column submitted by U.S. Senator Mike Crapo
When Medicare’s prescription drug benefit, Part D, was created 20 years ago, the program was intended to protect Idaho seniors’ ability to access the pharmacy of their choice. Oversight and enforcement of these protections, however, have fallen short of that promise, forcing far too many independent pharmacies to close up shop.
For countless Idahoans, those independent community pharmacies serve as critical frontline health care providers, offering vital medications and services from a trusted, local source. Unfortunately, certain practices of pharmacy benefit managers (PBMs)—companies that negotiate drug benefits and therefore have a significant behind-the-scenes impact in determining drug costs and patients’ access to medication—jeopardize the viability of the crucial community pharmacy model.
Before the August state work period, the Senate Finance Committee, where I serve as the lead Republican, took a major step toward addressing the challenges community pharmacies face across our state. With an overwhelming bipartisan majority, we voted to advance the Modernizing and Ensuring PBM Accountability Act. This legislation takes aim at a wide range of problematic PBM practices, from inappropriate patient steering to opaque and unreasonable network contracts.
With respect to steering, PBM-owned specialty pharmacies have come to dominate that market, enabling pharmacy benefit managers to game and distort dispensing rules to divert a growing portion of prescriptions away from independent pharmacies and toward their own business affiliates. Our bill helps to curb this practice by establishing clear criteria for drugs that PBMs can subject to these narrow and ever-changing dispensing restrictions.
Our legislation would also boost oversight through reporting requirements and ensure any pharmacy can access a Part D plan or PBM’s special dispensing rules at any time. Additionally, we would require PBMs to report regularly on the share of prescriptions dispensed through their affiliated pharmacies, which would help to identify and act against inappropriate patient steering, which violates the letter of the law.
To deter unreasonable contracting practices, our legislation would standardize and streamline the so-called quality measures that PBMs include in their pharmacy contracts as a pretext for massive reimbursement reductions. Under our bill, pharmacies would also gain access to standardized information on how PBMs calculate the reimbursement for any given claim, undercutting efforts by some of these companies to skirt the rules. The federal agencies overseeing all of these requirements would also need to report to Congress and taxpayers on any and all enforcement and oversight activities undertaken. These regular updates would bring accountability to the officials tasked with enforcing the law.
Finally, our legislation would end spread pricing in our federal programs, including Medicaid, closing off an avenue for PBMs to profit off of low and declining reimbursement for independent pharmacies. Together, these widely supported measures go a long way toward ensuring a meaningfully competitive and vibrant pharmacy marketplace for seniors and Idahoans more broadly.
Although this bill makes good progress, we have more work to do. As Committee Chairman Wyden and I recently wrote in a joint letter, we view pharmacy access as a key goal for additional policies moving forward. At a press conference in Twin Falls this August, where I had the opportunity to talk directly with local health providers, I stressed that our legislation is a massive step toward empowering local, independent pharmacies to provide Idahoans the best, most affordable care possible. I look forward to moving forward with comprehensive and meaningful reforms that will empower consumers, plans, providers and pharmacies to make informed, cost-effective and clinically appropriate decisions, ultimately modernizing federal prescription drug benefits and driving down costs for Idahoans.
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