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Health care trade organizations react to Senate legislation

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Article

Finance Committee approved wide-ranging legislation this week.

congress panorama of the capitol of the united states: © Jason Yoder - stock.adobe.com

© Jason Yoder - stock.adobe.com

Senate proposals could have good effects on accountable care organizations (ACOs) and pharmacy benefit managers (PBMs), or possibly major pharmaceutical makers, depending on various analyses by health care industry groups.

The National Association of ACOs (NAACOS) and PBM trade associations Transparency-Rx and Pharmaceutical Care Management Association (PCMA) issued statements responding to various elements in the pending legislation titled “The Better Mental Health Care, Lower-Cost Drugs, and Extenders Act.” On Nov. 8, 2023, the Senate Finance Committee voted 26-0 to send the bill for consideration by the full chamber.

ACO incentives

NAACOS President and CEO Clif Gaus, ScD, praised Committee Chair Sen. Ron Wyden (D-Oregon), who was among the legislators commenting on incentives for alternative payment models as a wise investment for the U.S. health system.

“NAACOS thanks the committee for including an extension of these important incentives in today’s package,” Gaus said in the statement. “We appreciate the recognition that stronger incentives are needed and look forward to continuing to work with lawmakers on finding the best policy in both the short and long term.”

PBMs react

The Finance Committee legislation would de-link PBM Medicare revenues from drug prices, a policy supported by the Transparency-Rx, a nonprofit trade association that launched in September.

“Because the legislation only impacts Medicare, this represents a necessary, but not sufficient, first step to meaningful reform of the PBM industry,” Director Joe Shields said in statement published after the hearing.

“For too long, big PBMs have protected a broken system that hides profits and raises prices for employers and patients,” Shields said. “But local businesses that use transparent PBMs save an average of $20 per prescription when compared to other PBMs. The differences are clear and the time for action is now.”

Shields suggested Congress pair the Finance Committee bill with SB 1339, legislation known as the "Pharmacy Benefit Manager Reform Act," coming out of the Senate Health, Education, Labor, and Pensions Committee, to reform PBM practices in the commercial market.

“We look forward to further partnering with Congress on these important measures to establish a fair and competitive marketplace,” Shields said.

Transparency-Rx announced it supports other policies that federal and state lawmakers are considering. According to the association, these include:

  • Banning spread pricing.
  • A 100% pass-through model for discounts.
  • Reforming group purchasing organizations tied to big PBMs.
  • Technology for sharing data among patients, insurers, pharmacists, and other stakeholders.

Additional PBM response

PCMA this week issued statements about the Senate Finance Committee and new PBM legislation, the “Delinking Revenue from Unfair Gouging Act,” or DRUG Act, in the House of Representatives.

Depending on the estimate, the new federal regulations will lead to a financial windfall worth $10 billion or more to Big Pharma drugmakers, while raising prices for consumers, according to PCMA.

“This year, Congress has held an unprecedented number of hearings targeting PBMs and considered a multitude of narrowly focused bills targeting only our industry, which leads us to ask: What is Congress trying to solve for? The legislation would do nothing to lower drug prices and improve affordability for patients,” said the PCMA statement about the Senate Finance Committee vote. “Given that PBMs are the only check against drug companies’ pricing power, we urge members of Congress to refocus on legislation that promotes more competition and would actually lower drug prices for Americans.”

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