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.
Under an upcoming proposed rule, PBMs who contract with Medicaid would have to disclose the prices they pay for the drugs, a provision meant to limit price arbitrage, a practice in which PBMs charge insurers , employers or government programs for drugs more than actually paid. If finalized, it would be the first time PBMs are required to disclose actual drug prices under federal law. The regulation will also make special drugs administered in hospitals eligible for discounts.
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“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,” Health and Human Services Secretary Xavier Becerra said in a statement.
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’s Express Scripts subsidiary, CVS Health subsidiary CVS Caremark and UnitedHealth Group subsidiary OptumRx held 80% market share by 2022, according to the latest data from the Institute of Pharmacy Channels. Products.
Pharmacy benefit managers have become a target of federal and state policymakers as prescription drug prices rise and the industry has been criticized for not sharing the savings PBM generates from deals. translation with pharmaceutical companies. In addition to this CMS action and the Federal Trade Commission’s ongoing investigation, several bills are being passed by Congress that would create limits on PBMs.
The House Energy and Commerce Committee is scheduled to vote Wednesday on the Transparency PRICE Act of 2023, which unanimously moved out of a subcommittee last week. Among the provisions of the bill is a requirement that PBMs disclose prescription drug spending to employers.
The Senate Health, Education, Work and Pensions Committee passed the Pharmaceutical Benefits Manager Reform Act of 2023 earlier this month, which would ban price arbitrage and mandate the transfer of discounts for customers.
Last week, the FTC expanded its one-year investigation into the business practices of a pharmaceutical benefit manager 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, alleging the companies overcharge Medicaid for prescription drugs.
Some PBMs have responded to this pressure by voluntarily adopting new internal policies. 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.
