Old Dominion News

Senators’ DRUG Act would enable PBMs to charge flat fees for their services by “delinking” the service fee from the list price of a drug 

WASHINGTON, D.C.—U.S. Senators Jon Tester (D-MT), Roger Marshall (R-KS), and Tim Kaine (D-VA) today introduced their bipartisan Delinking Revenue from Unfair Gouging (DRUG) Act to lower drug costs and prevent massive Pharmacy Benefit Managers (PBMs) from price gouging consumers. The Senators’ bill would prohibit PBMs from making more money on high-cost drugs than they do from lower-cost drugs to even the playing field for patients.

“When Montanans are having to decide between buying a bag of groceries and picking up their life-saving prescriptions, we’ve got a real problem,” said Tester. “For too long, massive PBMs have been price gouging consumers with bad incentives and hidden fees, and it’s about time we hold these massive corporations accountable. That’s why I worked with my colleagues on a bill to lower drug costs and inject some transparency into the market once and for all, and I won’t stop fighting until we get it passed.”

“PBM’s business model revolves around payments as a percentage of the cost of medicine. This is a perverse incentive that favors prescription drugs with higher list prices,” Senator Marshall said. “Worst of all, PBMs discriminate against generic or lower-cost brand competitors. This ultimately leaves patients, the most important group in all of health care, with less choices and higher costs. Our bipartisan legislation delinks administrative fees paid to PBMs from the price of medicines, and I’m proud to partner with my colleagues to advance this legislation. Congress needs to pass our bill and put patients over profits.”

“Too many Americans aren’t able to afford critical medications like insulin because of the high costs of prescription drugs,” said Kaine. “One way we can help lower drug prices is by removing incentives for pharmacy benefit managers to prefer medications with high list prices. This bill would do just that and is a step in the right direction to helping more Americans afford the lifesaving medications they need.”

Instead of incentivizing PBMs to buy and sell the most expensive drugs by linking their service fees to the list price of drugs, this bill would only allow PBMs to charge a flat fee for their services. Right now PBMs make less money from lower-cost drugs and they often get left off formularies and aren’t covered by insurance. This bill seeks to disrupt that incentive and lower drug costs by delinking PBM’s revenue streams from the list price of drugs.

Original source can be found here.