Politicians have long been discussing the cost of prescription drugs, advancing various policy proposals aimed at lowering drug costs for patients. Some of the proposals have included allowing the Secretary of Health and Human Services (HHS) to negotiate prices for certain drugs, requiring drug makers to provide rebates when the price of medicine exceeds the rate of inflation, and redesigning the Medicare prescription drug benefit to include an out-of-pocket spending cap for beneficiaries.
Prior Congressional Attempts
Now, some lawmakers have been looking to increase oversight and regulation of pharmacy benefit managers (PBMs). Going back to 2019, House Democrats introduced the Elijah E. Cummings Lower Drug Costs Now Act, which would have prohibited PBMs from adding premiums to the cost of drugs for Medicaid beneficiaries.
Then, in 2021, a bipartisan effort to require the Federal Trade Commission (FTC) to study the role of PBMs, was introduced by Senators Chuck Grassley and Maria Cantwell.
Since that time, the FTC has announced its consideration of launching a formal inquiry into PBM practices. Earlier this year, Senator Grassley sent a letter to FTC Chairwoman Lina Khan, urging her to find a consensus on initiating a 6(b) Study into the business practices of PBMs, to examine “competitive concerns within the PBM industry.”
Current Bipartisan Legislation
Then, in April of this year, Senators Jeanne Shaheen and Susan Collins revealed updated focus and policy priorities of the Senate Diabetes Caucus, including encouraging insulin manufacturers to reduce their list prices by ensuring insurance plans and PBMs cannot collect rebates on insulins that roll prices back to 2006 (or equivalent) levels, among other things.
In June 2022, the Senators introduced the Improving Needed Safeguards for Users of Lifesaving Insulin Now (INSULIN) Act. Under the proposed legislation, insulin co-pays would be capped at $35/month or 25% of list price – whichever is lower.
Additionally, the proposal would prohibit insurance plans and PBMs from collecting rebates on insulins, as long as manufacturers agree to cap their prices at the 2021 “net price,” the level patients with a rebate would have paid after the rebate.
The legislation would also ensure that coverage and prior authorization, step therapy, or other medical management requirements are not imposed to limit beneficiary use.
The American Diabetes Association and the Juvenile Diabetes Research Foundation have spoken out in support of the legislation. “Right now, we have a broken system. People with diabetes can pay $300 or more for a vial of insulin, while others in the health system receive discounts of 70% or more,” said Cynthia Rice, JDRF’s Chief Mission Strategy Officer. “The INSULIN Act, being proposed today by Senators Shaheen and Collins, is a critical step forward for the diabetes community.”
What is to Come?
While it’s impossible to predict next steps in the fraught Washington environment, PBMs remain on the radar for many politicians, and they are likely to remain a common component of various prescription drug pricing legislation in the coming months and years.