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Congressmen Gonzalez and Collins Introduce Bill to Lower Drug Costs at Point of Sale

May 24, 2018
Press Release

WASHINGTON – Today, Congressmen Vicente Gonzalez (TX-15) and Doug Collins (R-GA-09) introduced H.R. 5958, the Phair Pricing Act of 2018, to lower the cost of prescription medications for patients in the Medicare Part D program.

Pharmacy benefit managers (PBMs) and prescription drug plan (PDP) sponsors negotiate with drug manufacturers allegedly to control the costs of prescription drugs and reduce insurance premiums. Unfortunately, this does not seem to be happening. Savings from negotiations in the form of rebates do not benefit the intended recipient, namely patients. According to the Centers for Medicare and Medicaid Services (CMS), PBMs and PDP sponsors often use these pharmacy rebates and price concessions to pad their profits instead of lowering the price patients pay for medications. This is against the stated purpose of rebates and price concessions, and health insurance premiums continue to rise. 

“Our prescription drug system is in dire need of reform,” Congressman Gonzalez said. “I am happy to join Congressman Collins in introducing the bipartisan Phair Pricing Act, which will ultimately put us on the path to making price concessions, rebates, and any other reduction in cost transparent, above board, and in tune with the end goal: to reduce the cost for patients. Pharmacy benefit managers and drug companies alike will either fix the broken system themselves, or Congress will fix it for them.”

“Bloated drug costs are one of the biggest barriers to affordable health care,” Congressman Collins said. “Pharmacy benefit managers maneuver in the shadows to block savings from reaching the patients who depend on them to make their medications accessible. I introduced the Phair Pricing Act to ensure that when industry middlemen claim to negotiate lower prices on behalf of patients, patients receive those savings at the point of sale—otherwise, they might not receive them at all.”

The Phair Pricing Act would direct all price concessions, incentive payments and price adjustments between a pharmacy and a PDP sponsor or PBM to be included at the point of sale in order to decrease patients' medication costs. The bill brings transparency to a notoriously complex industry by compelling PBMs to disclose to CMS the fees, price concessions and programs that they employ. This requirement would prevent companies from circumventing CMS regulations by restructuring or renaming their fees.

The legislation would also direct the Secretary of Health and Human Services to establish a working group to determine the quality measures that apply to pharmacy operations. Currently, PDP sponsors and PBMs can arbitrarily impose quality measures on pharmacies, often to maximize their own financial gain and with no apparent benefit to patient care.

“As Congress and the administration address the continued affordability of life changing and often life-saving prescription drugs, we must ensure we focus on seniors living with severe and complex medical conditions that require treatment with specialty medications,” Sheila Arquette, Executive Director of the National Association of Specialty Pharmacy said.“For far too long, these seniors have been shouldering the brunt of fees that threaten continued access to the critical patient care support services these specialty medications require and patients deserve. Today’s bill led by Rep. Doug Collins and Rep. Vicente Gonzalez will change course, protecting access to specialty medications, improving quality, and reducing costs for seniors across the country. The National Association of Specialty Pharmacy (NASP) urges Congress to act on this important bill this year.” 

“This legislation ensures that the savings PBMs negotiate are passed along to patients at the pharmacy counter and not pocketed by these middlemen corporations,” Ted Okon, Executive Director of the Community Oncology Alliance said. “PBMs have been secretly reaping the benefits of discounts and rebates at the expense of cancer patients for too long. We strongly support Representatives Collins and Gonzalez for helping reform this convoluted system so that it helps patients, not middlemen corporate profits.” 

“Patients who face high deductibles and prescription drug costs should be receiving the benefit of all the discounts and rebates that PBMs negotiate, supposedly on their behalf,” Steven L. D’Amato, Executive Director of New England Cancer Specialists said. “This legislation is an important step in the right direction to finally reforming a system that too-often benefits PBM middlemen and not the patients.” 

“NCPA supports the passage of this legislation because it is a welcomed means of providing relief to community pharmacies struggling to run their small businesses, and it also ensures that prescription drug plan sponsors (PDPs) and pharmacy benefit managers (PBMs) pass along savings to patients at the point of sale,” National Community Pharmacists Association CEO, B. Douglas Hoey said. “This piece of legislation provides a solution long sought by NCPA: eliminate retroactive pharmacy fees that contribute to increased out of pocket costs for patients and make it nearly impossible for community pharmacies to run an efficient health care business.”