Industry divided over proposed PBM restrictions

WASHINGTON —A bill introduced in the U.S. House of Representatives last month aims to increase requirements for pharmacy benefit managers and has angered PBMs while drawing praise from independent pharmacies.

H.R. 5234, the PBM Audit Reform and Transparency Act of 2010, introduced by Democratic Rep. Anthony Weiner of New York, would forbid PBMs that own pharmacies, or vice versa, from requiring patients to use their pharmacies or providing them with incentives to use them. It also would require them to give pharmacies a 15-day prior notice of audits, offer a written appeals process and limit audit periods to one year, and restrict their ability to share utilization and claims data. In addition, it would place new restrictions on their ability to share utilization and claims data, such as requiring them to notify health plans and insurers of their intent to share the data and disclose the name of the organization with which data are being shared, as well as allowing individual beneficiaries to opt out.

Independent pharmacy lobbying group the National Community Pharmacists Association heralded the bill. “This legislation would begin to rein in many of the dubious and opaque PBM practices that pad their burgeoning profits at the expense of patients, plan sponsors and local pharmacists,” NCPA president and Arlington, Texas, pharmacy owner Joseph Harmison said. “If this bill is enacted, PBMs would find it much harder to pad profits through hidden costs, to steer patients away from their pharmacy of choice and toward PBM mail-order pharmacies, and to punitively audit pharmacies. Ultimately, this proposal is about fixing the complex, broken system that PBMs have put in place to make billions of dollars while leaving patients and health-plan sponsors paying the bill and scratching their heads.”

The NCPA has shown little affection for PBMs, saying they have transformed “from simple claim processors to mammoth drug middlemen” that operate without transparency or regulation and whose profits have increased several times over the past decade as a result, in part by collecting rebates from drug manufacturers in exchange for favoring certain drugs over others.

Not surprisingly, the Pharmaceutical Care Management Association, the country’s largest lobbying group for PBMs, attacked the bill and the NCPA’s role in it, albeit without referring to the NCPA by name. “Unfortunately, the independent drug store lobby continues to push an agenda that increases prescription drug costs for consumers and payers and limits efforts to root out fraud, waste and abuse,” a statement released by the organization read. “Given the increased focus on controlling healthcare costs, we can’t afford to let anyone, including the independent pharmacy lobby, thwart congressional efforts to fight pharmacy fraud.”

The PCMA said PBMs provided such services as incentives for the use of generic drugs, electronic prescribing and mail-order pharmacies that improved safety, savings and access for payers and patients, and said that use of PBM services in Medicare Part D reduced the program’s expenditures by 43%. “Since the key to access is affordability, payers and policy-makers alike should explore broader use of PBMs’ cost-savings tools and reject approaches that make prescription drugs more expensive,” the PCMA’s statement read. According to a letter the group sent to Department of Health and Human Services secretary Kathleen Sebelius and Sen. Charles Grassley, R-Iowa, the bill would mandate that PBMs contract with pharmacies currently banned from participating in federal programs, oppose the Office of the Inspector General’s ability to prosecute pharmacists charged with a felony, require a lengthy waiting period to remove a pharmacy from a network despite “irrefutable” evidence of fraud and exempt independents from routine accreditation requirements to sell durable medical equipment.