Wyden, Crapo Release Legislative Framework to Address PBMs, Prescription Drug Supply Chain

Washington, D.C. – Senate Finance Committee Chair Ron Wyden, D-Ore., and Ranking Member Mike Crapo, R-Idaho, today released a bipartisan framework that the committee will use to pursue legislative solutions to modernize and enhance federal prescription drug programs, with the goal of reducing drug costs for patients and taxpayers.

“For years, drug pricing middlemen like pharmacy benefit managers have been engaging in practices that are driving up the cost of prescription drugs and clobbering American families at the pharmacy counter,” Wyden said. “The Finance Committee is responsible for federal health programs that spend billions on prescription drugs each year, and we have a responsibility to seniors, working families and taxpayers to ensure these programs are strengthened and updated to keep up with the health care system of today. I look forward to working on a bipartisan basis to craft legislation this summer that will take on the worst practices by drug pricing middlemen and ensure that the prescription drug supply chain is pulling in the same direction: more competition and lower costs for patients and taxpayers.” 

“Some of the most life-saving medications remain out of reach for far too many working families and seniors,” Crapo said. “We need a bipartisan, all-of-the-above approach to modernization and transparency that empowers consumers, plans, providers and pharmacies to make informed, cost-effective and clinically appropriate decisions.  I thank Senator Wyden for working with me to identify ways to improve prescription drug access and affordability, and look forward to discussing potential consensus-based solutions with our colleagues.”

The framework comes following a Finance Committee hearing last month to examine pharmacy benefit managers’ (PBM) practices, and the impact on costs to patients and taxpayers. The document outlines four key challenges currently facing federal prescription drug programs, including:

• Misaligned incentives that drive up prices and costs
• Insufficient transparency that distorts the market
• Hurdles to pharmacy access
• Behind-the-scenes practices that impede competition and increase costs

The framework also identifies potential policy solutions that will address these challenges, including:

• Delinking PBM compensation from drug prices to align incentives for lower costs
• Enhancing PBM accountability to health plan clients to drive cost-cutting competition and produce better choices for beneficiaries
• Ensuring discounts negotiated by PBMs produce meaningful savings for seniors
• Addressing and mitigating practices that unfairly inflate the prices patients and government programs pay for prescription drugs
• Modernizing Medicare’s “Any Willing Pharmacy” requirements to improve options and access for seniors
• Increasing transparency to foster a better understanding of how financial flows across the prescription drug supply chain impact government health care programs

The full document may be found here.

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