The Senate Finance Committee is considering a measure to open up drug negotiating and pricing for government monitoring.
The committee has added an amendment to a health reform package that would require pharmacy benefit managers (PBMs) to report drug pricing, competition and how much savings are being passed on to consumers.
Sen. Maria Cantwell (D-Wash.), author of the amendment, said she wants to prevent pharmaceutical companies from padding their bottom line at the expense of consumers.
PBMs serve as the middlemen between health insurance plans (including both private health insurance plans and Medicare Part D), pharmaceutical manufacturers and pharmacies. They manage most of the prescriptions filled in the United States, but are the only unregulated area of the health insurance industry, Cantwell said.
According to Cantwell, PBMs make closed-door deals that undermine cost-control measures and limit consumer choice.
PBMs are supposed to negotiate the best possible deal on drug pricing for large customers, such as Medicare or large private insurers with the lower cost eventually benefiting consumers. But some PBMs have merged with large pharmacy and mail-order chains, creating conflicts of interest, she said.
Sen. Max Baucus (D-Mont.), the committee chairman, said he "strongly approves" of Cantwell's amendment, which would require PBMs to share basic information with appropriate government agencies on prices, savings and negotiations. The reported information would remain confidential under the proposed amendment.
Mark Merritt, president of the Pharmaceutical Care Management Association, opposes the provision saying it would force PBMs to disclose information that would give manufacturers and drugstores more leverage in drug-price negotiations.
"PCMA categorically rejects the notion that PBM disclosure is budget neutral," Merritt said.
In 2007, the Congressional Budget Office estimated the Cantwell provision could increase drug costs as much as $10 billion. The Federal Trade Commission has warned that PBM disclosure of such information would undermine the ability of consumers to find affordable coverage options.
Thirty states have considered and rejected legislation similar to the Cantwell amendment, according to Merritt.
"Many steps remain in this debate," Merritt said. "PCMA will continue to work with policymakers in both the House and Senate and any conference committee to make them aware of the unintended consequences associated with PBM disclosure."