Sens. Tom Carper (D-Del.) and Chuck Grassley (R-Iowa) introduced legislation Thursday aimed at providing the federal government with more power to oversee pharmacy benefit managers (PBM) amid continued bipartisan scrutiny over the companies’ role in drug pricing.
The two lawmakers introduced the PBM Oversight Act of 2023, which would give the Centers for Medicare and Medicaid Services (CMS) the authority to oversee PBM decision-making.
PBMs operate as intermediaries within the pharmaceutical industry. These businesses negotiate with drug manufacturers for discounts and influence what drugs health insurance companies will cover. The drugs that a health insurance plan will cover are known as formularies.
The bill would also require that PBMs submit “detailed information” to CMS every year that includes documentation of their interactions with recommendation committees, groups that decide on what will be included in a formulary.
“By holding Pharmacy Benefit Managers accountable and establishing much-needed oversight of their practices, we will bring American patients back to the forefront of our medical system,” Carper said in a statement.
PBMs would also be required to submit information on what drugs were decided on and a justification for that decision.
The Government Accountability Office would then be tasked with studying this information and reporting its findings to Congress.
“Pharmacy Benefit Managers, which operate in the shadows between drug companies and insurance plans, use complex and opaque schemes to push up the prices of drugs for consumers,” Grassley said. “This bill shines a light on these practices and prioritizes patients over PBM profits.”
Lawmakers on both sides of the aisle have scrutinized PBMs amid efforts to lower drug prices in the U.S. The heightened attention on PBMs has spurred furious dueling ad campaigns, with several health care sectors calling on Congress to tamp down on the middlemen.
PBM associations have in turn run ads pushing back on reform efforts and launched a record-setting lobbying push.
There are currently a handful of other bills in Congress all aimed at reforming how PBMs operate.
Grassley also previously introduced the Pharmacy Benefit Manager Transparency Act with Sen. Maria Cantwell (D-Wash.), which would task the Federal Trade Commission with examining PBM business practices.
Grassley recently called on fellow Republicans to rally behind PBM reform.
“We’ve got to pass legislation. We can’t put up anymore with … middle people, between the companies and the consumer, without knowing what they’re doing, particularly when they’re raking in a lot of taxpayer money,” he said during a June event hosted by health and pharmaceutical publication Stat.