NCPA Shows Support for New Bill Requiring PBM Investigation

May 4, 2021
Gabrielle Ientile

Bill S.1388 would require the FTC to examine recent merger activity of PBMs and how it may be affecting patients and independent community pharmacies.

The National Community Pharmacists Association (NCPA) today expressed their support for the reintroduction of a bill that aims to target the lack of competition in pharmacy benefit manager (PBM) activities and boost the vitality of independent pharmacies.1

S.1388, named the Prescription Pricing for the People Act of 2021, would require the Federal Trade Commission (FTC) to study PBMs and how their recent merger activity may be affecting patients and small business independent pharmacies, and provide Congress with effective policy recommendations.1,2

According to the bill, the FTC has 1 year following the enactment of S.1388 to report to Congress whether PBMs:3

  • Charge payers a higher price than the reimbursement rates offered to pharmacies
  • Steer patients for competitive advantage, including a retail, mail-order, or other type of pharmacy that the PBM has an ownership interest
  • Audit or review proprietary data, including acquisition costs, patient information, or dispensing information, of pharmacies not owned by the PBM and use the data to increase revenue or market share
  • Use formulary designs to increase the market share of higher cost prescription drugs, or depress the market share of lower cost prescription drugs

The FTC is also tasked with examining competitive trends within the health care supply chain and how companies and payers assess the benefits, costs, and risks of contracting with PBMs or other intermediaries, among other responsibilities.

The bill was reintroduced by Sens. Chuck Grassley (R-Iowa), ranking member, Senate Judiciary Committee, and Maria Cantwell (D-Wash.). The legislation is also cosponsored by Sens. Marsha Blackburn (R-Tenn.), Richard Blumenthal (D-Conn.), Thom Tillis (R-N.C.) and Joni Ernst (R-Iowa).

In an April 29 letter to the senators, Karry K. La Violette, senior vice president of government affairs, director of the Advocacy Center, NCPA, highlighted the organization’s support of legislation and their willingness to2 “work with bill sponsors…to strengthen language that would shed light on how PBMs are affecting prescription costs and patient choice and bring needed transparency to the pharmaceutical space.”

La Violette pointed to NCPA’s recent advocacy work focused on the anticompetitive vertical integration of the CVS-Aetna merger, as well as their established concerns about PBM anticompetitive practices.

“Momentum is growing to reform and rethink antitrust enforcement in the United States,” NCPA CEO B. Douglas Hoey, pharmacist, MBA, RPh, said in a news release.1 “Independent pharmacists have been pressing for this for many years. There’s a severe lack of competition in the PBM market, and it is driving up the cost of prescription drugs. Unfortunately, patients, employers, and small business pharmacies suffer as this consolidation has so far gone largely unchecked by regulators and been permitted to grow.”

You can peruse the full legislation here.

References

  1. NCPA Applauds Senate Bill Requiring FTC Review of PBM Mergers. News Release. NCPA; May 4, 2021. Accessed May 4, 2021. https://ncpa.org/newsroom/news-releases/2021/05/04/ncpa-applauds-senate-bill-requiring-ftc-review-pbm-mergers.
  2. La Violette KK. NCPA Support Letter for S. 1388. NCPA. April 29, 2021. Accessed May 4, 2021. https://ncpa.org/sites/default/files/2021-05/NCPA-Support-Letter-for-S.1388.pdf.
  3. Grassley C. Prescription Drug Pricing for the People Act, S.1388. 117th Congress. https://www.grassley.senate.gov/imo/media/doc/117sx_-prescription_drug_pricing_for_the_people_act.pdf.pdf.