APCI Advocacy Quarterly: A Federal Update
PBMs remain in the hot seat as we push into the back end of 2023. While there have certainly
been distractions (think Speaker ouster and subsequent speaker votes) and time and attention necessarily spent elsewhere – such as funding for Israel and Ukraine as well as the funding of our government – PBM reform remains a priority for both chambers. While there are more than 40 PBM and/or drug pricing bills in Congress, APCI is focusing attention and working on four bills that appear to be on the table as we move into year end.
Speaking of year end, the finish line is in site and with so much PBM activity, it will be important for APCI members to be on the lookout for calls to action as end of year bill packages are put together. With approximately three more legislative weeks remaining, APCI and its team at Arent Fox will continue to engage with leadership and members of Congress to ensure the voice of community pharmacy is being heard and a keen eye is paying paid to any policy advancing through the respective chambers.
In addition to engaging on the bills explained below, APCI continues to meet with congressional leaders and others to advocate for comprehensive PBM reform. Below is a snapshot on some of APCI’s PBM reform advocacy initiatives in the past several months.
APCI has long advocated for updates to the Department of Justice and The Federal Trade Commission’s merger guidelines. The draft guidelines released by the joint agency are much improved and APCI commended the joint agencies on their work. However, in our written comments APCI also advocated for more aggressive guidelines that take into account unfair methods of competition when assessing mergers and acquisitions by large insurers/PBMS. Members can read more about APCI’s comments here.
APCI Sponsors 3 Axis Report on Drug Pricing Variability
APCI and 3 Axis Advisors released a report on the role PBMs play in setting drug prices. The report found, contrary to claims made by large PBMs, that it is PBMs who are overwhelmingly setting drug prices at the pharmacy counter – and PBMs who are creating massive variability in those drug prices. Members can read more about the study on the APCI website.
Though just released this September, the report has already garnered significant
attention including an article in Managed Healthcare Executive and a piece on Drug Channels, where author Adam Fein stated, “Here's another must-read report. Antonio Ciaccia at 3 Axis Advisors/46 Brooklyn uncovers how PBMs manipulate prescription reimbursement to retail pharmacies. As the report reveals, PBMs establish brand-name and generic prescription prices in unpredictable ways that don't appear related to acquisition costs. For example, the analysis revealed that the same PBM set five different prices for the same drug, at the same pharmacy, on the same day. The reimbursement on this day ranged from $9.30 perprescription to $96 per prescription. Fair warning: This is a dense and challenging report. However, its conclusions and data demonstrate significant problems in the retail drug channel.”
The study was also referenced by transparent PBM SmithRx in a blog post titled “Why Pass-Through Clients Of Traditional PBMs Lose Big”.
APCI also worked with stakeholders on the development of a 1-pager which members can share with the Senators and Congressional representatives that highlights the findings of the study. The 1-pager (really a 2-pager because it was impossible to fit all of the hard hitting highlights into a single page) can be found here: https://www.apcinet.com/Portals/0/news/2023a/APCI-3AxisAdvisorsStudy_one%20pager_final.pdf.
APCI Makes Its Mark on Explosive House Oversight Hearing: Part 1
On September 19, the Committee on House Oversight and Accountability held a hearing on The Role of Pharmacy Benefits Managers in Prescription Drug Markets.
We would like to recognize and commend APCI member and, at the time of his testimony, NCPA President High Chancy who was on the panel of experts speaking on behalf of NCPA. During the hearing, PCMA CEO J.C. Scott was peppered with questions from community pharmacy supporters including but not limited to Chairman Comer, Ranking member Raskin, Rep. Harshbarger, Rep. Higgins, and Rep. Auchincloss. Two APCI-sponsored 3 Axis studies were cited and used as the basis for questions directed at PCMA CEO Scott.
You can view the full hearing here.
APCI Makes Its Mark on Explosive House Oversight Hearing: Part 2
APCI submitted a joint statement for the record with TransparencyRX, a new transparent PBM organization dedicated to advocating for transparency and PBM reform. The joint statement highlighted findings in the new APCI-sponsored 3 Axis Report as well as explosive findings in a recent MedPAC report. TransparencyRx’s choice to partner with community pharmacy in its engagement with House Oversight sends a powerful message to Congress and also to the big PBMs.
APCI Opposes Optum Acquisition of Amedisys
APCI has been one of the loudest voices in standing up to vertical integration in the healthcare space. In an October letter to the U.S. Department of Justice, APCI opposed Optum’s acquisition of home health company Amedisys. In its letter, APCI advocated for broader use of Section 5 of the FTC Act (Unfair Methods of Competition).
APCI’s opposition to the deal was covered by Becker’s Hospital Review and by health blog Express Healthcare Management.
APCI Contributes to and Quoted in Investigative Segment on PBMs
Missouri investigative journalist Paula Vasan at KDSK in St. Louis aired a television segment on how PBM practices are harming independent pharmacies and their patients. APCI’s General Counsel and Director of Healthcare Policy Greg Reybold is quoted and the aforementioned APCI-sponsored 3 Axis Study is referenced.
APCI Presents at FPA Annual Meeting
Greg Reybold, APCI’s Director of Healthcare Policy and General Counsel, was a co-presenter along with Florida Pharmacy Association President-Elect and independent pharmacy owner Kevin Duane on Florida’s big new PBM law that was passed in 2023. APCI was thrilled to be in attendance and to be able to speak with FPA members about this important and exciting new law.
APCI presents at PUTT Summit
Greg Reybold also had the opportunity to talk federal advocacy with Pharmacists United for Truth and Transparency (PUTT) members at the group’s Annual Summit. APCI has been working closely with PUTT on several issues and is always excited to meet with and speak with PUTT
members who are some of the most engaged pharmacists in the country when it comes to advocating on the state and federal level.
APCI Meets with Congressman Comer
Bill Eley, APCI’s Director of Legislative Affairs, met with
Rep. James Comer (R-KY), who is not only a champion of community pharmacy, but also the Chairman of the House Committee on Oversight and Accountability.
Bill Packages to Watch
In the U.S. House of Representatives, much of the PBM reform legislation supported by APCI has found its way into a larger health transparency package via HR 5378. This bill includes important PBM revisions including reform of Medicaid managed care, a prohibition on spread pricing, and transparency. This bill was initially scheduled for a floor vote on September 18 but was pulled for a number of reasons. APCI continues to support this legislation and work toward advancing it through the House.
On the Senate side, there are two bills that have advanced through the Committee on Finance
that look to tackle PBM practices head on. First, is S. 2973, the Modernizing & Ensuring PBM Accountability Act - MEPA. This bill looks to tackle PBM conflicts of interest and increase transparency in Medicare Part D by delinking PBM profits from higher drug prices as well as requiring PBM reporting of certain information.
APCI has worked with the Senate Finance Committee and made several suggestions which have been implemented that APCI believes makes the bill stronger, including requiring disgorgement of ill-gotten gains in violation of the law back to CMS rather than the Part D plan sponsor when the plan sponsor is affiliated with the PBM. Similarly, APCI requested that PBM reporting be made not just to the plan sponsor (in light of affiliation issues) but also to the Secretary of the Department of Health and Human Services. APCI is pleased to see these changes included.
More recently, the Senate Committee on Finance introduced the Better Mental Health Care, Lower-Cost Drugs, and Extenders Act (BETTER). While the bill has yet to be assigned a number, this bill looks to, amongst other things, build on MEPA and address PBM practices centered around reimbursement of independent pharmacies, preferred network access for pharmacies, and lowering costs for patients for certain medicines via basing cost shares on prices net of rebates. With regard to pharmacy reimbursement and access, the bill would require PBMs to grant essential pharmacies in preferred network service areas (80% of independent pharmacies) access to networks and that total reimbursement for essential retail pharmacists not be less than NADAC. Effective dates would be 2028.
APCI is grateful to the Senate Finance Committee and Senators for working to protect independent pharmacies and patients and APCI will continue to work to make the bill as strong as it can be while also advocating for more aggressive reform. However, taken together, MEPA and BETTER represent some of the most aggressive efforts at PBM reform on the federal level we have seen, and it is a sign that the voices of community pharmacists are being heard.
Finally, the Senate Committee on Health, Education, Labor & Pensions (HELP) has advanced
S.1339, the Pharmacy Benefit Manager Reform Act. This is a sweeping piece of bipartisan PBM legislation championed by Senator Bernie Sanders and Republican Senator Bill Cassidy. This bill contains significant transparency reporting requirements, bans spread pricing, requires rebates to be passed through to plan sponsors, and prohibits PBM clawbacks.
As previously noted, this bill would act on PBMs in the commercial market but fails to include language preserving the ability of individual states to regulate PBMs in the commercial and self-funded markets. Without such language it is likely PBMs would argue this legislation
reshuffles the deck in terms of ERISA preemption.