Bill Would Split PBM Pay From Drug Prices in Medicare Part D

Jun 14, 2023
Richard Payerchin

Pharmacy benefit managers (PBMs) again are a target in federal legislation that lawmakers said would benefit patients who get prescription drugs through Medicare Part D.

Meanwhile, one lawmaker has called for breaking up PBMs, the companies that negotiate drug prices for prescription medicine plans. Two other analysts agreed on the need for negotiators to haggle with drug companies over prices, but they should pass value along to consumers, pharmacies, and prescription drug benefit plans.

On June 14, a bipartisan group of six senators introduced the Patients Before Middlemen Act that would separate PBM compensation from drug prices and utilization in Medicare Part D.

The current drug price negotiation system “incentivizes PBMs to steer health plans and seniors towards more expensive prescription drugs,” while pocketing administrative fees and other payments that push up prices for patients, according to the official announcement.

"This legislation will put a stop to one of the most egregious practices driving up the price of prescription drugs in Medicare: pharmacy benefit managers getting paid based on the price of a drug," Sen. Ron Wyden, D-Oregon, said in the news release.

"Instead of fighting for lower prices, this practice has encouraged drug middlemen to favor higher-priced drugs in their negotiations, which means seniors are forced to pay more for their prescriptions,” said Wyden, who is chairman of the Senate Finance Committee. The bill is one among several introduced at the national level in recent weeks to rein in PBMs.

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