Congress averted a shutdown in November, extending government funding at current levels through January 19 for some agencies and February 2 for others. That means negotiation on appropriations bills will be fast and furious between now and then, in the hopes of reaching compromises before these deadlines. Before the end of the year, Congress also has to wrap up its work on other major pieces of legislation, including the National Defense Authorization Act and an extension of Federal Aviation Administration programs.
In the healthcare space, all eyes remain on pharmacy benefit managers (PBMs), the “middlemen” entities that manage prescription drug benefits for health insurance companies and employers. It’s likely we’ll see additional action before the end of the year on this topic.
In November, the Senate Finance Committee considered the Better Mental Health Care, Lower Drug Cost, and Extenders Act, which further built on PBM reform legislation the Committee had voted out back in July. The resulting bill now includes two major reforms that will help reduce drug costs for Medicare beneficiaries. First, the bill would “delink” PBM income from drug prices. Currently, in exchange for a beneficial formulary position, drug companies provide percentage-based discounts off the list prices of their drugs to the PBM. That creates a perverse incentive, which is that drugs with higher list prices present higher potential profit for the PBM. Since patient cost-sharing is based on list prices, that leaves patients holding the bag. The Finance Committee bill would take a critical first step to sever this underlying link. Second, the bill would require a limited pass-through of price concessions on medications that treat certain chronic conditions prevalent among Medicare beneficiaries. Both of these provisions were narrowed in response to feedback from the Congressional Budget Office, so they’re viewed as stepping stones to build on in future years.
On the House side, the Energy and Commerce Health Subcommittee advanced the bipartisan Protecting Patients Against PBM Abuses Act (H.R.2880) to delink pricing in Medicare Part D. That bill now awaits review by the full Committee, which is expected in early December. Speaking of: please participate in RNS’ grassroots campaign to advance H.R.2880, which contains strong delinking language with no exceptions or limitations.
Beyond Medicare, delinking is also under consideration for commercial markets. A group of bipartisan Senators has introduced the Delinking Revenue from Unfair Gouging Act – or the DRUG Act – to ensure that the link between drug prices and PBM income is severed in employer and private markets. Feeling the heat, the PBM industry has stepped up its opposition to these meaningful reforms, but it may be too late, given the significant bipartisan momentum behind correcting the perverse incentives underlying drug pricing in the current system.
Last month, we touched on the recent court ruling striking down a 2021 regulation that enabled the use of copay accumulators in the Affordable Care Act exchanges. Unfortunately, this month we learned that the Administration plans to appeal that ruling. In the meantime, our congressional champions are circulating a letter for all Members of Congress to sign, which will urge HHS Secretary Becerra to reinstate the 2020 regulation that allowed use of copay accumulator programs only for branded medications that have low-cost therapeutic alternatives. These development underscore the need for the HELP Copays Act, which would codify a prohibition on the use of copay accumulator programs in the exchanges. (Have we mentioned that we have a grassroots campaign on that legislation as well?) There’s more to come on this topic, and we’ll make sure to keep you posted!