News Releases - 2017

NCPA Tells U.S. Senate HELP Committee That PBM Reform Must Be Part of Any Efforts to Address Rising Drug Prices

by NCPA | Oct 17, 2017

ALEXANDRIA, Va. (Oct. 17, 2017) In comments submitted to the U.S. Senate Health, Education, Labor and Pensions (HELP) Committee for its hearing, "The Cost of Prescription Drugs: How the Delivery System Affects What Patients Pay, Part II," the National Community Pharmacists Association detailed how the practices of pharmacy benefit managers can increase drug spending. One solution NCPA supports is legislation pending in Congress: S. 413 / H.R 1038, The Improving Transparency and Accuracy in Medicare Part D Drug Spending Act. NCPA made similar arguments during the first hearing on this subject back in June.

"Given the immense market influence that PBMs exert, one might expect that these entities would be subject to the same types of comprehensive regulation that are currently required of commercial health insurers," NCPA wrote. "However, PBMs are not subject to industry-wide regulation. In fact, there are no federal laws or regulations that are specific to the PBM industry. Instead, PBMs face a patchwork of regulations at the state level that are designed to curtail some of the more onerous PBM business practices such as abusive PBM audits of pharmacies and requirements related to timely MAC updates."

NCPA highlighted how limited transparency adds cost to the system. Drug manufacturer rebates and spread pricing are two areas where health plan sponsors may not have sufficient insight into these tactics. In addition, the reimbursement system for generic prescription drugs and direct and indirect remuneration (DIR) fees is distorted by the PBMs, purposefully keeping pharmacies in the dark about their compensation criteria in ways that also impacts patients.

In the case of DIR fees, which are the top concern of independent community pharmacies, NCPA's comments push for enactment of S. 413 / H.R. 1038. Those companion bills ban retroactive clawbacks that Medicare has concluded increase patient and federal government expenditures in Medicare Part D. In fact, a recent study indicates the legislation would save the federal government a whopping $3.4 billion over 10 years.

###



About NCPA
The National Community Pharmacists Association (NCPA®) represents the interests of America's community pharmacists, including the owners of more than 22,000 independent community pharmacies. Together they represent an $80 billion health care marketplace and employ more than 250,000 individuals on a full- or part-time basis. To learn more, go to www.ncpanet.org, visit facebook.com/commpharmacy, or follow NCPA on Twitter @Commpharmacy.