Miller-Meeks, Barragan, Chavez-DeRemer, Manning, Malliotakis, Schneider, Kean, and Spanberger Introduce the DRUG Act

WASHINGTON, Nov. 10 (TNSres) -- Rep. Mariannette Miller-Meeks, R-Iowa, issued the following news release:

U.S. Representatives Mariannette Miller-Meeks (IA-01), Nanette Diaz Barragan (CA-44), Lori Chavez-DeRemer (OR-05), Kathy Manning (NC-06), Nicole Malliotakis (NY-11), Brad Schneider (IL-10), Tom Kean, Jr. (NJ-07), and Abigail Spanberger (VA-07) introduced the "Delinking Revenue from Unfair Gouging Act" or the "DRUG Act," legislation that bans spread pricing, patient steering, and implements de-linking policies in the commercial insurance market.

"Pharmacy benefit managers (PBMs) have excessive influence over the prices patients pay at the pharmacy counter," said Miller-Meeks. "The DRUG Act puts downward pressure on prescription drug prices and insurance premiums by removing the incentive for PBMs to drive up the list price of a medication. Additionally, this legislation protects independent pharmacies and a patient's right to choose the pharmacy of his or her choice without pressure from the PBM."

"The rapidly rising cost of prescription drugs has forced patients to choose between lifesaving medication and other basic needs," said Barragan. "Low-income communities and those with multiple, chronic health conditions suffer most from unmet prescription drug needs. Pharmacy Benefit Managers are incentivized to engage in anticompetitive behavior that results in higher costs for consumers. The DRUG Act would reign in these PBM practices that spike prices, and lead to increased access to affordable medication."

"Pharmacy benefit managers manipulate the current payment model by creating an environment that favors more expensive prescription medications, which ultimately drives up health care costs for patients," said Chavez-DeRemer. "By implementing a flat-fee compensation system, the DRUG Act would streamline drug price negotiations - lowering costs by improving transparency and reducing administrative burdens. I'll continue working in a bipartisan manner to bolster transparency and accountability in the health insurance industry to make health care more affordable for Oregon seniors and families."

"North Carolina families shouldn't have to struggle to afford the medications they need to stay healthy. But Pharmacy Benefit Managers are incentivized to give preference to high-cost drugs, so they can earn more on service fees, and then those costs are passed down to families. This dishonest practice must be put to rest," said Manning. "I'm co-leading this bipartisan bill to put a stop to pharmaceutical price gouging and bring down the cost of prescription medications for all."

"When it comes to PBMs, there's little to no transparency on their practices, and they're making a lot of money by dictating what their competitors are able to make," said Malliotakis. "Because of this, 'Mom & Pop' pharmacies in my district are being crushed, and the costs are being passed down to consumers. I'm proud to join my colleagues in introducing this critical piece of legislation which cracks down on the exploitative pricing techniques of PBMs and works to make pharmaceuticals more affordable."

"When one in four Americans say they have difficulty affording their medicine, we have a problem. Too often I hear constituents telling me they are rationing the medicines, or cutting their pills in half, or foregoing their medication all together, due to skyrocketing costs. Part of the solution to the drug affordability crisis in America must be addressing the role of pharmacy benefit managers (PBMs). These middlemen build their drug formularies and negotiate inflated list prices from manufacturers all at the great expense of patients. We need to fix the broken incentive structures that unfairly reward PBMs for choosing costly drugs and limiting access to critical medications," said Schneider. "I am proud to support the DRUG Act, which will remove the incentives which drive PBMs to favor expensive drugs for patient plans, increase costs for payers, and steer patients to their affiliated pharmacies. This legislation will instead build incentives to lower drug costs and deliver better access to medication for patients across the country. I thank my colleagues for their work on this important legislation."

"While Virginians and Americans across the country are spending more and more of their money on lifesaving medication, PBMs are playing a behind-the-scenes role in driving up prescription drug costs," said Spanberger. "These third-party middlemen should not receive a cash reward for steering patients toward overpriced medications. This bipartisan bill would help lower drug costs by reforming the pharmaceutical industry's murky rebate system and removing the incentive for PBMs to favor expensive drugs over drugs Americans can actually afford."

For the full bill text, please click here (https://millermeeks.house.gov/sites/evo-subsites/millermeeks.house.gov/files/evo-media-document/drug-act_final.pdf).

For the one-pager about the bill, please click here (https://millermeeks.house.gov/sites/evo-subsites/millermeeks.house.gov/files/evo-media-document/drug-act-one-pager_.pdf).

Background:

PBMs are a growing faction in the distribution and payment ecosystem for prescription medicines. As the entity between pharmaceutical companies and pharmacies, PBMs initially played a key role in reducing prescription medicine costs and increasing access and affordability for Americans. Unfortunately, PBMs have grown and vertically integrated to the point where the three largest PBMs control over 80% of prescriptions, up from 30% in 2010. Their modern-day practices of driving up list prices in order to extract higher rebates for formulary placement are occurring at the expense of patients in the form of higher insurance premiums and higher prescription drug costs.

PBMs often bill patients more than what they pay to the pharmacy for medicines and keep the difference, enriching themselves instead of the patients they are supposed to benefit. This business practice, known as spread pricing, adds opacity to a supply chain that needs transparency. PBMs have attempted to rebrand spread pricing, calling it "risk mitigation pricing," and contending that it provides predictability for plan sponsors and lowers drug cost. However, a 2020 analysis by the Congressional Budget Office found that prohibiting the use of spread pricing contracts just in Medicaid alone would save approximately $929 million over 10 years.

Additionally, the DRUG Act includes several other reforms to address PBM abuses:

* Implements de-linking policies, which allows PBMs to only charge a flat fee for drug placement versus letting them continue to charge a percentage of the drug.

* Bans 'spread pricing,' which is when a PBM pays a pharmacy less for a drug than what they receive from the insurer.

* Prohibits PBMs from paying affiliated pharmacies more than independent community pharmacies for the same services; and

* Bans 'patient steering,' when a PBM encourages or requires patients to use its affiliated pharmacies instead of a pharmacy that is most convenient for the patient.

* * *

Original text here: https://millermeeks.house.gov/media/press-releases/miller-meeks-barragan-chavez-deremer-manning-malliotakis-schneider-kean-and