Arlington, VA – Today, FMI – The Food Industry Association welcomed the U.S. Senate Commerce, Science & Transportation Committee’s hearing on the bipartisan Pharmacy Benefit Manager Transparency Act (S. 127), introduced by Sens. Maria Cantwell (D-WA) and Chuck Grassley (R-IA), that would address many of the anticompetitive practices used by some of the largest drug middlemen known as pharmacy benefit managers (PBMs). FMI also submitted a statement for the record in support of the legislation ahead of today’s hearing.
The PBM Transparency Act would empower the Federal Trade Commission (FTC) and state attorneys general to stop unfair and deceptive PBM business practices, prohibit anticompetitive pricing schemes, require PBMs to file an annual report with the FTC, and incentivize transparent PBM practices. The introduction of this legislation last month and the Senate hearing today come on the heels of the FTC last year launching a formal inquiry into the PBM industry and ramping up enforcement against those PBMs participating in rebate schemes that block access to cheaper drugs.
FMI Chief Public Policy Officer Jennifer Hatcher stated, “Despite their outsized influence, PBMs are one of the least transparent and least regulated sectors of the health care system and drug supply chain. They use their substantial market power in many cases to reduce reimbursement, claw back funds, restrict networks and effectively force pharmacies to provide drugs below cost – all of which serves to drive many supermarket pharmacies out of the pharmacy business.”
Hatcher continued, “Supermarket pharmacies are especially important access points for consumers in underserved, low-income, rural and urban communities, but the combination of increased fees, lowered reimbursement rates and reduced access for patients due to PBM patient steering is unsustainable - particularly for the supermarket industry that operates on razor thin profit margins, generally about 2%.”
Hatcher concluded, “The PBM Transparency Act offers Congress a meaningful opportunity to bring greater transparency and accountability to PBMs. FMI thanks Sen. Cantwell for convening this hearing today. We look forward to working with her and Sen. Grassley as well as Senate leadership to ensure this important bipartisan legislation gets a full vote on the Senate floor soon.”
FMI is also a founding member of the Coalition for PBM Reform, a group of patient advocate, prescriber, pharmacy and business organizations united behind the need to address harmful PBM practices that hinder patient access to affordable medication, threaten the viability of pharmacies, and increase costs for businesses offering their employees health care plans. A statement from the Coalition on today’s hearing is available here.