07.25.19

Capito, Colleagues Introduce Bipartisan Legislation to Lower Prescription Drug Costs

Bill would address issue of DIR clawbacks in Medicare Part D program

WASHINGTON, D.C. – U.S. Senator Shelley Moore Capito (R-W.Va.) yesterday joined Senators John Kennedy (R-La.) and Jon Tester (D-Mont.), as well as a bipartisan group of colleagues, to introduce the Phair Relief Act, legislation to lower drug costs for seniors and improve financial certainty for community pharmacies.
 
“For many West Virginians, prescription medicine can be the difference between wellness and illness or even life and death, and in rural states like ours, pharmacists are the most trusted and frequently seen health care providers. That’s why I’ve focused many of my efforts on the important role pharmacists can play in lowering drug costs,” Senator Capito said. “This bipartisan legislation will not only help lower prescription drug prices for seniors, but it will also make it easier for local pharmacists to serve their communities. It’s a commonsense next step in our broader efforts to lower prescription drug costs and improve the health and well-being of West Virginians and all Americans.”
 
“The high cost of prescription drugs is one of the biggest problems that Americans face today. This legislation will help change that,” Senator Kennedy said. “Middlemen negotiators like PBMs should not be receiving the benefits of lower drug costs.  The customers at the pharmacy counter should be the primary beneficiaries of price cuts. This legislation promotes transparency and accountability in the pharmaceutical drug industry by prioritizing patient care instead of middlemen profits.”
 
“Montanans’ drug costs are too high,” Senator Tester said. “This bipartisan bill will help bring them down by giving community pharmacists needed relief from burdensome fees—that’ll be passed on to their customers as lower costs. And it goes a step further by shining a light on how pharmacies are reimbursed for claims—requiring transparency and standardized reporting so folks can get the full picture of how much their prescriptions cost and why.”
 
Under the Medicare Part D program, pharmacy benefit managers (PBMs) act as middlemen between pharmacies and insurers, negotiating price concessions from pharmacies. PBMs should pass on these savings to patients to lower the cost of drugs, but this is seldom the case. PBMs that abuse these practices harm both local community pharmacies and seniors.
 
One of these abuses is the routine of PBMs requiring clawback fees from pharmacies. These fees are known as direct or indirect remuneration (DIR) fees.  When pharmacies are asked for unexpected, retroactive fees months after dispensing a drug to a patient, it makes it challenging for pharmacies to financially plan ahead. DIR fees increase seniors’ out-of-pocket costs at the point of sale for their medications and contribute to an unsustainable environment that forces many community pharmacies to shutter their doors.
 
This legislation will put a five-year freeze on these DIR clawbacks, and it will establish enhanced oversight over these fees. The legislation also establishes standardized quality metrics that PBMs would have to use to assess any fees after the five-year freeze ends.
 
When the Centers for Medicare and Medicaid (CMS) proposed a similar policy in a proposed rule last fall, they estimated that requiring PBMs to account for these retroactive DIR fees at the point of sale would save seniors between $7.1 and $9.2 billion over 10 years on their out-of-pocket drug costs.
 
The following organizations have offered their support for this legislation: the National Community Pharmacy Association (NCPA), National Association of Chain Drug Stores (NACDS), National Association of Specialty Pharmacy (NASP), and American Pharmacists Association (APhA).
 
Other cosponsors include Senators Bill Cassidy, M.D. (R-La.), Sherrod Brown (D-Ohio), James Lankford (R-Okla.), Steve Daines (R-Mont.), Joe Manchin (D-W.Va), Kevin Cramer (R-N.D.), Cindy Hyde-Smith (R-Miss.), and Roger Wicker (R-Miss.).
 
The full text of the legislation is available here.

 

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