On June 21, the United States Congress took another step forward in its scrutiny of pharmacy benefit managers (PBMs) to "put an end to the hidden clawback fees that are squeezing pharmacies and their customers," as Senators Jon Tester, D-Mont.; Shelley Moore Capito, R-W.Va.; Sherrod Brown, D-Ohio; and James Lankford, R-Okla., introduced the Protect Patient Access to Pharmacies Act (S. 2052).
This legislation is designed to improve patient access to pharmacies and increase transparency in payments and fees to pharmacies. The legislation has three main priorities to accomplish these goals.
First, the bill will enforce and strengthen the federal "any willing provider" law to ensure that pharmacies are no longer subject to practices that ultimately limit network participation and steer patients away from pharmacies. At the forefront of consumer complaints is the inability to utilize a pharmacy of the patient's choice, as opposed to being locked into a mail-order or other pharmacy that the PBM chooses based on an ownership affiliation between the PBM and the pharmacy.
Second, the bill will standardize and provide oversight of metrics that PBMs and insurance plans use to measure performance and quality of pharmacies participating in their networks. Currently, there is no standardization of such metrics across PBMs, and many metrics imposed by the PBMs do not apply to the types of patients and disease states serviced by pharmacies, leading to inaccurate performance and quality results and unnecessary fees to pharmacies.
Third, the bill seeks to ensure transparency in payments and fees issued by PBMs to pharmacies and further curb opaque fees charged to pharmacies by PBMs. The Centers for Medicare and Medicaid Services has documented a 91,500 percent increase in direct and indirect remuneration fees charged to pharmacies by PBMs between 2010 and 2019. Despite Congress' rollback of such fees at the federal level, effective January 1, 2024, many PBMs have designed "work around" programs to continue to extract fees from pharmacies. This bill is designed to limit such conduct by shining a spotlight on payment- and fee-related activity by PBMs.
The Protect Patient Access to Pharmacies Act is one of numerous efforts at the federal level to reform conduct by PBMs. For example, this bill comes on the heels of (1) the Senate Health Education, Labor and Pensions Committee favorably passing the Pharmacy Benefits Manager Reform Act; (2) the Federal Trade Commission's 6(b) study of anti-competitive PBM conduct, the scope of which was recently expanded to look into PBM-owned group purchasing organizations; and (3) document requests served by the House Oversight Committee on the three major PBMs.
Duane Morris attorneys will continue to monitor developments in this area and other related issues and report on the key details for the industry in subsequent Alerts.
For More Information
If you have any questions about this Alert, please contact Jonathan L. Swichar, Bradley A. Wasser, any of the attorneys in our Pharmacy Litigation Group or the attorney in the firm with whom you are regularly in contact.
Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.
