Transparency |

Senators Urge CMS To Close ‘Loopholes’ In Payer Price Transparency Rule

March 16, 2023 By Jay Baldauf

Two top senators are urging the Biden administration to address “loopholes” that they said allow insurers to skirt price transparency requirements.

Sens. Maggie Hassan, D-New Hampshire, and Mike Braun, R-Indiana, wrote in a letter (PDF) to Centers for Medicare & Medicaid Services Administrator Chiquita Brooks-LaSure that the agency should update its regulations to “ensure that there is true health plan transparency and compliance.”

The senators said some insurers have posted the required data in “an indecipherable structure” or made the files so large that they can only be processed by a supercomputer. This technically meets the requirement of posting the data but makes the information extremely difficult to use.

“As a result, employers and researchers have been unable to use the data to assess the drivers of high health care costs and target solutions,” they wrote.

The letter noted that public policy experts have suggested multiple avenues CMS could take to mitigate these loopholes, including setting file size limits, creating a standardized template for reporting, requiring a clear organization system with labels and reducing reporting frequency.

The senators said these changes would make the data more readily usable but would also streamline reporting requirements for insurers.

In addition, the agency should pair these reforms with stepped-up enforcement of requirements, holding plans that post low-quality data—or no data at all—more accountable.

“Randomly auditing the quality of plan data would result in better usability, and additional enforcement would help ensure that remaining noncompliant plans follow the law,” the senators wrote. “We urge CMS to consider these and other expert recommendations so we may continue improving price transparency for Americans and ultimately bring down health care costs.”

House Oversight Panel Launches New Probe Into Major PBM Tactics

March 8, 2023 By Jay Baldauf

Congress Investigates How Pharma Middlemen Affect Drug Prices - WSJ

A key House panel is demanding documents and communications from major pharmacy benefit managers CVS Caremark, Express Scripts and OptumRx on what they call anti-competitive tactics such as spread pricing and rebates.

The probe, announced Wednesday by the House Oversight Committee, is the latest signal Congress is seeking reforms to the PBM industry, as efforts in the Senate seek to improve transparency in the marketplace.

“Greater transparency in the PBM industry is vital to determine the impact that their tactics are having on patients, the pharmaceutical market and healthcare programs administered by the federal government,” said Rep. James Comer, R-Kentucky, chairman of the oversight committee, in a statement.

Comer sent letters to CVS Caremark, UnitedHealth Group subsidiary OptumRx and Cigna’s Express Scripts with demands to turn over documents and communications surrounding several topics. These include incentives to steer patients to a pharmacy owned by the PBM instead of an independent facility and a list of all rebates paid by manufacturers and wholesalers.

“PBMs engage in self-benefiting practices at multiple levels of the payment and supply chain as they retain control over drug prices, rebates, pharmacy reimbursements, insurers, pharmacy networks, and formularies,” wrote Comer in the letter to Express Scripts (PDF).

The letters detailed several polices that it believes are anti-competitive, including “fail-first” policies that will require a patient to fail on the PBM’s preferred drug before taking the one originally prescribed by the provider.

Independent pharmacies have long complained about PBM tactics such as spread pricing, which pays facilities a lower amount than they charge to a plan sponsor. Pharmacies have also decried direct and indirect remuneration (DIR) fees, where a PBM claws back payments to the facility after the drug has been dispensed.

Comer wrote in a release that the panel reached out to the three PBMs because they make up an estimated 80% of the market.

The letters are the latest probe by Congress into PBMs, a sign lawmakers could act this session on the industry.

The Senate Commerce Committee held a hearing last month that questioned several PBM tactics, including steering patients toward affiliated pharmacies. Legislation co-sponsored by Sens. Chuck Grassley, R-Iowa, and Maria Cantwell, D-Washington, would ban spread pricing and clawback DIR fees. A separate bill also calls for the Federal Trade Commission (FTC) to probe the industry and issue recommendations.

The FTC has already launched a probe into the industry’s business practices and has subpoenaed the six largest PBMs in the country.

PBM industry group Pharmaceutical Care Management Association (PCMA) slammed the letters as a distraction against going after prescription drug manufacturers.

“Increasing competition in the prescription drug market is the most effective way to lower costs—and is achievable if lawmakers hold big drug companies accountable for common and egregious abuses of the drug patent system,” said PCMA CEO JC Scott in a statement.