Lankford Continues to Unwind the Rx Pricing Scheme to Bring Down Costs at the Pharmacy Counter
OKLAHOMA CITY, OK – Senator James Lankford (R-OK), member of the Senate Finance Committee, joined Senators Chuck Grassley (R-IA) and Maria Cantwell (D-WA) to continue to crack down on pharmacy benefit managers’ (PBM) unfair practices in the prescription drug-pricing scheme by introducing the Prescription Pricing for the People Act.
“Getting affordable prescription drugs in Oklahoma and around the nation doesn’t need to be this complicated or costly,” said Lankford. “Unfortunately, at each stage of the Rx pricing process, someone is taking a cut, and it’s driving up the costs for Oklahomans at the pharmacy counter. Families in my state are demanding we address the actual causes of overly priced prescriptions, and this bill—along with other efforts my office is pushing forward—will start to unwind the Rx pricing scheme and bring it back to reality.”
“Year after year, the price of prescription drugs has skyrocketed, far outpacing inflation and leaving patients and taxpayers footing the increasingly outrageous bill. I’ve worked to battle price increases on many fronts, but we can’t truly restore sanity to drug prices without addressing pharmacy benefit managers. PBMs, the industry middlemen, operate in the shadows and drive up prices for consumers. These bills bring about greater transparency to their industry and prevent unfair or anticompetitive practices that harm consumers,” Grassley said.
“For too long, Americans have been left in the dark while PBMs – the mysterious middlemen – manipulate prescription drug prices. We need to hold PBMs accountable for skyrocketing drug prices. With these bipartisan bills, I’m continuing to fight for accountability and transparency in the drug market so we can shine a light on unfair practices and make sure patients get a fair deal on the medications they need,” Cantwell said.
Lankford, Grassley, and Cantwell were joined in introducing the Prescription Pricing for the People Act by Senators Marsha Blackburn (R-TN), Richard Blumenthal (D-CT), Thom Tillis (R-NC), Tommy Tuberville (R-AL), Mike Braun (R-IN), and Shelley Moore Capito (R-WV).
This bill requires the Federal Trade Commission (FTC) to examine the effects of consolidation in the PBM industry on pricing, as well as other potentially abusive behavior by PBMs. The bill instructs the FTC to provide policy recommendations to Congress to improve competition and protect consumers. While the FTC has initiated a 6(b) study into PBM business practices, it is important they conduct a thorough and timely study of the pharmaceutical supply chain. This bill bans deceptive unfair pricing schemes, prohibits arbitrary clawbacks of payments made to pharmacies and requires PBMs to report to the FTC how much money they make through spread pricing and pharmacy fees.
Last year, Lankford sent several letters to the FTC in support of its PBM investigation, highlighting the harsh realities of their anti-competitive behaviors and the resulting price spikes and overall decreased access for average Americans.
Lankford has repeatedly called out abusive practices of PBMs, who act as middlemen between pharmacies and insurers, in the negotiation of the final price of a prescription drug. One of these harmful practices is the issuing of retroactive direct and indirect remuneration (DIR) fees, which are clawback fees required sometimes several months after a pharmacy dispenses a drug to a patient. These fees range in size and timing, causing local pharmacies great uncertainty and driving up seniors’ out-of-pocket drug costs. According to the Centers for Medicare and Medicaid Services (CMS), DIR fees have increased more than 107,400 percent between 2010 and 2020. This has contributed to the closing of hundreds of independent community pharmacies.
Last year, Lankford celebrated a huge win for Oklahoma seniors and local pharmacies as Medicare officials announced a proposal for sweeping changes to Medicare Advantage and Medicare Part D plans for seniors. Part of this new proposal from CMS mimics plans for lowering out-of-pocket drug costs for beneficiaries on which Lankford has advocated for several years, including positive changes to DIR.