Community Pharmacies
Mr. Speaker, last month Congressman Welch and I introduced legislation H.R. 1038, Improving Transparency and Accuracy in Medicare Part D Spending Act. The legislation would help ensure that small business pharmacies get reimbursed at the…
Mr. Speaker, last month Congressman Welch and I introduced legislation H.R. 1038, Improving Transparency and Accuracy in Medicare Part D Spending Act. The legislation would help ensure that small business pharmacies get reimbursed at the rate they agreed to when they signed the reimbursement contract with the pharmacy benefit manager (PBMs).
Our bill would prohibit the PBMs/health plans from retroactively reducing pharmacy reimbursement that has already been contractually agreed to. If you fill up your gas tank when the price is $2.09 per gallon and the price later goes up to $2.15, you won't receive a bill demanding payment for the extra six cents per gallon. The same principle should apply to our community pharmacists. They deserve to be reimbursed based on the price of drugs when they are dispensed, not when they are charged. The fact that the PBMs can even do this points to the need for action on this bill and the need for broader Congressional scrutiny of large PBMs.
Most Americans don't know who the large PBMs are and what they do-- three large PBMs control roughly 78 percent of the market and manage pharmacy benefits for more than 180 million Americans. PBMs not only manage benefits for insurance companies and employers, they also own their own pharmacies whether that is mail order, specialty or retail.
Unfortunately small pharmacies in Southwest Virginia and Vermont have dealt with direct and indirect remuneration (DIR) fees for the last few years and the fees are only getting worse. The inability of small business community pharmacy owners to plan in advance for these retroactive fees is truly threatening their ability to operate.
Additionally these fees push patients into the donut hole faster than they would otherwise, a fact that CMS has stated. CMS has also stated these fees are increasing costs to the government, especially in the catastrophic phase of the Part D program. Virtually all catastrophic costs in Part D are borne by the government, and they have increased dramatically in recent years--from $10 billion in 2010 to $33 billion in 2015--fueled by pharmacy DIR fees. These PBMs have an extremely robust business relationship with the Federal Government in Part D, FEHB and DOD TRICARE so it certainly seems possible that the Federal Government could be paying more for prescription drugs than it should be.
Our bill was introduced with 15 original cosponsors and we hope that it will see action in the 115th Congress. Prohibiting retroactive fees like this would help CMS have a better ability to understand all the prescription drug spending that is occurring in Medicare Part D. Additionally, Senators Shelley Moore Capito (R-WV) and Jon Tester (D- MT) introduced
identical legislation on the Senate side which seeks to attain the same goals. We very much appreciate their leadership on this issue.