Gallego Introduces Package of Bills to Lower Drug Prices for Hardworking Arizonans
WASHINGTON, DC – Today, Rep. Ruben Gallego (AZ-03) introduced three pieces of legislation to hold pharmacy benefit managers, otherwise known as PBMs, accountable for their role in historically inflating drug prices for Arizona consumers.
“For too long, PBMs have price gouged hardworking Arizona families and seniors by rigging the system to line their pockets,” said Rep. Gallego. “These bills will crack down on unfair pricing gimmicks, help lower prescription drug prices for patients at the pharmacy counter, and keep essential pharmacies open across Arizona.”
PBMs are the middlemen who negotiate drug prices for insurers. They are incentivized to steer health plans towards more expensive drugs because their profits are linked to the drug's list price. The higher the sticker price, the more compensation PBMs receive, and patients are left in the dark about those decisions until they visit their local pharmacy and see how much they’re paying at checkout.
The provisions introduced today will also hold Medicare Part D plan sponsors accountable for pressuring neighborhood pharmacies into accepting new, unfavorable contract and reimbursement terms that could force them to close their doors, and for refusing to work with independent pharmacies.
The three bills introduced today address PBMs through the following measures:
- Require PBMs to annually report drug prices and other information to Part D plan sponsors and the Department of Health and Human Services (HHS). PBMs would be required to include information from several categories, such as information related to covered Part D drugs, drug dispensing, drug costs and pricing, generic and biosimilar drugs, PBM affiliates, financial arrangements with consultants, and potential PBM conflicts of interest.
- Require HHS to establish a process enabling a pharmacy to submit an allegation that a Medicare drug plan sponsor was in violation of contract terms and conditions or in violation of protections for essential retail pharmacies that are independent pharmacies.
- Require HHS to gather critical information on industry trends in the financial relationships between prescription drug plans and pharmacies, after which HHS will codify regulatory requirements that Part D plan sponsors must contract with any pharmacy that meets their standard contract terms and conditions.
These three bills build on Rep. Gallego’s efforts to lower drug costs for all Arizonans. Rep. Gallego recently cosponsored the bipartisan Promoting Access to Treatments and Increasing Extremely Needed Transparency (PATIENT) Act. The bill would increase price transparency requirements, including for PBMs, hospitals, and insurers.
He also introduced the Lower Drug Costs for Families Act. The bill seeks to hold Big Pharma accountable for price gouging by requiring drug companies to pay a penalty if they raise prices faster than inflation.