Lawmakers press for quick action on PBM bills

Modern Healthcare – Tuesday, February 11, 2025
By Michael McAuliff

Lawmakers who came within days of passing new restrictions on pharmacy benefit managers are trying to revive those measures as part of major funding bills Congress is rushing to complete.

It was unclear if the specific provisions from December’s package would be the same, but lawmakers said it was vital to move PBM legislation after the last Congress advanced numerous bipartisan measures, but failed at the last minute to include them in the year-end government funding bill.

That attempt failed when President Donald Trump and his adviser, billionaire Elon Musk, objected to other parts of the budget package, forcing Congress to adopt a narrower bill that funds the government until March 14. If the Republican-led Congress and Trump don’t enact federal appropriations for the remainder of fiscal 2025 by that date, a partial government shutdown would commence.

Proponents of reining in PBMs see an opportunity in the March funding bill, which is expected to attract bipartisan support, or to legislation that Republicans are drafting to extend expiring tax cuts, likely without consulting Democrats. Because the Congressional Budget Office predicts some PBM legislation would reduce federal spending, it would fit into either package.

“We’re trying to decide whether we use it for a ‘pay-for’ in reconciliation or what we’re going to do about it,” said Rep. Buddy Carter (R-Ga.), the chair of the Energy and Commerce Committee’s Health Subcommittee.

The previous bills would have instituted significant new transparency requirements on drug industry middlemen such as Cigna unit Express Scripts, CVS Health subsidiary CVS Caremark and UnitedHealth Group division OptumRx, and would have drastically changed how they get paid.

The legislation would have “de-linked” compensation that PBMs earn based on pharmaceutical list prices and banned spread pricing — or charging more for medicines than the prices negotiated with drugmakers — in Medicare and Medicaid. Compensation could no longer be linked to how large of a discount a PBM negotiates from a high list price. Nor could a PBM keep a portion of the savings, or a spread, for itself. They also would have to charge fixed administrative fees.

Another provision in the abandoned package would have instituted similar changes for employer-sponsored health plans, including transparency rules and requirements to pass on negotiated drug price savings to plan sponsors.

The Pharmaceutical Care Management Association, which represents PBMs, is adamantly opposed to all of it.

“More government control in the private market exacerbates the high prices consumers are facing and would be disastrous for employers trying to provide affordable healthcare to working families,” PCMA said in a statement. “It would only increase Big Pharma’s profits. Employers should get to make the call on how they design the healthcare benefits for their employees — not the government. If Congress wants to lower drug costs, they need to get Big Pharma to lower the prices and rein in patent abuses.”

But that’s not how most members of Congress see it.

“We’re going to continue to push for PBM reform. It’s extremely important,” said Rep. Dr. Marianette Miller-Meeks (R-Iowa), a member of the Energy and Commerce Committee. That panel has jurisdiction over a huge swath of the healthcare system, including Medicaid, Medicare and programs from the Affordable Care Act of 2010.

“We’ve got to. We’ve got to make that happen,” said Rep. Rick Allen (R-Ga.), another committee member who said he is “absolutely” pushing to add the previous package to one of the big spending bills.

Rep. Diana Harshbarger (R-Tenn.), an Energy and Commerce Committee member who was a pharmacist before entering Congress, said the panel is still discussing how to proceed. She was as adamant as her colleagues that PBM measures be included in the mix.

“You can use that to save a lot of money,” Harshbarger said. Those resources could be dedicated to other GOP priorities, such as renewing the tax cuts for corporations and wealthy households from the Tax Cuts and Jobs Act of 2017, many of which expire this year.

“We’re going to be discussing that with some other cuts that they’re not really pushing, because this committee will have more cuts than any other committee when it comes to reconciliation,” Harshbarger said.

Budget reconciliation is an expedited process that Congress can use to pass bills that alter taxes or spending. Legislation created through this mechanism cannot be filibustered in the Senate, enabling them to pass with simple majority votes. In other words, the Republican majority doesn’t have to worry about Democratic objections if GOP senators are mostly united. Republicans have a 53-47 advantage in the upper chamber.

House Republicans are considering trillions of dollars in healthcare cuts for the reconciliation bill, which Speaker Mike Johnson (R-La.) wants drafted before Congress leaves for Easter recess in April. But a 50-page list of options distributed to lawmakers last month does not include PBM legislation. Miller-Meeks said that isn’t an indication these measures are not on the table.

There are potential complications from trying to use a reconciliation bill for PBM legislation, especially since some of them might not affect federal spending, said Sen. Charles Grassley (R-Iowa), a Finance Committee member and former chair. In such cases, the Senate Parliamentarian has the authority to rule provisions out of order. A measure targeting employer-based insurance, for instance, may not qualify since it impacts the private market.

“The rules on reconciliation are so difficult,” Grassley said.

Attaching PBM bills to the next government funding bill is a possibility, said Sen. James Lankford (R-Okla.), who also sits on the Senate Finance Committee, which has authority over broad segments of health policy, including Medicare, Medicaid and health insurance.

“We’re also still working on the legislative side of it as well to see how we can actually move this legislatively, what vehicle we can actually move,” Lankford said, acknowledging the fiscal 2025 funding bill is a good possibility. “100%. We are looking for a moving vehicle.”

Outside interests are lobbying Congress to use that package for PBMs, but healthcare legislation has twice failed to move in spending bills over the last year, including the near miss two months ago and a similar setback in March. In both cases, the healthcare provisions were caught up in unrelated disputes.

Lawmakers said they are also looking at starting fresh with standalone bills in case the PBM legislation fails to hitch a ride on a bigger package.

Grassley said he plans to introduce a new PBM bill with fellow Finance Committee member Sen. Maria Cantwell (D-Wash.), for instance.

Lankford noted that the Finance Committee passed its PBM bills unanimously in the last Congress, and would probably do so again. But that takes more time. “It hasn’t gone through committee this session yet, so we’d have to start over,” he said.

Harshbarger admitted that as much as she is determined to see PBM legislation enacted, guaranteeing any particular path would be impossible, given the myriad pressures on Congress, which also include extending the nation’s debt limit.

“Heck, everything’s up in the air right now. I mean, everything,” Harshbarger said.

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