US Senator Cantwell aims to protect consumers from artificially high Rx drug prices due to industry manipulation

The US Senate Finance Committee has approved an amendment authored by US Senator Maria Cantwell (Democrat, Washington) to require reporting by pharmacy benefit managers (PBMs) to ensure that savings from drug price negotiations are being passed on to consumers and not contributing more to pharmaceuticals' bottom lines. Serving as the middlemen between health insurance plans (including both private health insurance plans and Medicare Part D), pharmaceutical manufacturers and pharmacies, PBMs manage most of the prescriptions filled in the United States but are the only unregulated area of the health insurance industry.

'What we're after here is transparency of drug pricing,' Sen Cantwell told Finance Committee members during the September 25 mark-up of health care reform legislation. 'This kind of transparency will help drive down drug prices in a significant fashion,' she stated

PBMs negotiate price discounts from retail pharmacies and wholesalers and gain rebates from manufacturers to lower drug prices, but the current market incentives and a lack of transparency create an environment where PBMs are likely to profit from closed-door deals that undermine cost-control measures and in fact limit consumer choice, it was noted.

Because of the lack of transparency, the government has no way to protect consumers against practices such as switching prescriptions from one drug brand to another to increase profit, pocketing the savings from negotiated drug prices instead of passing that savings to customers, and manipulating the market to steer business to PBM-owned retail pharmacies and mail-order pharmacies. Sen Cantwell's amendment requires PBMs to report to the government information on pricing, competition, and on how much savings are passed on to consumers. 'We want the consumer to benefit as greatly as possible from the discounts that PBMs are helping to negotiate,' Cantwell said.