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Bipartisan lawmakers introduce bill to ban predatory pricing tactics for Medicaid reimbursement

U.S. House of Representatives

Rep. Earl L. “Buddy” Carter (R-GA), Rep. Vicente Gonzalez (D-TX), House Republican Conference Chair Rep. Elise Stefanik (R-NY), Rep. Deborah Ross (D-NC), Rep. Rick Allen (R-GA), and Rep. Jake Auchincloss (D-MA) today introduced bipartisan legislation to end spread pricing in Medicaid programs, which leads to low reimbursement rates for pharmacies and artificially raises health care costs.

The Drug Price Transparency in Medicaid Act saves taxpayers billions by eliminating the use of wasteful and predatory spread pricing by pharmacy benefit managers (PBMs). The program also establishes oversight of, and accountability for, PBM tactics that are threatening patient access to health care and increasing prescription drug spending in Medicaid programs. “PBMs have been allowed to rob patients, small businesses, and taxpayers blind for decades. As a pharmacist, I’ve seen firsthand how patients have been forced to stay sick and forgo medication due to the broken process. With this bill, we can hold PBMs accountable for their role in increasing the cost of health care and pocketing taxpayer money. I am proud to have bipartisan support and commitment to protecting the lives, health, and pocketbooks of patients across America,” said Rep. Carter.

“Patients should not have to decide between buying life-saving medicine or groceries. Prescription drug prices have become so high that patients are having to make these difficult and dangerous choices,” states Congressman Gonzalez. “I am proud to re-introduce this bipartisan bill with Congressman Carter to put patients first, hold industry accountable, and bring down the price of life saving medicine.”

Spread pricing occurs when a PBM charges health plans for prescription drugs more than they pay the pharmacy, which often is even below the cost for a pharmacy to acquire the drugs they are dispensing. Instead of passing the full payment on to pharmacies, PBMs keep the “spread” as profit while the pharmacies are reimbursed below their costs, which is an unsustainable situation for community pharmacies trying to keep their doors open to take care of patients. “I’m working to drive down prescription drug prices on behalf of the health of our seniors who rely on pharmacies for their medications,” Stefanik said. “The Drug Price Transparency in Medicaid Act will ensure drug prices are not needlessly being driven up. I am proud to support this effort to empower our pharmacies who are critical to accessing medications and protect access to care for our seniors.” “I hear from my constituents every day about the burden of sky-rocketing prescription drug prices,” said Congresswoman Deborah Ross. “No one should have to choose between paying for life-saving medication and putting food on the table. That’s why I’m proud to support the Drug Price Transparency in Medicaid Act to hold PBMs accountable, lower the cost of health care, and ensure all patients can access the care they need. I thank Congressmen Carter and Gonzalez for their partnership on this issue and will keep fighting to see this signed into law.”

“Pharmacy benefit managers regularly engage in practices like spread pricing to line their pockets with billions of dollars every year, to the detriment of the American taxpayer. Nearly one in five Americans rely on Medicaid for their health coverage, and Congress should not allow wasteful practices like these to continue and undermine the system. I am proud to join my friend and fellow Georgian, Rep. Carter, in co-sponsoring this bipartisan effort to protect taxpayer dollars by improving transparency and accountability in the prescription drug marketplace,” said Rep. Allen.

"For far too long, PBMs have been allowed to collect taxpayer dollars without reducing the costs of drugs for Medicaid patients. Increasing transparency in pricing and cracking down on PBMs will put money back where it belongs-- into the pockets of patients dependent on life-saving medication. This bill builds on the work done last Congress to lower the cost of drugs and finally holds PBMs accountable,” said Rep. Auchincloss. Rep. Carter published a report highlighting the various tactics PBMs use to rob patients of quality and affordable care, which you can read here.

Read the full bill text here.

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