Bill Overview
Title: Pharmacy Benefit Manager Transparency Act of 2022
Description: This bill generally prohibits pharmacy benefit managers (PBMs) from engaging in certain practices when managing the prescription drug benefits under a health insurance plan, including charging the plan a different amount than the PBM reimburses the pharmacy. The bill also prohibits PBMs from arbitrarily, unfairly, or deceptively (1) clawing back reimbursement payments, or (2) increasing fees or lowering reimbursements to pharmacies to offset changes to federally funded health plans. PBMs are not subject to these prohibitions if they (1) pass along 100% of any price concession or discount to the health plan, and (2) disclose specified costs, prices, reimbursements, fees, markups, discounts, and aggregate payments received with respect to their PBM services. Further, PBMs must report annually to the Federal Trade Commission (FTC) certain information about payments received from health plans and fees charged to pharmacies. The FTC and state attorneys general are authorized to enforce the provisions of the bill.
Sponsors: Sen. Cantwell, Maria [D-WA]
Target Audience
Population: Individuals with health insurance plans using pharmacy benefit managers
Estimated Size: 200000000
- The bill impacts anyone who receives health insurance that uses a pharmacy benefit manager (PBM) to manage prescription drug benefits. PBMs are intermediaries between insurers, pharmacies, and drug manufacturers.
- Pharmacy Benefit Managers (PBMs) handle prescription drug claims for insurance plans, hence impacting individuals who are insured under these plans.
- PBMs employ strategies that can affect drug pricing, pharmacy reimbursement, and ultimately the out-of-pocket costs for patients. Changes to PBM practices could potentially lower costs for patients at the pharmacy counter.
- The bill could improve transparency in pricing and fees related to prescription drugs, potentially leading to cost savings which will directly affect patients who need prescription medications.
- Pharmacies and healthcare providers are also part of the target as the bill restricts how PBMs can reimburse or charge them, potentially affecting their revenue and operations.
Reasoning
- A wide variety of individuals are affected due to the widespread use of PBMs, from patients to pharmacists, impacting both cost and access.
- Differences in the impact of the policy may occur based on income, access to health plans, and geographic location, especially rural versus urban access to pharmacies.
- The policy may have varying degrees of impact based on individuals' dependence on prescription medication, level of insurance coverage, and whether they deal with chronic conditions.
- Given the budget constraints, we should consider the scale of administrative costs for enforcement and reporting which could influence resources allocated for direct patient assistance.
Simulated Interviews
teacher (Los Angeles, CA)
Age: 42 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 20.0 years
Commonness: 15/20
Statement of Opinion:
- I hope this policy will mean more transparency and potentially lower costs for my prescriptions.
- Sometimes it feels like I'm paying more because of middlemen. This policy gives me hope that it might change.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 8 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 8 | 5 |
| Year 20 | 7 | 5 |
software engineer (Salt Lake City, UT)
Age: 29 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 0.0 years
Commonness: 18/20
Statement of Opinion:
- I don't take regular medication, so I don't feel impacted by PBMs, but any cost-lowering measures are generally good.
- It's interesting to see steps being taken for transparency in a system that's usually murky.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 8 | 8 |
| Year 10 | 8 | 8 |
| Year 20 | 8 | 8 |
retired (Miami, FL)
Age: 67 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 15.0 years
Commonness: 8/20
Statement of Opinion:
- I've seen my medication costs increase over the years, and it's tough on a fixed income.
- If this policy can help reduce those costs, it would be a significant relief.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 7 | 5 |
| Year 3 | 7 | 4 |
| Year 5 | 6 | 3 |
| Year 10 | 6 | 3 |
| Year 20 | 5 | 2 |
pharmacist (Houston, TX)
Age: 36 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 5/20
Statement of Opinion:
- Some of the PBM practices are really hurtful to small pharmacies like ours.
- This policy could level the playing field, hopefully leading to fairer reimbursement for us.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 8 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 7 | 4 |
| Year 10 | 7 | 4 |
| Year 20 | 6 | 3 |
healthcare administrator (New York, NY)
Age: 53 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 10.0 years
Commonness: 12/20
Statement of Opinion:
- Transparency could improve negotiations and possibly lower costs, but implementation will require significant oversight.
- It's a positive step, but there’s always a balance between cost savings and administrative burden.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 7 | 5 |
| Year 10 | 7 | 5 |
| Year 20 | 7 | 5 |
freelance writer (Chicago, IL)
Age: 31 | Gender: other
Wellbeing Before Policy: 6
Duration of Impact: 20.0 years
Commonness: 10/20
Statement of Opinion:
- I often feel like I'm paying too much for the care I receive, particularly medications.
- A policy increasing transparency and possibly cutting costs at the pharmacy counter would be very welcome.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 8 | 5 |
| Year 10 | 7 | 4 |
| Year 20 | 7 | 4 |
unemployed (Memphis, TN)
Age: 24 | Gender: female
Wellbeing Before Policy: 4
Duration of Impact: 5.0 years
Commonness: 10/20
Statement of Opinion:
- Getting medications for my child without high costs would be a huge relief.
- I hope that this kind of policy helps people in situations like mine.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 4 |
| Year 2 | 5 | 4 |
| Year 3 | 6 | 4 |
| Year 5 | 5 | 3 |
| Year 10 | 4 | 3 |
| Year 20 | 4 | 2 |
retired (Phoenix, AZ)
Age: 72 | Gender: male
Wellbeing Before Policy: 4
Duration of Impact: 10.0 years
Commonness: 7/20
Statement of Opinion:
- If this bill can reduce the overall costs for my diabetes medication, it would improve my quality of life.
- I think more transparency could help tame unpredictable costs.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 4 |
| Year 2 | 6 | 3 |
| Year 3 | 6 | 3 |
| Year 5 | 5 | 3 |
| Year 10 | 5 | 2 |
| Year 20 | 4 | 1 |
small business owner (Seattle, WA)
Age: 38 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 8/20
Statement of Opinion:
- It’s vital to manage costs, and knowing what PBMs truly cost could benefit employer-sponsored plans.
- If this policy helps reduce our rates, it could also potentially improve our own business wellbeing.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 6 | 5 |
| Year 5 | 7 | 5 |
| Year 10 | 7 | 5 |
| Year 20 | 6 | 4 |
insurance claims adjuster (Denver, CO)
Age: 59 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 15.0 years
Commonness: 9/20
Statement of Opinion:
- Streamlining and clarifying PBM roles could help reduce client confusion and disputes.
- I see direct client interactions and believe transparency and fair pricing could foster trust.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 8 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 8 | 5 |
| Year 20 | 7 | 5 |
Cost Estimates
Year 1: $500000000 (Low: $250000000, High: $750000000)
Year 2: $500000000 (Low: $250000000, High: $750000000)
Year 3: $500000000 (Low: $250000000, High: $750000000)
Year 5: $500000000 (Low: $250000000, High: $750000000)
Year 10: $500000000 (Low: $250000000, High: $750000000)
Year 100: $500000000 (Low: $250000000, High: $750000000)
Key Considerations
- Consideration of how PBMs respond financially and structurally to new transparency requirements and prohibitions.
- The impact on drug prices as PBMs adjust to prohibitions against unfair practices.
- Potential legal challenges or lobbying that might affect implementation or enforcement costs.
- Overall savings to consumers versus potential increased costs of operations for PBMs and healthcare plans.