U.S. Reps. Urge Transparency in Generic Drug Pricing, Payments

FEBRUARY 23, 2016
PRESS RELEASE

Alexandria, VA. - U.S. Reps. Doug Collins (R-Ga.) and Dave Loebsack (D-Iowa), who are the original sponsors of the MAC Transparency Act (H.R. 244), were joined by 14 other members of Congress in a letter to the chairs and ranking members of the U.S. House of Representatives Energy and Commerce, Ways and Means, and Armed Services committees urging greater transparency in generic prescription drug reimbursements for governmental health programs (Medicare Part D, Federal Health Employees Benefits Program, and the Department of Defense's TRICARE Program). In response, National Community Pharmacists Association (NCPA) CEO B. Douglas Hoey, RPh, MBA, issued the following statement:
 
"We want to thank Representatives Collins and Loebsack for their continued leadership, and their 14 congressional colleagues for their strong support in pushing for their bipartisan, common-sense solution to increase transparency into generic prescription drug pricing and reimbursement rates. Community pharmacies start behind the 'eight ball' by having limited information about the criteria that pharmacy benefit manager (PBM) corporations, which administer drug plans, use to set reimbursement prices. Making matters worse, PBM corporations are often painfully slow in updating those prices, even when dramatic price spikes happen virtually overnight. As a result, community pharmacies are saddled with outdated reimbursements that fail to meet dispensing costs and threaten the viability of their businesses.
 
"H.R. 244 addresses all of these concerns by creating transparency mechanisms in government-run, taxpayer-funded government prescription drug programs. The status quo is untenable and we hope the Energy and Commerce, Ways and Means, and Armed Services committees will do everything in their power to bring much-needed transparency to government health programs."
 
The letter starts by explaining why action is needed:
 
"Generic prescription drugs account for approximately 80 percent of drugs dispensed, but the reimbursement system for these medications is a mystery and it is incumbent upon us to conduct the appropriate oversight of this very large PBM industry to make sure taxpayers are not 'footing the bill' for generic prescriptions simply because the PBMs are not required to update the drastic and unpredictable fluctuations we have seen in the generic drug marketplace."
 
The letter further explains how the Centers for Medicare and Medicaid Services (CMS) has begun implementing transparency provisions similar to H.R. 244 this year, so there is nothing unprecedented in this type of request. Furthermore, the letter also calls attention to a new, but related issue that needs to examined, because:
 
"Unfortunately we have already heard from pharmacists being reimbursed with outdated prices and also that the PBMs are now charging an additional fee after the point of sale when the contract is being reconciled. This fee is called direct and indirect remuneration (DIR) and we believe the PBMs are moving to this fee because they are now being required to update generic fluctuations in a timely manner."
 
The additional bipartisan coalition of members who signed the letter were (in alphabetical order) Brian Babin (R-Texas), Lou Barletta (R-Pa.), Rod Blum (R-Iowa), Jim Bridenstine (R-Okla.), Buddy Carter (R-Ga.), Rick Crawford (R-Ark.), Sam Farr (D-Calif.), Walter Jones (R-N.C.), Steve King (R-Iowa), Steven Palazzo (R-Miss.), David Rouzer (R-N.C.), Austin Scott (R-Ga.), Peter Visclosky (D-Ind.), and Peter Welch (D-Vt.).


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