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Rep. Schrader Introduces Bill to Increase Drug Price Transparency and Reduce Gaming

For Immediate Release

December 5, 2019

Contact: Larkin Parker, 202-225-5711

Rep. Schrader Introduces Bill to Increase Drug Price Transparency and Reduce Gaming


WASHINGTON, D.C. –Congressman Kurt Schrader (D-OR) introduced the bipartisan PBM Transparency in Prescription Drug Costs Act (HR 5304) with Congressman Greg Gianforte (R-MT). This bill will mandate quarterly reports on the costs, fees and rebate information associated with pharmacy benefit manager (PBMs) contracts ensuring that employers know the true costs of the services that they are paying for-passing on savings to consumers. States, local governments, organizations and business use PBMs to negotiate lower drug prices for the individuals on their health insurance plans. Three organizations control eighty-five percent of this market. While PBMs play a crucial role in the drug supply chain, the lack of transparency into their practices has contributed to the rising cost of prescription drugs.


As the cost of pharmaceuticals continue to escalate exponentially, the opaque process, rebates, discounts and claw-back fees have become part of the problem and do not give consumers the best deals possible,” said Rep. Schrader. “My bill with Mr. Gianforte will provide certainty to employers and consumers by ensuring greater transparency in the calculations of drug costs. This commonsense, bipartisan legislation will reign in pricing schemes that hide the true cost of medications and prevent the skyrocketing costs of prescription drugs.


Too many PBMs operate as middlemen who negotiate deals out of the public eye and too often at the expense of consumers,” Congressman Gianforte said. “This bipartisan bill shines a light on PBM’s secretive process. This commonsense legislation increases transparency, puts consumers first, and is a step in reducing prescription drug prices.”


The PBM Transparency and Prescription Drug Costs Act requires that employers receive a report at least every six months from the health issuer or entity providing PBM services including an array of prescription pricing and utilization data for the enrollees of their plan. PBMs would also no longer be able to utilize spread pricing as the default contracting model —a practice in which the PBM charges the plan sponsor more for a drug than the PBM paid the pharmacy for dispensing the drug. When contracting with a group health plan, a PBM must pass all rebates and discounts received from a pharmaceutical manufacturer, distributor, or other third party through to the health plan. The bill also addresses a practice of shifting costs into non-transparent fees. Reporting will be structured to safeguard the release of information that could lead to higher drug prices.