Carter sponsors bipartisan bill to restrict Medicaid drug pricing increases

Pharmacy benefit managers (PBMs) would no longer be able to artificially spike Medicaid drug prices under a bipartisan bill sponsored on Dec. 1 by U.S. Rep. Buddy Carter (R-GA). 

The Drug Price Transparency in Medicaid Act of 2021, H.R. 6101, which Rep. Carter introduced with lead original cosponsor U.S. Rep. Vicente Gonzalez (D-TX), would ban the use of spread pricing by PBMs in Medicaid managed care, according to a bill summary provided by Rep. Carter’s staff.

“Prescription drug prices are way too high. As a pharmacist, I’ve seen the pain in patient’s eyes as they make the impossible choice between paying for food and paying for medication,” Rep. Carter said. “With this bill, we can radically decrease drug prices and put power back into the hands of the patients, without expensive or heavy-handed government programs.”

According to the Centers for Medicare & Medicaid Services (CMS), spread pricing occurs when health plans contract with PBMs to manage their prescription drug benefits, and PBMs keep a portion of the amount paid to them by the health plans for prescription drugs instead of passing the full payments on to pharmacies.

“Thus, there is a spread between the amount that the health plan pays the PBM and the amount that the PBM reimburses the pharmacy for a beneficiary’s prescription,” CMS says. “If spread pricing is not appropriately monitored and accounted for, a PBM can profit from charging health plans an excess amount above the amount paid to the pharmacy dispensing a drug, which increases Medicaid costs for taxpayers.”

If enacted, H.R. 6101 would require pass-through pricing in a contract between the state and a PBM or a contract between the state and a managed care entity that includes provisions making the entity responsible for coverage of covered outpatient drugs dispensed to individuals enrolled with the entity, among other provisions, according to the text of the bill.

H.R. 6101 has been referred to the U.S. House Energy and Commerce Committee for consideration.