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House-Senate split on PBMs imperils reform package

sen. Cassidy at the Capitol

Sen. Bill Cassidy wants PBM policy changes to apply to the commercial market. Photo: Chip Somodevilla/Getty Images

A House-Senate split on regulating PBM business practices is threatening prospects for a reform package as time runs out for deciding what health policies can hitch a ride on the next government funding deal.

Why it matters: While almost everyone in Congress wants to take action on PBMs to address drug costs, the chambers are divided on whether policy changes should apply to the commercial market or just federal health programs.

Driving the news: Senate HELP Committee Ranking Member Bill Cassidy is pushing for the PBM legislation that the panel advanced last year that would, among other things, require PBMs to pass on 100% of the rebates they negotiate to commercial health plans or employers, according to congressional aides and lobbyists.

  • But those sources say House Republicans generally feel that those commercial market moves go too far, and want to limit the scope to Medicare and Medicaid.
  • Bridging that gap could be difficult as a March 8 deadline looms for a possible government funding package with health care attachments.

The big picture: House-passed PBM transparency, and a ban on "spread pricing" in Medicaid so PBMs can't charge payers more than they pay a pharmacy for a drug, are seen as some of the lower-hanging fruit for negotiators.

  • Lawmakers still could also agree on other Medicare and Medicaid-related provisions, like those in a Senate Finance Committee bill that the committee unanimously advanced in November.
  • But changes that apply to the commercial market are more controversial, especially "delinking," or moving PBMs' pay to a flat fee instead of being based on the price of a drug.

What they're saying: "The HELP committee's legislation creates a contracting mandate in the commercial market that takes away employers' flexibility to design pharmacy benefits that meet the needs of patients," said Greg Lopes, a spokesperson for the PBM trade group PCMA.

  • He said it's important to give employers choice to lower costs.

Yes, but: While the House as a whole is less eager to take on the commercial market, some members certainly want to go there.

  • "I will assure you that my goal is to get it in the commercial market," Rep. Buddy Carter, one of the industry's most vocal foes, told Axios on Wednesday when asked about the House-Senate divide.
  • Asked about the chances for PBM legislation overall in the March package, Carter replied: "We've been assured that it's going to be considered ... so I'm expecting it to be [included]."

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