Axios Pro Exclusive Content

The caveat around PBM "delinking"

May 13, 2024
Illustration of text boxes in the shape of a hundred dollar bill and a pill clashing

Illustration: Sarah Grillo/Axios

Overhauling the way PBMs are paid may be a bipartisan priority. What's sometimes overlooked is that doing that in itself may not actually save the government money, some lobbyists say.

Why it matters: To make the math work and get a favorable CBO score, "delinking" has to be connected to transparency measures like requiring PBMs to disclose the cost and reimbursement of drugs and any fees or discounts involved, they argue.

  • It's a prerequisite that will be crucial if PBM legislation has any hope of getting wrapped into a year-end health policy deal.

Driving the news: The House Ways and Means Committee just approved a telehealth package that included a PBM measure delinking PBM compensation from the price of the drug in Medicare and instead using a flat fee.

  • The Senate Finance Committee has already advanced its version of PBM delinking last year.
  • "We're picking up steam every day," Senate Finance Chair Ron Wyden told Axios. "All of the efforts to build on the Senate Finance Committee, which to me it looks like Ways and Means is doing, it's a big help, a big boost."

By the numbers: CBO estimated that the Senate Finance Committee's PBM package would save $702 million.

  • It projected that an earlier House PBM bill approved in House Energy and Commerce would save $226 million.
  • But those measures contain both delinking and transparency policies.

Between the lines: One health lobbyist told Axios that congressional committee health staff have been warned by the CBO that the Medicare delinking policies don't save money unless they are attached to the transparency measures.

  • The PBM industry lobby, PCMA, has also recently highlighted analyses arguing that delinking wouldn't save money for patients but just shift costs to health plans that would then raise premiums.
  • Rep. John Larson raised the same concern about premium hikes due to the PBM offset at the Ways and Means mark-up last week.
  • Delinking "would saddle seniors with higher premiums while boosting profits for big drug companies by $10 billion each year," PCMA spokesperson Greg Lopes said, who then pointed to patent reform as an alternative offset that could provide "significant savings."

The big picture: The two-pronged requirement could complicate prospects down the road.

  • Transparency requirements increase visibility of how money flows into the drug supply chain, driven by the belief that PBMs are driving up patient costs.
  • But critics say the could have the effect of reducing competition and increasing health care costs by forcing PBMs to comply with costly and time-consuming reporting mandates.

The bottom line: That could make a bipartisan priority a much heavier lift as the session winds down.

Go deeper