New PBM rule provides some transparency

New DOL rule requires transparency from PBMs

A new Department of Labor (DOL) regulation requires pharmacy benefit managers (PBMs) and related services to disclose compensation, including rebates and fees from drug makers.

Why it matters: PBMs act as middlemen, using opaque practices to profit by driving up drug prices. Transparency will let consumers, employers, and lawmakers know how PBMs profit and indicate whether PBMs use savings from drug purchases to reduce patient costs.

PBMs must disclose detailed information to fiduciaries of large, employer-sponsored, self-insured group health plans about:

• Payments from drug manufacturers.
• Spread compensation (the difference between what PBMs receive and how much pharmacies are reimbursed).
• Claw-back payments demanded from pharmacies.
• Price protection arrangements.
• Payments to rebate aggregators.

Broad coverage: “The rule applies to PBMs and their affiliated brokers and consultants (covered service providers) that contract with large self-insured group health plans to provide pharmacy benefit management services,” says the DOL. The rule was published Nov. 2 and takes effect Jan. 4.

More to do: While transparency lets employers see how much compensation their PBMs are taking, legislation is needed to enable competition in the PBM market, where three companies processed 80% of all equivalent prescription claims in the U.S.

BIO’s view: “We see this rule as a welcome and helpful first step to increase transparency into PBM operations, especially in defining PBM operations broadly,” says Andrew Cosgrove, BIO Senior Director of Policy and Research. “However, the rule does little to change the market dominance of the PBM industry that confounds having a competitive market for PBM services.”

BIO, Biocom, and California Life Sciences sue to block CMS GLOBE rule

BIO, joined by Biocom and California Life Sciences (CLS), filed a complaint in federal court challenging a final rule from the Centers for Medicare & Medicaid Services (CMS): the Global Benchmark for Efficient Drug Pricing Model (GLOBE).

What GLOBE does: Rewrite the Medicare statute to force American biotech innovators to rebate the difference between the price of certain Medicare Part B medicines in the U.S. and government-controlled prices in 19 foreign countries, effectively importing foreign price controls.

Why it matters: CMS, in finalizing the GLOBE model, exceeded its statutory authority to test payment and service delivery models that address a defined population with deficits in care, according to the complaint, filed Nov. 6 in the Northern District of California,

BIO’s view: "By finalizing the GLOBE model, CMS crossed the limits Congress placed on its authority, and ultimately, put patients, innovators, and American competitiveness at risk,” said Joe Franklin, BIO Chief Legal and Policy Officer. “We cannot—and should not—import policies that leave Americans behind and threaten American leadership in global biotechnology."

Read BIO’s Press Release.

BIO panels: What makes a good patient advocate?

The key to good patient advocacy is reaching policymakers with our stories, experts explained in BIO’s October Coffee Chat and at BIO’s Patient Advocacy Changemakers Event (PACE).

Why it matters: Patient advocates who are learning the work, and seeking to inspire volunteers, heard from old hands about rewards and challenges of advocating for policy that benefits patients. The lesson comes in handy as a new crop of lawmakers heads to Capitol Hill.

“What does good advocacy look like? Why do we advocate? And what are some tips and tricks for effective advocacy?” asked Karin Hoelzer, BIO Senior Director of Patient Advocacy, at the latest BIO Coffee Chat.

We can make a difference: “Advocacy is an opportunity we have in our country we all need to take advantage of,” said Jenny Luray of Research!America. “Many Americans think that they don’t have as much power as they do.”

Tell your stories: “Those who are patient advocates, your experiences, the experiences of the people you represent, are critical,” Jennifer Snow of Apteka told an Oct. 22 panel at PACE.

Keep patient-centered: The Centers for Medicare & Medicaid Services (CMS) used to focus on patient voices, but other stakeholders have grown louder, Snow said. “It’s time to wrench that back and make sure that the patient voice is heard. For that, we’ll need your stories,” she said.

Read about the Coffee Chat on Bio.News.

Read about PACE on Bio.News.

What Else to Read

PDUFA was created to meet patient advocates' demands, and the patient voice still matters: PACE panel. The Prescription Drug User Fee Act (PDUFA) was created following AIDS activists’ complaints that drug development and review took too long, Steve Berman, BIO VP for Science and Regulatory Affairs Strategy, told a panel at BIO’s Oct. 22-23 Patient Advocacy Changemakers Event. PDUFA, which lets the Food and Drug Administration receive fees from drug makers and enables more efficient drug review, will be reauthorized next year. Provisions increasing the patient voice are included in the latest proposal, and patients can influence the reauthorization process, panelists said. Read more on Bio.News.

BIO responds to a Health Affairs article urging rollback of Inflation Reduction Act (IRA) protections for orphan drugs. “Incentives to develop orphan drugs have been critical in encouraging research, and eroding such policies risks starving some of the best ideas in medicine of resources at the exact wrong time for patients waiting to benefit from today’s groundbreaking science,” said a rebuttal from BIO VP of Healthcare Policy & Research Crystal Kuntz, published by Health Affairs this month. Read more on Bio.News.

IRA discourages cancer-drug research, study finds. The introduction of the Inflation Reduction Act (IRA) is associated with a 37% decline in follow-on small-molecule oncology studies, and a 27% decline in lead-indication small molecule approvals, research by Vital Transformation showed. “The findings indicate that the effects of the legislation on late-stage pharmaceutical research may warrant greater attention from policymakers, particularly in oncology,” Vital Transformation said. Read more on Bio.News.

A proposal to regulate investments in foreign biotech through the COINS Act deters American competition with China, writes Peter J. Pitts, President of the Center for Medicine in the Public Interest, in RealClear Health. “China invested heavily in scientific talent, manufacturing capacity, and drug development infrastructure. Meanwhile, American innovators have been wrestling with regulatory uncertainty, reimbursement pressures, and a political environment that too often treats pharmaceutical innovation as a problem,” Pitts writes. “If Congress wants to reverse that trend, it might begin by making America a more attractive place to discover, develop, and manufacture medicines.” Read more here.

Johnson & Johnson cancer treatment RYBREVANT FASPRO™ received FDA accelerated approval for treatment of adults with recurrent or metastatic head and neck squamous cell carcinoma whose disease has progressed on or after platinum-based chemotherapy and immunotherapy. Read more here.

Beltway Report

Both the House and Senate will return this week.