August 12, 2021
(Washington, D.C.) — The Pharmaceutical Care Management Association (PCMA) today issued the following statement on litigation, filed in the U.S. District Court of the District of Columbia, regarding the Trump administration’s final rule Transparency in Coverage:
To avoid higher prescription drug costs for patients, America’s pharmacy benefit managers (PBMs) are challenging, in federal district court, the requirement that PBMs report the historical net price of prescription drugs required in the Trump administration’s Transparency in Coverage final rule.
PBMs support and practice actionable transparency that enables patients, their physicians, and health plan sponsors to make informed decisions on how best to manage prescription drug costs and empowers policymakers with the information they need to make the right policy decisions to lower drug costs for all Americans.
As a result, PCMA is not challenging the portions of the rule that direct plans to provide useful information directly to patients. But we are challenging the portions of the rule that do not meet those important objectives and will not produce information that patients and physicians can use.
These parts of the Trump administration’s transparency rule will drive prescription drug costs higher. By requiring disclosure of “historical” net prices, which are essentially current year net prescription drug prices, the rule will directly provide drug manufacturers access to their competitors’ negotiated rebates, discounts, and price concessions. This in turn will allow drug manufacturers to discount less deeply as they realize their price concessions went beyond those of competitors.
In addition, outside entities will not be able to develop reported information into a useful and understandable format for patients. Unlike health plans and PBMs, third-party application developers will not know patients’ existing insurance enrollment and eligibility or their current benefits and whether they have met a deductible or reached an out-of-pocket limit, and so the third-party applications are likely to cause widespread confusion among patients. Net prices are generally not useful information to patients because their deductible and coinsurance payments are calculated based on negotiated rates, not net prices.
PBMs and health plans already have real-time benefits tools for patients and prescribers, which they can use at the point of prescribing to check on cost-sharing for every patient based on their individual situation and health plan.
The Trump administration based its rule on a statute that allows the U.S. Department of Health and Human Services to require disclosure of information to help plan enrollees to easily understand their health plan’s cost-sharing. The statute did not contemplate disclosure of proprietary pricing. Indeed, Congress’s enactment of the 2020 Consolidated Omnibus Appropriations Act included publication only of aggregate, not drug-specific, prescription drug prices, keeping price concessions confidential, which underscores Congress’s concern about the negative impact that disclosing negotiated price concessions has on drug costs.
To be clear, PBMs support increasing transparency across the entire prescription drug supply chain. As the only entity in the prescription drug supply and payment chain working to reduce prescription drug costs for patients, PBMs will oppose efforts to undermine that mission and to further empower drug manufacturers to increase costs.
PCMA’s lawsuit follows the U.S. Chamber of Commerce’s challenge against the Transparency in Coverage final rule’s machine-readable file requirements filed in the United States District Court for the Eastern District of Texas earlier this week. The Chamber, which represents a broad array of employers and industries, points out that these requirements “are not consumer-focused” and “are in fact counterproductive, wasteful, and unlawful.” The Chamber also states:
“These provisions of the Rule threaten to reduce competition, and ultimately raise costs to consumers, by revealing confidential, commercially sensitive information that competitors currently do not share with each other. The required public disclosure of that closely guarded information runs afoul of long-established protections against the forced disclosure of confidential commercial information, including trade secrets, and is detrimental to the business community as a whole.”
PCMA supports actionable transparency that includes:
- Providing real-time benefit tools, so physicians and patients know, at the point of prescribing, what drugs are on formulary and patients’ cost-sharing.
- Providing information to clients on all contract terms, including how PBMs are paid for their services and negotiated rebates.
- Providing government regulators, such as CMS for Medicare Part D, information on price concessions, costs, and service fees.
- Providing Medicare Part D prescription drug event and rebate data to the Medicare Payment Advisory Commission and the Medicaid and CHIP Payment and Access Commission, so they can better advise Congress and other policymakers.
View an infographic, The Right Transparency on Prescription Drugs Costs, which outlines the types of transparency that reduce prescription drug costs and the wrong types of transparency that increase drug costs.
In addition, PCMA recently announced a set of industry principles that reinforce PBMs’ commitment to interacting with employer clients through transparent contracting that best serve their needs in order to reduce prescription drug costs.
PCMA is the national association representing America’s pharmacy benefit managers (PBMs). PBMs administer prescription drug plans for more than 266 million Americans who have health insurance from a variety of sponsors including: commercial health plans, self-insured employer plans, union plans, Medicare Part D plans, the Federal Employees Health Benefits Program (FEHBP), state government employee plans, Medicaid plans, and others.