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Published on Monday, March 20, 2023

APhA applauds new federal bipartisan PBM legislation

The American Pharmacists Association (APhA) applauds the introduction of the Drug Price Transparency in Medicaid Act, which would reign in PBMs’ unfair and anticompetitive business practices that are harming the viability of our nation’s pharmacies.

This bipartisan legislation, which was introduced by Representatives Buddy Carter, Vicente Gonzalez, Elise Stefanik, Deborah Ross, Rick Allen, and Jake Auchincloss, addresses spread pricing secrecy in Medicaid and provides greater accountability and oversight of PBMs and their actions.

“APhA strongly supports this legislation to eliminate one of PBMs’ harmful business practices that is increasing drug costs at the expense of Medicaid patients and creating ‘pharmacy deserts’ in minority and underserved communities, where the neighborhood pharmacy may be the only health care provider for miles,” said APhA Interim Executive Vice President and CEO Ilisa BG Bernstein, PharmD, JD, FAPhA.

“It’s way past time to put patients over PBM profits, and Congressional action is overdue. APhA will continue working with both federal and state policymakers to restore transparency, accountability, and equity to the health care marketplace,” concluded Bernstein.

Spread pricing is a practice in which a PBM charges the state or health plan more than they pay the pharmacy for a medication and then keeps the “spread” as a profit, often reimbursing the pharmacy for less than their cost to acquire the drug. This hurts pharmacies’ ability to stay in business and provide care to the vulnerable Medicaid beneficiaries whom they serve.

In a recent survey of pharmacists conducted by APhA, 82% of respondents agreed that spread pricing impacts their pharmacy and the patient care they provide.

This legislation would also move all state Medicaid managed care programs to a market-based reimbursement model that more closely reflects the true acquisition costs of prescription drugs in Medicaid plus a fair professional dispensing fee.

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