Senators move to protect indie pharmacies 

WASHINGTON – Sen. Peter Welch, D-Vt., along with Sens. Roger Marshal, R-Kan., Mark Warner, D-Va., and Bill Cassidy, R-La., has introduced legislation to limit what they say are abusive pricing practices by pharmacy benefit managers. 

The “Protecting Pharmacies in Medicaid Act” cracks down on what they call “spread pricing” - charging Medicaid more than PBMs charge pharmacies for a drug, driving up costs for Medicaid and short-changing pharmacies. The legislation would save Medicaid an estimated $2 billion over 10 years, they say. 

“Pharmacies are essential to the care and wellbeing of our rural communities,” Welch said. “But spread pricing by pharmacy benefit managers is making it harder than ever for community pharmacies to stay in business and lining the pockets of middlemen. This bill takes an important step to limit PBMs’ abusive pricing practices, protect our pharmacies and support our rural communities. I’m grateful to have Senators Marshall, Warner, and Cassidy’s partnership on this bipartisan legislation to protect the health of Vermonters and Americans across the country.”   

The Protecting Pharmacies in Medicaid Act would require Medicaid’s payments to PBMs to be passed directly to pharmacies, excluding administrative fees. It would also requires all pharmacies participating in state Medicaid programs to report National Average Drug Acquisition Costs (NADAC) to increase transparency in drug pricing and ensure reimbursements to pharmacies reflect the true costs of prescription drugs.   

The legislation is endorsed by the Food Industry Association, National Association of Specialty Pharmacy, National Association of Chain Drug Stores and the National Community Pharmacist Association. 

“Time and time again, PBMs have been caught using tactics like spread pricing to take advantage of the system, lining their pockets while harming patients and the taxpayers they are supposed to serve,” said B. Douglas Hoey, CEO of the NCPA. “Through spread pricing in Medicaid alone, PBMs can cost taxpayers hundreds of millions of dollars each year. These policies nearly made it through Congress at the end of last year. That is why we are grateful for Senators Welch, Marshall, Warner and Bill Cassidy for introducing the Protecting Pharmacies in Medicaid Act, which not only promotes transparency and prohibits spread pricing, but it makes sure pharmacies are paid fairly, allowing them to continue serving their communities.”   

• Learn more about the Protecting Pharmacies in Medicaid Act.  
• Read the full text of the bill.