Experts skeptical of 'drug price transparency' bills

Sen. Ron Wyden (D-OR) last week introduced legislation that he says would increase pricing "transparency" among pharmacy benefit managers (PBMs). 
PBMs are the third-party administrators of prescription drug plans for consumers who have health insurance from commercial health plans, self-insured employer plans, Medicare Part D plans, union plans, the Federal Employees Health Benefits Program, and state government employee plans.
Wyden's bill, the Creating Transparency to Have Drug Rebates Unlocked (C-Thru) Act, would require PBMs to disclose the rebates provided by drug manufacturers, as well as the amount of those rebates that are passed on to health plans. Rep. Doug Collins (R-GA) has introduced a similar bill in the U.S. House.
“More and more, Americans are beginning to wonder whether prescription medicine will be available and affordable for their families," Wyden said in a statement emailed to American Pharmacy News in response to requests for comment, "and there is little information about why these drugs are so expensive. This bill will shine a light on this opaque industry and promote competition to bring down the cost of prescription drugs.”
Devon Herrick, a health care expert with the National Center for Policy Analysis, is skeptical of the legislation, arguing that PBMs actually help keep prices lower, including by negotiating rebates with pharmaceutical companies.
"Drug rebates apply to brand drugs (not generic)," Herrick told American Pharmacy News. "If PBMs jacked up the price of drugs and did not perform a service to plan sponsors (insurers/employers/state Medicaid agencies), the sponsors would not hire them. It makes a good story nonetheless when drugmakers argue their prices are not as high as people think because they give rebates of about 30 percent to PBMs. The research I’ve seen estimates about 90 percent of the rebates flow back to plan sponsors; whereas PBMs keep about 10 percent as drug plan administration fees."
The Pharmaceutical Care Management Association (PCMA), which represents the PBM industry, also pushed back on the Wyden bill.
"PBMs support the right kind of transparency that offers consumers and plan sponsors the information they need to make the choices that are right for them," PCMA President and CEO Mark Merritt said in a statement released after the introduction of Wyden's bill. "This bill will increase premiums by undermining the tools employers, unions and public programs, including Medicare, used to reduce prescription drug costs."