Iowa Senator aims to reduce cost of prescription drugs

July 28, 2023 by No Comments

Iowa Senator Chuck Grassley is actively advocating for increased oversight of the prescription drug industry. Recently, the Senate Finance Committee voted 25-1 in favor of advancing the Modernizing and Ensuring PBM Accountability Act. This proposed legislation seeks to detach pharmacy benefit managers’ compensation from the drug prices, thereby eliminating any incentives for PBMs to promote higher-priced drugs. Grassley expressed his support for this bill on his weekly public affairs program and revealed that some provisions were taken from the PBM Oversight Act of 2023, which he introduced last week.

According to Grassley, pharmacy benefit managers possess significant authority in determining drug prices, rebates, and the drugs included in a formulary, yet their actions remain largely undisclosed. The proposed legislation also aims to prohibit spread pricing, where PBMs charge Medicaid higher amounts for prescription drugs than they actually pay and ensure proper and accurate payments to pharmacies under Medicaid.

While other committees have already passed PBM reform bills, the Senate Finance Committee holds authority over Medicare and Medicaid, which constitute a substantial portion of the country’s healthcare spending. Grassley emphasizes that PBMs’ influence on prescription drug pricing is substantial, and it is crucial to ascertain whom they benefit—insurance companies, pharmaceutical companies, PBMs themselves, consumers, or local pharmacists.

Grassley acknowledges that this is not the first legislative attempt to increase oversight on PBMs, but he maintains that the need for additional scrutiny is long overdue.

Leave a Comment