Paul Glasser Mar. 1, 2016, 9:58am


A watchdog group says a Congressional bill that is designed to increase transparency for Medicare Part D could actually lead to higher drug costs.

HR 244 was introduced last year and would require pharmacy benefit managers, who process and pay prescription drug claims, to update drug prices at least once every seven days and disclose the sources used to make the adjustment. 

Rep. Ralph Abraham (R-LA) co-sponsored the bill and said it will ensure increased transparency and guarantee that rural pharmacies will receive the correct reimbursement. He represents the 5th District in northeastern Louisiana, and said that drug prices fluctuate and many small rural pharmacies are reimbursed based on outdated information.

“As a rural doctor, Dr. Abraham supports rural community pharmacies and their call for more transparency in the pricing process,” a representative from his office told the Louisiana Record.

Abraham said his district contains many seniors and chronically ill patients who depend on rural pharmacies. HR 244 will help these pharmacies remain financially viable, he said.

The Council for Citizens Against Government Waste, however, recently published a letter criticizing HR 244 and claimed that the bill will interfere with the market dynamics of Medicare Part D.

“The most significant impact of the bill would be to undermine the negotiations that occur among pharmacy benefit managers, drug companies and pharmacies,” Tom Schatz, president of the council, wrote in the letter. “Such negotiations have succeeded in driving down the cost of prescription drugs, not raising them.”

Schatz wrote that negotiations have increased competition and encourage pharmacists to search for the best deal. The savings are passed on to consumers and taxpayers, he wrote.

The changes proposed by HR 244 would require the disclosure of sensitive financial information and would interfere with market negotiations, Schatz asserted. He claimed HR 244 will lead to higher costs for prescription drugs.

“Government interference in market negotiations is not the answer,” Schatz wrote.

He said that he understood why legislators might want to support HR 244 given the recent controversy over extreme prices hikes by Valeant and Turing Pharmaceuticals. Schatz, however, asserted that the bill would not affect those drugs, but would curb the use of mail-order pharmacies.

On the other hand, the National Community Pharmacists Association announced it would support HR 244 because it will address a serious problem in Medicare Part D plan and the military’s TRICARE program.

Douglas Hoey, the association’s chief executive officer, said pharmacy benefit managers are often slow to update reimbursement information.

“Community pharmacists routinely incur losses of approximately $100 or more on many prescriptions because insurance middlemen, known as pharmacy benefit managers, reimburse pharmacies well below their cost to acquire and dispense generic prescription drugs,” Hoey said. “Buy high and sell low is no prescription to stay in business. This situation jeopardizes pharmacists’ ability to continue to serve patients because it leaves community pharmacies with unsustainable losses.”

HR 244 has been referred to several Congressional committees, but a spokesman for Abraham said his office has not been notified when the bill might come up for a vote.

Organizations in this Story

National Community Pharmacists Association
100 Daingerfield Rd
Alexandria, VA 22314

Council for Citizens Against Government Waste
301 Pennsylvania Avenue Northwest
Washington, DC 20001

Get notified the next time we write about any of these organizations!

More News