In conjunction with the surge in state legislative efforts to regulate the pharmacy benefit manager (PBM) industry, Congress and federal agencies have ramped up PBM oversight efforts as part of the ongoing battle to lower prescription drug costs. Several bills that address PBM reporting requirements, including increased transparency as it relates to a PBM’s use of spread pricing and the retention of certain rebates and administrative fees, are moving through Senate and House committees. Further, last month the U.S. Department of Health and Human Services (HHS) Centers for Medicare & Medicaid Services (CMS) proposed a rule to increase transparency related to spread pricing in Medicaid-managed care contracts with PBMs, and recently, the Federal Trade Commission (FTC) expanded its ongoing investigation into PBM practices to include information requests from two group purchasing organizations.

This blog post highlights recent Senate activity as well as a proposed bipartisan Senate and House bill that would impact PBM activity in the Medicaid-managed care space. This blog post is the first in a series of two posts detailing recent federal activities aimed at increasing oversight of the PBM industry.

On April 25, 2023, the Senate Health, Education, Labor, and Pensions Committee Chairman Bernie Sanders and Ranking Member Bill Cassidy introduced a package of legislation aimed at lowering prescription drug prices. The package includes four bills, each proposing changes that would address a different piece of the pharmaceutical supply chain. This post focuses on the Pharmacy Benefit Manager Reform Act (PBM Reform Act), which proposes to increase oversight of entities providing pharmacy benefit manager (PBM) services to group health plans and health insurance issuers (i.e., employer-based health insurance coverage).

Though the flurry of state PBM-focused legislation slowed down with the summer recess, there has still been plenty of noteworthy PBM news. This roundup focuses on state Medicaid enforcement activities involving Centene and provides a brief overview of recent legislative activity.

MintzRx is a regular newsletter providing you with everything you need to know to stay abreast of the legal, regulatory, and industry developments across the pharmaceutical supply chain.

On August 7, 2022, after extensive deliberation, Senate Democrats passed their long-awaited reconciliation bill, the Inflation Reduction Act of 2022 (the Reconciliation Bill). In addition to climate and tax provisions, the Reconciliation Bill includes a revised drug pricing reform package that Democrats had approved last month. In this post, we review what passing the long-awaited drug pricing reforms means for Medicare recipients and for drug prices in the United States.

2022 continues to see a surge in state-led PBM enforcement efforts. This roundup provides a brief summary of Louisiana’s complaint against United Healthcare and OptumRx related to its Medicaid program and recent state legislative actions.

As we noted in our last PBM Regulatory Roundup, there has been a wave of state regulation focused on PBM practices in the wake of Rutledge and Webhi. However, PBMs are also facing federal reform efforts. The Pharmacy Benefit Manager (PBM) Transparency Act of 2022 (the Act) was recently proposed in the U.S. Senate and intends to incentivize “fair and transparent” PBM practices, prohibit spread pricing and claw backs of payments to pharmacies, and empower the Federal Trade Commission (FTC) and state attorneys general in enforcement actions to stop “unfair and deceptive” PBM business practices.

At the same time, government watchdogs are also taking action: on June 7, 2022, the FTC announced that it would launch an inquiry into vertically integrated PBMs, and the Office of the Inspector General (OIG) for the Department of Health and Human Services expects to release a report in 2022 following completion of its analysis of Medicaid Managed Care Organization (MCO) PBM pricing.

Continuing our series discussing the CY 2023 Medicare Advantage and Part D Final Rule (Final Rule), this post focuses on the D-SNP related provisions under the Final Rule.  As we discussed, the Centers for Medicare & Medicaid Services (CMS) proposed significant modifications to its regulations governing Dual Eligible Special Needs Plans (D-SNPs).  CMS finalized the majority of its proposals with limited modifications.  This blog summarizes some of the key D-SNP provisions, focusing on the modifications from the proposed rule and CMS’ commentary that provides insight into CMS’ priorities and focus areas.  Please refer to our prior post on D-SNPs for a more in-depth overview of the proposals.

The Centers for Medicare & Medicaid Services (CMS) released its Final Rule on Contract Year 2023 Policy and Technical Changes to the Medicare Advantage and Medicare Prescription Drug Benefit Programs (Final Rule) late last week.  We summarized the major provisions of CY 2023 Proposed Rule in a blog series in January, noting that the proposals sought to increase consumer protections and reduce health disparities, with a strong emphasis on policies impacting individuals who are dually eligible for Medicare and Medicaid. This is the first blog post in our series on the Final Rule in which we discuss policy changes to the maximum out-of-pocket (MOOP) rules requiring that all cost-sharing, including cost sharing paid by secondary payors, be included in the calculations for MOOP.

Last month, the Office of Inspector General for the Department of Health and Human Services (OIG) issued a report finding that Medicare Part D, and Medicare beneficiaries, could reduce spending with increased use of biosimilars. Specifically, OIG recommends that the Centers for Medicare & Medicaid Services (CMS) (1) encourage Part D plan sponsors to increase access to and use of biosimilars, and (2) monitor biosimilar formulary coverage to identify concerning trends. This blog unpacks the OIG’s report.