Senate Finance Committee Considers Tester Bill to Cut Cost of Prescription Drugs for Montanans

Phair Relief Act would give community pharmacists needed relief from burdensome fees, passed on to consumers as lower costs. Senator: “Montanans’ drug costs are too high. This bipartisan bill will help bring them down”

U.S. Senator Jon Tester’s bipartisan bill to lower prescription drug costs for seniors and families, and boost certainty and transparency for Montana’s community pharmacies was considered by the Senate Finance Committee today. The Committee advanced a number of Tester-backed proposals to shine a light on the complicated web of drug pricing.

Tester’s legislation would impose a five-year freeze on the fees that community pharmacies have to retroactively pay to pharmacy benefit managers, creating a savings that would be passed to Montana customers in the form of lower costs. In addition, the bill requires implementation of standardized quality measures to heighten transparency and shed light on the ways pharmacies are reimbursed and the rebates that pharmaceutical middlemen secure, so that consumers can better understand why their prescriptions cost what they do. The Committee adopted a number of provisions from Tester’s bill today, and he will continue pushing for the provisions – like the fee freeze – that were not taken up.

“Montanans’ drug costs are too high,” Tester said. “This bipartisan bill will help bring them down by giving community pharmacists needed relief from burdensome fees—that’ll be passed on to their customers as lower costs. And it goes a step further by shining a light on how pharmacies are reimbursed for claims – requiring transparency and standardized reporting so folks can get the full picture of how much their prescriptions cost and why.”

Under the current system, pharmacy benefit managers (PBMs) act as middlemen between pharmacies and insurers, negotiating price concessions and managing reimbursements while charging pharmacies a fee for their services. Recently, PBMs have started imposing a variety of retroactive fees, even on accurate reimbursement claims, months after dispensing a drug to a patient. This makes it challenging for pharmacies to predict the financial hit from PBMs year to year, and is particularly burdensome for small, rural community pharmacists. These fees not only contribute to an unsustainable environment that forces many community pharmacies to shutter their doors, but also increase seniors’ out-of-pocket costs at the point of sale for their medications.

Tester’s proposal will put a five-year freeze on these fees, and establish enhanced oversight. This builds on the legislation Tester introduced earlier in the year, the Improving Transparency and Accuracy in Medicare Part D Drug Spending Act, which prevents PBMs from clawing back fees on prescription drug claims.

When the Centers for Medicare and Medicaid Services proposed a similar policy in a proposed rule last fall, they estimated that requiring PBMs to account for these retroactive DIR fees at the point of sale would save seniors between $7.1 and $9.2 billion over 10 years on their out-of-pocket drug costs. The Trump Administration failed to finalize this proposed rule, even though Tester and 26 other bipartisan Senators wrote in support of the proposal in February.

Tester is pushing numerous bills through Congress to lower the cost of prescription drugs, including:

  • The CREATES Act forces drug makers to turn over their samples to generic drug makers so cheaper versions of the medication get to market more quickly.
  • The C-THRU Act forces Pharmacy Benefit Managers to disclose information on their pricing agreements with drug companies, insurance companies, and pharmacies so Montanans can know where exactly their money is going.
  • The SPIKE Act requires drug companies to disclose publicly their reasoning for increasing prescription drug prices.

    Read more about Tester’s efforts to lower prescription drug prices HERE.