As the US Senate Committee on Finance resumes work on its proposed health reform legislation this morning, it faces new anger over plans to require pharmacy benefit managers (PBMs) to disclose certain drug price information.

On Friday, at its last working session on chairman Max Baucus’ America’s Healthy Future Act, the panel adopted an amendment proposed by Democratic Senator Maria Cantwell which would require PBMs to disclose to the federal government and health plans the difference between the amounts that they receive from plans for prescription drugs and the prices which PBMs actually pay for them. The disclosures would apply to PBMs which participate in the Medicare programme’s prescription drug benefit, known as Part D, and the state “health insurance exchanges” envisioned in Sen Baucus’ bill.

Under her proposal, PBMs would be required to provide plan sponsors and state insurance exchange commissioners with access to data in the following three areas: - a breakdown of prescriptions provided through retail pharmacies and mail-order pharmacies, and the generic drug dispensing and substitution rates of each; - the average aggregate amount and characterization of rebates and other discounts paid by manufacturers, and the aggregate amount kept by PBMs; and - the average aggregate difference between the amount the PBM is paid by the plan and the average aggregate amount the retail and mail-order pharmacies are paid, respectively, for dispensing a prescription.

This information-sharing would enable health plan sponsors to make decisions about which PBM offers them the best value, say the bill’s supporters, "We want consumers to benefit as much as possible from the discounts they are able to negotiate," added Sen Cantwell.

Her amendment was welcomed as “common sense” by the National Community Pharmacists Association (NPCA). __"PBMs routinely gobble up significant shares of nearly every prescription drug transaction, passing the costs on to patients and plan sponsors often left in the dark as premiums increase," said the Association’s chief executive, Bruce Roberts.

According to the NPCA, PBMs commonly bill plan sponsors much more than they reimburse pharmacies for dispensing a prescription and pocket the difference, while rebates from brand-name drug manufacturers are passed on to plan sponsors only after the PBM retains a large share. The pursuit of more rebates “to pad PBM profits” has been known to lead them to switch patients from generic drugs to equally effective, pricier brand-name medicines, the group adds, pointing out that, traditionally, plan sponsors “have been aware of little to none of these and other questionable PBM practices.”

In July, the House Energy and Commerce Committee approved a similar amendment to its health reform plan, HR 3200, and the Congressional Budget Office (CBO) indicated to House staff that the provision would not increase federal spending.

However, the Pharmaceutical Care Management Association (PCMA), which represents PBMs, described Sen Cantment’s amendment as “a step backward” which would increase prescription drug prices because it “would force PBMs to disclose information that would give manufacturers and drug stores more leverage in drug-price negotiations."

The PCMA says it “categorically rejects the notion that PBM disclosure is budget-neutral - indeed, it will raise costs for both taxpayers and consumers.” The group points out that a similar provision first put forward by Sen Cantwell in 2003 would, the CBO then estimated, increase the cost of the Medicare drug benefit by 10%, or $40 billion over ten years. In 2007, a revised CBO estimate found the measure could increase drug costs as much as $10 billion.

“For its part, the Federal Trade Commission (FTC) has warned that PBM disclosure of such information would undermine the ability of consumers to find affordable coverage options. For reasons such as these, 30 states have considered and rejected legislation similar to the Cantwell amendment,” adds the PCMA.

- The Senate Finance panel began marking up Sen Baucus’s “Modified Chairman’s Mark” of the bill last Tuesday. On Friday, after they finished work for the day, he stated that, since the mark-up began, another 42,000 Americans lost their health care coverage, more than 4,000 people had filed for bankruptcy because of medical costs “and tragically....more than 180 people lost their lives because they lacked health coverage.”