The pharmacy benefit management (PBM) legislation to watch
Optum Rx closely monitors and acts to influence legislation that has the potential to adversely impact pharmacy benefits offered by both fully insured and self-insured clients.
Here is a quick summary of the latest pharmacy benefit legislative and regulatory issues happening this winter:
- Pending federal legislation provisions include bans on spread pricing, mandated rebate pass-through to clients, commercial cost-sharing limits
- Transparency in coverage mandate enforcement deferred
- Problematic legislation fails to advance in North Carolina and California
- New York withdraws proposed regulations for PBMs
Federal legislation: Ban on spread pricing and more
Over the course of this year, congressional committees have been taking action to consider and approve bills that have various provisions impactful to PBM clients. Provisions in the bills vary, but among the provisions are
- Ban on spread pricing in the commercial market and in Medicaid
- 100% rebate pass-through to clients
- Commercial cost-sharing limits on highly rebatable drugs
- Delinking of PBM payment from the list prices of drug under the Medicare Part D program
- Capping Medicare member cost-share at net cost.
Additionally, nearly every piece of legislation contains some aspect of information reporting to clients, pharmacies and/or the federal government.
Congress is expected to package various bill provisions together and attach it to other legislation that is moving forward in late 2023 or early 2024.
Why this matters
Optum Rx continues to advocate to congressional leaders for meaningful choices in how clients offer prescription drug benefits and to protect the pharmacy benefit tools that matter most to clients.
We highly encourage clients to get involved with efforts to protect against legislation that will reduce their options and increase their costs. We know clients' voices have important influence with legislators.
Please contact your Optum Rx Account Executive if you are interested in participating in advocacy efforts.
Federal legislation: Court vacates 2021 NBPP Final Rule cost sharing assistance provision
On Sept. 29, 2023, the U.S. District Court for the District of Columbia issued an opinion vacating a previous Department of Health and Human Services (HHS) rule addressing the treatment of manufacturer cost sharing assistance in calculating cost sharing for purposes of the annual limits on cost sharing enacted by the Affordable Care Act (ACA). The 2021 NBPP Final Rule stated that plans subject to the annual limit on cost sharing are not required to count manufacturer cost sharing assistance towards the ACA annual limitation on cost sharing.
Given the lack of direction in the full court opinion, the impact is not immediately clear at this time.
Optum Rx maintains the position that the true cause of high prescription drug costs are the list prices set by manufacturers, and we stand behind our tools designed to bring drug costs down for clients and consumers. Optum has developed a suite of programs designed to prevent drug manufacturer copay assistance programs from disrupting plan benefits while continuing to promote the ideal member experience, adherence and overall affordability.
At this time, there is no definitive information to conclude what, if any, benefit election changes clients must make since the District Court’s opinion did not specify these details. Optum will continue to monitor and evaluate this matter, releasing relevant communication as necessary.
Transparency in coverage update
On Sept. 27, 2023, the Departments of Labor, Health and Human Services, and the Treasury released new guidance concerning the prescription drug file required under the 2020 Transparency in Coverage Final Rule. The Final Rule requires disclosure of negotiated rates and historic net prices relating to prescription drug pricing on a public website through machine-readable files (MRF).
This prescription drug file requirement was to be effective Jan. 1, 2022, but on Aug. 20, 2021, the Departments deferred enforcement pending further agency consideration and rulemaking. In this new Sept. 27 guidance, the government rescinded its decision to defer enforcement and indicated that no further rulemaking is required. The Departments also noted that they will be developing technical requirements and an implementation timeline in future guidance.
Optum Rx has been prepared to support the MRF process since the original implementation date of 2022. We anticipate that the Departments’ new technical requirements will require some changes that will need to be incorporated into our existing process, and we are confident that we will be able to incorporate any changes with ease.
Optum will continue to monitor for updates from the Departments regarding the machine-readable files and will communicate relevant updates as needed.
Problematic legislation fails to advance in states
The legislature in North Carolina has adjourned without taking further action on House Bill 246. This means that the provisions in the bill concerning minimum pharmacy reimbursement at NADAC plus a dispensing fee aligned with the State’s Medicaid program, a ban on spread pricing, and mandating that “any willing pharmacy” can join the network are no longer threats for the remainder of the year. This success was achieved in large part to the extensive lobbying efforts carried out by UHG External Affairs and the Pharmaceutical Care Management Trade Association (PCMA).
Due to the successful lobbying efforts of the Optum Rx advocacy team, both a point-of-sale rebate bill and a gold carding bill failed to advance in California’s legislature this session. Senate Bill 873 required that an enrollee’s defined cost sharing for each prescription drug be calculated at the point of sale based on a price that is reduced by an amount equal to at least 90% of all rebates received in connection with the dispensing of the drug.
California Senate Bill 598 mandated that a health plan may not require a contracted health professional to obtain a prior authorization for any covered health care services if, in the most recently completed one-year contracted period, the health plan approved not less than 90% of the prior authorization requests submitted by the health professional.
New York withdraws PBM proposed regulations
The New York State Department of Financial Services (DFS) recently published for public comment proposed regulations that would limit or eliminate many PBM tools and practices used to lower pharmacy benefit costs for clients. On Oct. 31, DFS announced that they have withdrawn the proposed PBM regulations and have instead adopted a replacement final regulation focused entirely on PBM licensing requirements. The final regulation does not contain provisions from the original proposed rule regarding minimum pharmacy reimbursement at NADAC plus a dispensing fee, restricting use of PBM-affiliated mail and specialty pharmacies, freezing the formulary during the plan year and many other provisions that were concerning to PBMs and PBM clients.
Optum Rx strongly opposed the finalization of the proposed regulations. Additionally, Optum Rx clients voiced their concerns about the proposed regulations with the DFS. If you sent an email or letter, it is due in large part to your efforts that the proposed regulations were withdrawn. Furthermore, you may want to consider issuing a public statement applauding DFS’ decision to withdraw the regulations or directly contacting DFS to thank them for withdrawing the regulations.
It’s important to note that DFS indicated in its withdrawal notice that it is reconsidering the parts of the proposed rule that didn’t make it into the final rule, which means we may see future rulemaking on these same issues in the future.
What you can do
Optum Rx continues to advocate to congressional leaders and their staff for meaningful choices in how clients offer prescription drug benefits and to protect the pharmacy benefit tools that matter most to clients. We are actively involved in advocacy both as Optum Rx and through our External Affairs team. We also advocate through our trade association, PCMA, and use both social media and paid advertising through the Coalition for Affordable Prescription Drugs.
We highly encourage clients to get involved with efforts to protect against legislation that will increase your costs. We know clients’ voices have influence with legislators, and we want to help you be heard.