Earlier this month, pharmacy benefit managers (PBMs) were called before the Senate Finance Committee to answer questions about how their businesses impact drug prices for Americans. While the executives deflected criticism and pointed to issues like legal challenges to biosimilars as playing a key role in keeping drug prices high, lawmakers and officials are taking steps to rein in PBMs.
Earlier this month, pharmacy benefit managers (PBMs) were called before the Senate Finance Committee to answer questions about how their businesses impact drug prices for Americans. While the executives deflected criticism and pointed to issues like legal challenges to biosimilars as playing a key role in keeping drug prices high, lawmakers and officials are taking steps to rein in PBMs.
This week, Representative Peter Welch, D-Vermont, announced 2 new bills targeting PBMs’ practices. The first bill would prevent PBMs from imposing retroactive fees on pharmacy drug sales, while the second would prohibit PBMs from excluding small, independent pharmacies from joining preferred pharmacy networks that fill prescriptions for Medicare beneficiaries.
According to Welch, these bills will address 2 significant threats to local pharmacies to help ensure fair competition and keep small pharmacies in business.
Separately, Dave Yost, attorney general of the state of Ohio, has filed a lawsuit against the PBM OptumRx.
According to the complaint, filed in Franklin County, Ohio, OptumRx, which served as the Ohio Bureau of Workers Compensation (BWC)’s PBM from 2009 to October 2018, breached its contract with the state. The breaches alleged include failure to provide a guaranteed discount on generic drug prices, resulting in nearly $16 million in damages, and making misrepresentations to the state in order to be selected as its PBM.
The complaint explains that, in 2009, the BWC sought to enter into a pass-through contract with a PBM, in which the selected PBM would receive only administrative fees for its transactions conducted on behalf of the BWC. In such an arrangement, the PBM would be obligated to pass through the costs of drugs without markup, eliminating the possibility of spread pricing or rebates.
“Deprived of the opportunity to ramp up profits,” says the complaint, the PBM “found another way to add to its bottom line at the expense of BWC—by failing to provide the promised and agreed to pricing discounts for drugs purchased by BWC claimants.”
The complaint explains that OptumRx did not comply with its contractual duty to provide minimum average discounts of 74% off average sales price to BWC, as determined by an independent consultant hired to examine compliance. When BWC threatened to terminate the contract, OptumRx amended the contract. According to the BWC, the PBM then failed to meet its obligations under the amendment. Later, the PBM also increased the prices of drugs without explanation.
“When challenged by BWC about its failure to abide by the [agreement],” reads the complaint, OptumRx “tellingly, did not deny BWC’s obligations…instead Defendant admitted it had breached the agreement.”
Ohio is seeking a trial by jury and has asked for compensatory damages, punitive damages, all costs of litigation, and other relief the court deems to be appropriate.
In a statement, Yost said that the state’s review of PBM practices is ongoing and called this lawsuit “the first raindrops” in a coming storm.
Budget Impact Analysis of Biosimilar Natalizumab in the US
Projected savings from biosimilar natalizumab were $452,611 over 3 years, driven by decreased drug acquisition costs and a utilization shift from reference to biosimilar natalizumab.
Biosimilars in America: Overcoming Barriers and Maximizing Impact
July 21st 2024Join us as we explore the complexities of the US biosimilars market, discussing legislative influences, payer and provider adoption factors, and strategies to overcome industry challenges with expert insights from Kyle Noonan, PharmD, MS, value & access strategy manager at Cencora.
Biosimilars Policy Roundup for April 2024—Podcast Edition
May 5th 2024On this episode of Not So Different, The Center for Biosimilars® glances back at all the major biosimilar policy updates from April, including 2 FDA approvals, 1 European approval, and several insights into possible policy changes from the Festival of Biologics USA conference.
Hesitancy in MENA Nations to Adopt WHO Biosimilar Guidelines Hinders Market Development
July 17th 2024The World Health Organization’s (WHO) new guidelines for biosimilar approvals aim to save time and money for manufacturers in the Middle East and North Africa (MENA), but hesitancy among nations to adopt the guidelines is stifling market development of biosimilars.
BioRationality: Time to Get Rid of PBMs if Biosimilars Are to Succeed
July 15th 2024Sarfaraz K. Niazi, PhD, discusses the challenges with pharmacy benefit managers (PBMs) that plague the biosimilar industry and new legislation that attempts to reform their practices and encourage biosimilar adoption.