Legislative Updates Shaping Managed Care Pharmacy: Adam Colborn, JD

In a comprehensive policy update, Adam Colborn, JD, associate vice president for congressional affairs at the Academy of Managed Care Pharmacy (AMCP), highlighta a wave of over 500 state-level bills poised to have an impact on managed care pharmacy. Central themes include reforms targeting pharmacy benefit managers (PBMs) and 340B hospitals—both under increasing scrutiny for their roles in drug pricing. He also discusses the Medicaid VBPs for Patients (MVP) Act (H.R. 2666/S. 4204), a federal initiative aimed at improving transparency in how drug prices are set and reported.

This transcript was lightly edited for clarity; captions were auto-generated.

Transcript

Can you discuss some of the recent legislations/regulations and their impact on managed care pharmacy?

The state level is going crazy. there's a lot of legislation we're tracking; almost 500 bills at the state level that impact managed care pharmacy. There's a lot of AI [artificial intelligence] activity at the state level as well, mostly focused on utilization management, so step therapy, prior authorization, that sort of thing.

At the federal level, I think there's a lot that's on the table, but not a lot that has happened recently. We saw PBM reform was included in the December package that ultimately fell apart at the last minute. I think that's still on the table for 2025. The folks on the Hill that I've spoken to think it's more likely that it will be an end-of-year package. There was some question, will that be included in a reconciliation bill? The sentiment that I'm hearing is that there's bipartisan support for these PBM reform packages, especially with the December version that was basically fully negotiated and agreed to. They don't want to put it in something that's going to be very partisan. They want to keep it as an option for a bipartisan endeavor later in the year.

I think there's some other big things that, again, are on the table, but maybe not a sure thing. 340B reform is an increasingly large conversation. It seems like the hospitals and pharmaceutical manufacturers have wrestled each other into a bit of a stalemate. There's this growing idea that reform is needed on the Hill, but no one can agree to what the exact reforms should be. We're seeing an emerging reliance on 340B hospitals in certain sectors of the health care industry. Some of these health care benefit companies that are directing enrollees to 340B hospitals, either via telemedicine or going in person, that's a little bit new. I think that may motivate some additional conversation on the Hill. I'm not sure that it will translate to true reform. I think it's always easy to do transparency, or at least more easy to do transparency than it is to do true reform, but I think those are some of the big ones on PBM reform. If you've been following the issue, you know it's the same sort of spread pricing, delinking, reporting provisions that have been included in previous packages.

With Congress considering reforms related to PBMs, what potential changes could have the most significant impact on drug pricing transparency and patient access to affordable medications?

When it comes to drug price transparency, I'm not sure a lot of the PBM reforms touch directly on that. It tends to be focused on the transparency around PBM fees. Delinking focuses on shifting the amount that is reimbursed to a flat fee regardless of the cost of the drug. In many cases, more expensive therapy has a higher fee. Spread pricing uses not a similar arrangement, but with high price drugs, there's greater capacity to negotiate lower prices and retain a difference between that negotiated rate and what you've negotiated with the health plan as a PBM. I don't know that those directly affect the price of drugs, but people will consider it as part of their overall prescription drug benefits. There's a lot of transparency provisions there.

I think one that's interesting to me is the Medicaid VBPs for Patients Act, or MVP Act. That is a bipartisan bill last year, hasn't been reintroduced yet, that would clarify some definitions in the Medicaid best price rule. It would codify the best price rule, and then it would also, for the first time, create federal definitions around average manufacture price and wholesale acquisition cost. Right now, the multiple best price rule sort of directs parties to use those figures in their calculations of their best price, but it doesn't go into all of the needed detail on how that might be calculated. There's a couple of different ways you could cut it, that affect the total price, but there's also no federal definition, and so there's uncertainty about exactly how you're supposed to calculate it. I think the MVP Act would introduce transparency, and then those numbers are also reported to Medicaid. That, particularly for Medicaid beneficiaries, will introduce access to drugs, high-cost drugs like cell and gene therapies, that they may not have access to currently because they're under a value-based arrangement that's just not available in Medicaid.