Year-End Spending Bill to Feature Reforms for Pharmacy Benefit Managers and Telehealth Access

Bipartisan agreement on extensive health care reforms attached to government funding bill.

Image Credit: Felipe Caparrós - stock.adobe.com

In a significant move, lawmakers have reached an agreement to attach a comprehensive health care package to the year-end stopgap government funding legislation.¹ The details of this package were revealed in text obtained by The Hill, highlighting a blend of reforms and extensions.

The health care provisions, spanning over 500 pages, include key reforms targeting pharmacy benefit managers (PBMs), extensions of Medicare telehealth flexibilities, and measures aimed at combating the opioid crisis and preparing for future pandemics. Following extensive negotiations among congressional leaders from both parties, these reforms are set against a backdrop of bipartisan collaboration.

The proposed PBM reforms stand out as a significant legislative priority that has garnered support from both sides of the aisle but has faced challenges in the past. The 3 largest PBMs—UnitedHealth Group’s Optum Rx, CVS Health’s Caremark, and Cigna’s Express Scripts—responsible for roughly 80% of US prescriptions, have drawn intense scrutiny as lawmakers seek to address rising drug prices and lack of transparency in the industry.

Among the most notable changes is a ban on tying PBM compensation to a drug's Medicare list price. Critics argue that this practice inflates drug costs and ultimately leads to increased fees for PBMs, which retain a portion of discounts as profit. Additionally, the legislation mandates that PBMs fully pass through 100% of drug rebates and discounts to employers or health plans, a move seen as essential for improving pricing transparency.

Legislators also aim to enhance the accountability of PBMs by implementing new reporting requirements. These guidelines will necessitate that PBMs disclose costs and reimbursements related to drugs, as well as any associated fees or discounts. Furthermore, a provision will modify how PBMs are compensated by Medicaid for prescription drugs, banning the controversial practice that allows them to profit from the price differential between what they pay pharmacies and what they charge health plans.

Through its "End Harmful Practices of PBMs Now" campaign, the American Pharmacists Association (APhA) had previously mobilized hundreds of APhA members to engage with their congressional representatives about the impact of PBM practices on pharmacies and patient care, particularly in underserved and rural areas.² Congress responded positively to the association's suggested federal reforms for PBMs in this end-of-year spending package, according to an APhA announcement.

“Pharmacy is united in standing up for our patients to reform the broken PBM marketplace. For years, APhA has advocated for these long overdue reforms to begin to stop PBMs’ harmful business practices that have robbed many communities of the necessary health care services they have come to rely upon,” Michael D. Hogue, PharmD, FAPhA, FNAP, FFIP, executive vice president and CEO of APhA, said in the statement. “We thank our congressional champions who understand there is more work to be done."

The financial implications of these PBM reforms are expected to support other vital initiatives within the package, such as reversing the majority of the recent cuts to physician payments in Medicare.¹ This aspect is particularly significant as CMS finalized substantial payment reductions in November.

The package also includes a 2-year extension of pandemic-related Medicare telehealth flexibilities, allowing patients greater access to telehealth services, regardless of their residency in rural areas. This extension reflects growing recognition of the importance of telehealth in providing care during and beyond the pandemic.

Moreover, critical reauthorizations are included for both the SUPPORT Act, targeting the opioid crisis, and the Pandemic and All Hazards Preparedness Act.

While the inclusion of such extensive health provisions in the spending bill may provoke pushback from some conservative lawmakers who oppose omnibus legislation, the prevailing bipartisan support signals a collective acknowledgment of the urgent need for health care reform. The final package will face scrutiny as it moves through the legislative process, but it marks a hopeful step toward reforming a complex and often opaque health care system.

References

1. Weixel N. Lawmakers seek to rein in PBMs as part of spending bill’s sweeping health deal. The Hill. December 17, 2024. Accessed December 18, 2024. https://thehill.com/policy/healthcare/5045169-health-care-package-pbms-funding-bill/

2. Congress includes APhA-backed PBM reforms in end-of-year spending package. News release. The American Pharmacists Association. December 17, 2024. https://www.pharmacist.com/About/Newsroom/congress-includes-apha-backed-pbm-reforms-in-end-of-year-spending-package