Hurry Up and Wait: Will PBM Reforms, Transparency and Data-Sharing Requirements Ever Get Enacted into Law?

Hurry up and wait. It’s a typical occurrence on Capitol Hill, and it’s an exercise that frustrates stakeholders, but especially Congressional staff. Having been a Congressional staffer on the Senate Finance Committee myself, I know the feeling. But it’s the nature of beast (i.e., the institution), as they say. 

Why is this concept of hurry-up-and-wait so relevant today?   

As I told you in a September blog post (which you can find here), there was a significant amount of momentum behind legislation introduced in the House of Representatives in mid-July that would require PBMs to disclose certain information to plan sponsors; codify the Hospital Transparency and Transparency in Coverage (TiC) Rules with increased penalties for non-compliance; and require owners of provider networks to share pricing and claims data in certain cases. This legislation enjoyed bi-partisan support, too. 

But this legislative package – like other legislative priorities – ran into the buzz-saw of the fight over funding the government; a month’s long August recess; then the ensuing battle over the House Speakership; also spiking world events; and now…wait for it…another fight over funding the government.  

So, the question remains:    

Despite all of the hard work that was put into the House PBM/Transparency/Data-Sharing legislative package (i.e., the “hurry up”) – coupled with the “wait” of over three months now – will this legislative package, or some iteration of it, ever come to fruition?   

Here are my quick thoughts:   

While you can “never say never,” the Transparency and Data-Sharing requirements included in the House package are less likely to become law at this point in time.   

That said, there is a strong likelihood that the PBM reforms make their way into the law by the end of the year or at least by the end of the second quarter of 2024. 

Let me expand on my quick thoughts:  

PBM Reforms 

Although the House legislative package required PBMs to disclose certain information, all eyes are on a bi-partisan Senate bill (S. 1339) that requires the disclosure of even more information than the House bill. Here, PBMs would be required to disclose to plan sponsors the fees they charge, the amount of rebates and discounts they retain, and even whether and when a PBM is steering patients to pharmacies owned by the PBM.  

This Senate bill would also prohibit certain PBM practices like “spread pricing” (where a PBM charges a health plan more than the PBM pays for the drugs covered by the plan). In addition, S. 1339 would require PBMs to fully “pass-through” the rebates, fees, discounts or any other compensation they receive to the health plan and its participants. 

But wait…there’s more… 

There are two other PBM-related bills that the Senate Commerce and Finance Committees approved earlier this year, and it is highly likely that these bills will be combined with S. 1339 and moved as one, large PBM reform package.   

The Senate Finance Committee bill includes most of the same PBM reforms as S. 1339, but this bill extends these reforms to Medicaid, Medicare and Medicare Advantage. 

The Commerce Committee bill would direct the Federal Trade Commission (FTC) to increase their scrutiny of PBMs, PBM practices and the PBM market. If enacted, I believe this increased scrutiny of PBMs will become a priority of the FTC (who is already investigating PBM practices). With the elevated concern that only three PBMs control 80 percent of the PBM market, anti-trust-related actions taken by the FTC – along with the Department of Justice – are not out of the realm of possibility. 

Transparency and Data-Sharing Requirements 

The reason I said you can “never say never” above is because Capitol Hill is a strange place.  When a particular policy change appears to be dead-as-a-doornail, right before the clock strikes midnight this policy change may spring-back to life and get slipped into a larger legislative package that is on the brink of passage by both the House and Senate.   

That could happen with the codification of the Hospital and TiC Rules with increased penalties.  We could even see some Data-Sharing requirements, requiring owners of the provider networks to share a complete and accurate set of claims data with a plan sponsor for purposes of auditing the plan’s claims adjudication process. 

Crystal Ball 

If I was a betting man (which I am), I would bet against the last-minute addition of the Transparency and Data-Sharing requirements because the odds are pretty low at this point. But the odds are not 0 percent, so if you are feeling lucky, there’s still a long-shot chance. 

When it comes to the PBM reforms – and the Senate PBM legislative package I described above (e.g., S. 1339 and the Senate Commerce and Finance Committee bills) – I give this an 80 percent to 90 percent chance of happening.   

However, we could have another hurry-up-and-wait exercise where energy is expended to (1) combine all of these Senate PBM bills and (2) make certain tweaks based on “favor requests” from lobbyists, only to see this PBM package get stuffed at the line of scrimmage. But I am betting that there will be enough pressure to break the plane of the goal-line and get to the President’s desk. 

Stay tuned as the House, Senate and the White House try to resolve the government funding stalemate and Congress endeavors to put together an end-of-year legislative package. It’s going to be an interesting 6 to 8 weeks. 

The information provided does not, and is not intended to, constitute legal advice; instead, all information and content herein is provided for general informational purposes only and may not constitute the most up-to-date legal or other information.