House Health Panel Advances Legislation on PBM’s, Generic Drugs

May 18, 2023

The Energy and Commerce Health Subcommittee on Wednesday voted to advance a series of healthcare bills, largely on a bipartisan basis. The bills included reforms to the practices of pharmacy benefit managers (PBMs), improving access to generic drugs, and increasing transparency into the prices that hospitals, laboratories, and insurance companies charge.

Of particular interest to the life sciences community are measures that would:

• Impose new transparency requirements on PBMs and ban “spread pricing” in Medicaid, where PBMs charge more than they pay for a drug and keep the difference. (H.R. 2679, The PBM Accountability Act and H.R. 1613, the Drug Price Transparency in Medicaid Act of 2023).
• Allow the FDA to provide feedback on proposed drug formulations to generic drug applicants to help speed lower cost generic medicines to market. (H.R. 7032, Increasing Transparency in Generic Drug Applications Act).
• Provide access to high-cost drugs, such as gene therapies, by permitting state Medicaid programs to voluntarily enter into value-based purchasing (VBP) arrangements with drug manufacturers. VBP arrangements would base the price of a treatment or cure on the patient’s outcome, instead of the quantity of medicine consumed. These payment arrangements better align health system incentives and could lead to greater innovation for rare diseases. (H.R. 2666, the Medicaid VBPs for Patients (MVP) Act).

In summarizing the subcommittee action, Chair Brett Guthrie (R-KY) noted that the package of 17 bills would make our healthcare system more transparent for patients and drive more competition and choice. Next stop – the full Energy and Commerce Committee.

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