Summary

To amend chapter 89 of title 5, United States Code, to ensure program integrity, transparency, and cost savings in the pricing and contracting of prescription drug benefits under... Read More

Status

This bill was introduced on Mar 9, 2011, in a previous session of Congress, but was not passed.

Bill Text

A BILL

To amend chapter 89 of title 5, United States Code, to ensure program integrity, transparency, and cost savings in the pricing and contracting of prescription drug benefits under the Federal Employees Health Benefits Program.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ``FEHBP Prescription Drug Integrity, Transparency, and Cost Savings Act''.

SEC. 2. IMPROVED PROGRAM INTEGRITY, TRANSPARENCY, AND COST SAVINGS FOR PRESCRIPTION DRUG BENEFITS IN THE FEDERAL EMPLOYEES HEALTH BENEFITS PROGRAM.

(a) Change in Contracting Requirements.--Section 8902 of title 5, United States Code, is amended by adding at the end the following: ``(p) A contract may not be made or a plan approved under this chapter, with respect to a carrier that is a party to a PBM carrier arrangement, unless the PBM and such carrier comply with the requirements of section 8915. The Office shall terminate such contract or discontinue such plan for failure to comply with such requirements.''. (b) Requirements for PBMs and Related Requirements for Carriers.-- Chapter 89 of title 5, United States Code, is amended by adding at the end the following: ``Sec. 8915. Requirements for PBM arrangements ``(a) Limitations on Cross-Ownership.-- ``(1) In general.--Under a PBM carrier arrangement a PBM may not be under common corporate control with-- ``(A) a prescription drug manufacturer; or ``(B) a retail pharmacy. ``(2) Profit restriction on corporately affiliated carriers and pbms.--With respect to a PBM carrier...

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Representative Stephen Lynch (D-MA) introduced H.R. 979, on March 9, 2011. The bill is intended to ensure program integrity, transparency, and cost savings in the pricing and contracting of prescription drug benefits under FEHBP. At the present time, pharmacy benefit managers (PBMs) negotiate drug prices with the pharmaceutical manufacturers who offer rebates and discounts. In a complicated process, the PBMs offer prescription drugs to the insurance carriers at what are supposed to be discounted rates. The insurance carriers contract with OPM to run their health plans as part of FEHBP, however the FEHBP program is not receiving the benefits of having the PBM middlemen negotiate for drug prices. In fact, FEHBP is paying more for prescription drugs than all other federal programs, including Medicare, Medicaid, DOD’s Tricare, and the Veterans Administration. (VA). The Lynch bill would address potential conflicts of interest in the process by prohibiting manufacturers and retail pharmacies from participating in FEHBP if they have a controlling interest in a PBM; prohibit “drug switching” unless the switch is approved by the prescriber of the medicine—and results in a net savings to the carrier, the government, and the patient; require PBMs to return 99 percent of all rebates and other manufacturer payments to the insurance carrier and reimburse pharmacies the same amount it charges the carriers; among other provisions. http://capwiz.com/nteu/issues/alert/?alertid=34887516

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