Warner & Kaine Urge Senate Leadership to Rein in PBMs and Lower Prescription Drug Costs for Virginians

WASHINGTON, D.C. - U.S. Senators Mark R. Warner and Tim Kaine (both D-VA) and a bipartisan group of colleagues sent a letter to Senate Majority Leader Chuck Schumer (D-NY) and Minority Leader Mitch McConnell (R-KY) urging passage of the bipartisan Pharmacy Benefit Manager Reform Act, which includes legislation Warner and Kaine led that would help lower drug costs for Virginians and Americans as a whole.

The legislation is made up of various bills passed by both the Senate Finance Committee, of which Warner is a member, and the Senate Health, Education, Labor and Pensions (HELP) Committee, of which Kaine is a member. Through his work on the Finance Committee, Warner worked to secure provisions in the Modernizing and Ensuring PBM Accountability Act and the Better Mental Health Care, Lower-Cost Drugs, and Extenders Act. Included in these bills are multiple Warner-authored bipartisan proposals, including the PBM Reporting Transparency Act, which would hold Pharmacy Benefit Managers (PBMs) accountable for providing good value to seniors and Medicare by making public information about the contracts between PBMs and Medicare prescription drug plans. It also includes the IMPROVE Part D Regulations Act, which would require the Centers for Medicare & Medicaid Services (CMS) to conduct patient-focused listening sessions about potential improvements to Medicare Part D, as well as the Ensuring Accurate Payments to Specialty Pharmacies Act, which would require HHS to survey specialty pharmacy drug acquisition costs to ensure Medicaid programs don't reimburse too much or too little for drugs. This legislation also requires CMS to make sure that PBMs aren't standing in the way of fair reimbursements for smaller pharmacies, such as long-term care pharmacies and home infusion pharmacies that serve medically complex patients.

Through his work on the HELP Committee, Kaine worked to secure provisions in the legislation to prohibit gag clauses in PBM contracts to ensure that patients have access pricing tools to compare costs before paying for a prescription. PBMs are the middlemen between drug manufacturers, pharmacies, and insurance companies. Since their profits are linked to the list price of drugs, PBMs have an incentive to buy and sell the most expensive drugs.

"The need to act is more severe now than ever before. In 2023 there were over 300 independent pharmacy net closures-almost one per day. Unfortunately, that trend has only grown in 2024. Pharmacies across the country have been forced to close their doors because PBMs have continued to reimburse them significantly less than it costs the pharmacy to even purchase the drug. This is unsustainable, especially for small family businesses. The impacts of these closures only hurt already-struggling communities by decreasing the number of quality health care providers and likely increasing costs for seniors," the senators wrote in the letter.

Warner and Kaine have long advocated for legislative action to lower prescription drug costs, including being key votes to pass the Inflation Reduction Act-legislation that allows Medicare to negotiate drug prices for seniors and people with disabilities, establishes a $2,000 cap on out-of-pocket costs for prescription drugs for seniors covered under Medicare Part D, and caps insulin at $35 per month. Last year, Kaine introduced the bipartisan Delinking Revenue from Unfair Gouging (DRUG) Act to lower drug costs and prevent massive PBMs from price-gouging consumers. On the same day, Kaine introduced the bipartisan Help Ensure Lower Patient (HELP) Copays Act, which would protect patients from harmful insurance and PBM practices that raise out-of-pocket drug costs. Kaine has also introduced the Medicare-X Choice Act, which would improve health care coverage and lower costs for Americans.

The letter was cosigned by U.S. Senators James Lankford (R-OK), John Boozman (R-AR), Jim Risch (R-ID), Elizabeth Warren (D-MA), Thom Tillis (R-NC), Reverend Raphael Warnock (D-GA), Roger Marshall (R-KS), Angus King (I-ME), John Cornyn (R-TX), Jon Tester (D-MT), Chuck Grassley (R-IA), Catherine Cortez Masto (D-NV), Mike Braun (R-IN), Peter Welch (D-VT), Susan Collins (R-ME), Maria Cantwell (D-WA), Kevin Cramer (R-ND), Gary Peters (D-MI), Markwayne Mullin (R-OK), Tommy Tuberville (R-AL), Mike Rounds (R-SD), Tammy Baldwin (D-WI), Chris Coons (D-DE), Jerry Moran (R-KS), Joe Manchin (I-WV), Jeanne Shaheen (D-NH), Shelley Moore Capito (R-WV), Patty Murray (D-WA), Joni Ernst (R-IA), Maggie Hassan (D-NH), Deb Fischer (R-NE), and Martin Heinrich (D-NM).

Full text of the letter is available here and below:

Dear Majority Leader Schumer and Minority Leader McConnell,

We write to encourage you to include critically-needed Pharmacy Benefit Manager (PBM) reforms in any legislative vehicle that may be brought up for a vote at the end of the 118th Congress.

A number of committees in both the Senate and the House have passed meaningful legislation that would rein in certain PBM practices that harm patients and local pharmacies. In the Senate, the Senate Finance Committee nearly unanimously passed the Modernizing and Ensuring PBM Accountability Act and the Better Mental Health Care, Lower-Cost Drugs, and Extenders Act, the Health, Education, Labor, and Pensions (HELP) Committee passed the Pharmacy Benefit Manager Reform Act, the Commerce Committee passed the Pharmacy Benefit Manager Transparency Act, and the Judiciary Committee passed the Prescription Pricing for the People Act. These proposed policies would increase transparency, realign incentives for PBMs and patients, ensure pharmacies are adequately reimbursed, and ensure that patients benefit from decreased drug costs.

To not advance these important policies before the end of this Congress would be a waste of substantial progress made and would deny patients and pharmacists across the country the relief they deserve.

In December of last year, the Centers for Medicare & Medicaid Services (CMS) wrote to PBMs and plans: 'We are hearing an increasing number of concerns about certain practices by some plans and [PBMs] that threaten the sustainability of many pharmacies, impede access to care, and put increased burden on health care providers.' More recently, the Federal Trade Commission (FTC) released an interim report which noted that 'PBMs can often exercise significant control over which drugs are available, at what price, and which pharmacies patients can use to access their prescribed medications,' and filed a complaint alleging that 'PBMs have abused their economic power by rigging pharmaceutical supply chain competition in their favor, forcing patients to pay more for life-saving medication.'

The need to act is more severe now than ever before. In 2023 there were over 300 independent pharmacy net closures-almost one per day. Unfortunately, that trend has only grown in 2024. Pharmacies across the country have been forced to close their doors because PBMs have continued to reimburse them significantly less than it costs the pharmacy to even purchase the drug. This is unsustainable, especially for small family businesses. The impacts of these closures only hurt already-struggling communities by decreasing the number of quality health care providers and likely increasing costs for seniors.

Should any long-term policy priorities be attached to an end-of- year spending package, PBM reforms should be included in order to end the 118^th Congress with success that will help protect pharmacies and decrease costs for patients across the country.

Sincerely,

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