Butterfield Seeks to Curb Prescription Cost Abuses

Dec 3, 2009
Press Release

Washington, D.C. – Congressman G. K. Butterfield has introduced bipartisan legislation aimed at curbing excessive medication costs for patients.
“As medications make their way down the supply chain to the people who depend on them we need to ensure no one is lining their pockets with unnecessary and excessive profits along the way,” Butterfield said.
With bipartisan support, Butterfield has introduced the Patient Health and Real Medication Access Cost Savings Act of 2009. Specifically, the bill seeks to reduce consumers’ dependence on pharmacy benefit management (PBM) companies for medications.
Butterfield explained that the bill seeks to reduce drug costs by preventing secret “spread pricing,” where PBMs purchase drugs and pay pharmacies at one price, and then charge the government and insurers a higher price without disclosing the difference. He said the bill also aims to prevent patient “steering,” where PBMs force patients to obtain medications through mail-only systems or pharmacies owned by the PBMs. Under the bill, pharmacies will also help government and insurers increase the use of lower-cost generic pharmaceuticals.
“The only way to ensure that consumer costs are fair and being contained is to hold PBMs to the same high standards of transparency and accountability that every other provider faces,” Butterfield said.
Butterfield said that because of growing costs, nearly 60 large employers across the country that collectively spend $4.9 billion for prescription drugs have recently dropped or forced PBMs to disclose drug acquisition costs. He also pointed to the University of Michigan, which found an annual savings of $2.5 million after dropping its PBM in favor of direct purchases.
The House Committee on Oversight and Government Reform’s Subcommittee on Federal Workforce, Postal Service, and the District of Columbia held a hearing on June 24, 2009 to assess the value PBMs are providing to the Federal Employees Health Benefits Program (FEHBP).  At that hearing, Subcommittee Chairman Stephen Lynch (D-Mass.) noted, “federal employee plans pay substantially more for drugs than other agency programs, including those run by the departments of Veterans Affairs and Defense, and Medicare, Medicaid and the Public Health Service.”
The Pharmaceutical Care Management Association (PCMA) successfully lobbied Congress to allow PBMs to manage the massive new Medicare Part D drug delivery program enacted in 2003 and implemented in 2006. Butterfield said that as a result of the industry’s expanded market power, PBMs are now using new tactics to divert patients into higher-cost services, and to divert taxpayer savings into higher PBM profits. 
“These practices represent a significant abuse of taxpayers and patients in the health care system, and PBMs must be held accountable to taxpayers,” Butterfield said. “Unfortunately the current law leaves consumers, taxpayers and Congress in the dark. This bill requires transparency and ensures that lower-cost generic medications are prescribed when appropriate whenever taxpayers are paying the bill.” 
The bill is cosponsored by Reps. Walter Jones (R-N.C.), Howard Coble (R-N.C.), Rodney Alexander (R-La.), Larry Kissell (D-N.C.), Mike McIntyre (D-N.C.), Brad Miller (D-N.C.) and Cathy McMorris Rodgers (R-Wash.).