Sen. Mike Braun, R-Ind., unveiled a bill to ban pharmacy rebates in the private market, according to The Washington Examiner.
The Trump administration already has proposed eliminating rebates — the discounts drugmakers pay pharmacy benefit managers — in Medicare and Medicaid. The bill would expand this ban to the private market.
The proposed bill, the Drug Price Transparency Act, would ban PMBs from pocketing any profits from rebates. Instead, the discounts would be passed onto patients at the pharmacy counter.
The plan would upend a common practice where drug companies set list prices and PBMs negotiate the actual price they will pay for the drug.
Critics of the rebate system accuse PBMs of failing to pass savings on to patients while keeping a cut for themselves and health insurers.
Currently the practice of negotiating rebates is protected from the Anti-Kickback Statute that makes it illegal to pay an incentive for drugs or services. "Safe harbor" protections shelter drugmaker rebates made to PBMs from the statute.
Under Mr. Braun's proposal, the safe harbor protections would be eliminated, therefore making it illegal for PBMs to arrange the rebates.
"This bill doesn’t outlaw PBMs," Mr. Braun told The Washington Examiner. "It doesn’t even outlaw rebates. But what it does do is shed light on the process."
PBMs, who say the rebates often are passed on to health plans, have warned that insurance premiums will increase for patients if rebates are eliminated.