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On November 8, the Senate Finance Committee considered legislation entitled the Better Mental Health Care, Lower-Cost Drugs, and Extenders Act. As the title indicates, the legislation was wide-ranging in scope, but of particular interest to CSRO, the bill included significant reforms to the pharmacy benefit manager (PBM) industry that the Committee has been working on for many months. For example, the legislation includes a limited mandatory pass-through of discounts for certain frequently used drug categories in Part D.
Although many stakeholders – and many Senators – would have liked to create an unlimited mandatory pass-through for all drugs across the program, the provision’s initial scope was narrowed to whittle down the score from the Congressional Budget Office. Creation of an entirely new provision in federal law is usually the biggest hurdle; expansion of an existing provision tends to be easier. Thus, ensuring that a pass-through is codified into federal law, even if it is narrower than the ideal, provides that “foot in the door” to build on in the future. As a reminder, the Committee had previously also advanced a provision to delink PBM income from drug prices.
In addition to the PBM reforms, it’s worth noting that the legislation included a provision related to Medicare Physician Fee Schedule reimbursement. At the end of last year, Congress enacted two years of a “hold-harmless” payment increase to help offset conversion factor reductions: for 2023, Congress provided a 2.5% bump and, for 2024, that level of relief would drop to a 1.25% bump. The Finance Committee bill advanced this month would extend the 2.5% level through 2024, rather than letting it drop down by half.
Although almost 60 amendments were filed and several were discussed by Senators during the Committee session, none were officially offered for a vote. In the end, the bill advanced out of Committee by 26-0. CSRO will continue to monitor progress and provide updates as appropriate.
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