NACDS is aggressively working a situation involving PBM reform and the budget reconciliation bill that the U.S. Congress currently is considering. We are writing to share with you an urgent communication to Capitol Hill on this issue that was issued today by NACDS and a pharmacy coalition. We also are writing to urge you to engage through NACDS RxIMPACT and write to your members of Congress right away. 

As previously communicated, both the House-passed version of the bill and the legislative text advanced by the Senate Finance Committee included important Medicaid pharmacy benefit manager (PBM) reform provisions. These reforms focused on banning spread pricing and establishing a reimbursement rate floor.

However, the Senate Parliamentarian in recent days has been removing provisions from the bill in response to challenges raised by Democratic Senators. Unfortunately, among the most recent array of highly significant changes, the Medicaid PBM spread pricing and reimbursement rate floor reforms were among those struck from the legislation. Meanwhile, language mandating NADAC (National Average Drug Acquisition Cost) reporting has been retained. This mandatory reporting – without complementary PBM reforms – is opposed by NACDS.

This development stems from the Senate’s application of the “Byrd rule,” which, as a result of objections raised, limits the scope of what can be included in reconciliation bills. While there was optimism that the PBM reforms would withstand the tests of the Byrd rule, the Parliamentarian ultimately determined otherwise.

It is important to understand the broader context. Political dynamics have taken a central role. For a more detailed account of the current environment, we recommend reviewing the press release from Senate Budget Committee Democrats and a recent POLITICO article.

We have consensus among our pharmacy coalition that it is imperative to do everything to fight to get mandatory NADAC reporting removed from the bill while expressing outrage that the reform provisions were eliminated.

The full text of the letter to Capitol Hill follows:

We write as pharmacies, pharmacists, and pharmacy employees across all practice settings, relied on and trusted for care by Americans in every community. Given the unjustifiable removal from the budget reconciliation bill of crucial Medicaid pharmacy benefit manager (PBM) reforms, we must insist on the elimination of the provision mandating participation in the National Average Drug Acquisition Cost (NADAC) survey. These two provisions were always meant to be moved together as one policy.

Pharmacies already are closing at an alarming rate – approximately four closures per day. This crisis is only deepening.

• By stripping out Section 71116, the ban on Medicaid managed care spread pricing and eliminating safeguards for fair and adequate reimbursement from PBMs, Congress is poised to continue to allow PBMs to proceed with their perverse manipulation of the system while pharmacies are left to collapse under below-cost reimbursement.
• Further, if Section 71115 (the mandatory NADAC survey) is enacted separate from necessary Medicaid PBM reforms, the PBM middlemen will be handed yet another tool to drive reimbursement even further below pharmacies’ costs. This would be regulatory overreach without protection.

PBM reform remains long overdue and Americans and their pharmacies are paying an increasing cost through drug price inflation, shuttered healthcare access points, and reductions in care.

Under no circumstance can this Congress once again turn its back on Americans and their pharmacies, and at the same time worsen an already desperate situation for every community throughout the nation. To reiterate: given the removal of the Medicaid spread pricing ban and assurances for fair and adequate Medicaid managed care pharmacy reimbursement, mandatory NADAC survey participation also must be removed. At the same time, Congress must establish an immediate pathway to enact the PBM reforms that have strong and broad-based support.

Sincerely,

National Association of Chain Drug Stores

National Community Pharmacists Association

National Grocers Association

FMI – The Food Industry Association

American Pharmacists Association

American Pharmacies

Independent Pharmacy Cooperative

Pharmacists United for Truth and Transparency