Tester Introduces Bill to Lower Drug Costs for Medicare Patients, Hold Massive PBM Corporations Accountable

Senator’s bill would enable PBMs to charge flat fees for their services by “delinking” the service fee from the list price of a drug

U.S. Senator Jon Tester introduced his bipartisan Patients Before Middlemen (PBM) Act bill to lower drug costs and prevent massive Pharmacy Benefit Managers (PBMs) from price gouging Medicare Part D patients. The Senator’s bill would prohibit PBMs from making more money on high-cost drugs than they do from lower-cost drugs to even the playing field for Medicare patients.

The bill is also sponsored by Senators Bob Menendez (D-NJ), Roger Marshall (R-KS), Marsha Blackburn (R-TN), and Ron Wyden (D-OR).

“Montanans on Medicare rely on Medicare Part D to help cover the cost of life-saving prescriptions, but too often folks still struggle to afford their medication,” said Tester. “That’s because massive PBM corporations are incentivized to jack up prices for consumers and put a squeeze on the pharmacies they rely on. That’s why I’m working with my colleagues on both sides of the aisle to get rid of bad incentives, lower drug costs and hold these massive corporations accountable for price gouging our seniors.”

Instead of incentivizing PBMs to buy and sell the most expensive drugs by linking their service fees to the list price of drugs, this bill would only allow PBMs to charge a flat fee for their services. Right now PBMs make less money from lower-cost drugs and they often get left off formularies and aren’t covered by insurance. This bill seeks to disrupt that incentive and lower drug costs by delinking PBM’s revenue streams from the list price of drugs.

Tester has led the charge to lower health care costs for Montanans and hold massive PBM companies accountable. In May, Tester introduced his bipartisan Delinking Revenue from Unfair Gouging (DRUG) Act to lower drug costs and prevent massive Pharmacy Benefit Managers (PBMs) from price gouging consumers in commercial markets. And in March, Tester successfully attached a provision to his PBM Transparency Act to close a loophole that would have allowed PBMS to charge “clawback” fees.

At a Senate Commerce Committee hearing in February, Tester slammed the detrimental impacts that Pharmacy Benefit Managers (PBMs) are having on local pharmacies in Montana and the consumers that rely on them.

Last May, Tester successfully pushed the Biden Administration to lower prescription drug costs for Montana seniors by closing a Center for Medicare and Medicaid Services (CMS) loophole that allowed PBMs to retroactively charge excessive fees. This will benefit patients by lowering out-of-pocket costs and help rural pharmacies stay in business by increasing predictability and transparency.

And last August, Tester voted to pass the Inflation Reduction Act, which cut health care costs for working families by allowing Medicare to negotiate drug prices and capping the price of prescription drugs, like insulin, for Medicare patients.