(Washington DC) Members of Iowa’s congressional delegation have introduced legislation they say will help lower drug costs.
U.S. Congress has largely not met this week, with most of the attention in national politics centering on President Donald Trump’s moves to close the U.S. Department of Education and militarize a part of the U.S.-Mexico border. Still, Iowa’s federal legislators introduced several measures this week, including proposals dealing with the cost of pharmaceuticals.
Rep. Mariannette Miller-Meeks reintroduced the Delinking Revenue from Unfair Gouging (DRUG) Act Tuesday, a bill focused on pharmacy benefit managers (PBMs), the third-party businesses that negotiate prescription drug prices between drug manufacturers, health insurance companies and pharmacies. The Iowa representative also introduced the measure in 2o24.
Miller-Meeks’ proposal would require PBMs to charge a flat fee for their service in negotiating prices on a certain drug instead of charging using a percentage of the drug price. The current practice of charging based on a percentage of the drug’s costs incentivizes PBMs to promote the use of higher-cost medicines, according to a news release from Miller-Meeks’ office, which “takes money away from patients.”
“Pharmacy benefit managers (PBMs) have excessive influence over the prices patients pay at the pharmacy counter,” Miller-Meeks said in a statement. “Local Iowa pharmacies are closing due to greedy PBM practices, impacting proximity and access to medications for Iowans. The DRUG Act will put downward pressure on prescription drug prices and insurance premiums by removing the incentive for PBMs to drive up the list price of medications.”
Many pharmacists have called for action to restrict certain business practices by PBMs, which they say are raising drug costs and limiting the ability to fill prescriptions. Iowa state lawmakers are also considering legislation that would place limits on some PBM actions.
Miller-Meeks has advocated for Congress to ban certain PBM practices, like “patient steering,” encouraging or requiring patients to use certain affiliated pharmacies instead of a pharmacy of their choice and “spread pricing,” where a PBM charges a higher cost for a drug than what is reimbursed to the pharmacy — practices that are also a focus of the Iowa legislation.
Charles Crain, managing vice president of policy of the advocacy group the National Association of Manufacturers, praised the legislation as a way to help manufacturing employers provide workers affordable health care coverage.
“PBMs increase health care costs by driving up prescription drug list prices, forcing patients to pay more at the pharmacy counter and making it more difficult for manufacturers to offer affordable health care benefits,” Crain said in a statement. “Manufacturers commend Rep. Miller-Meeks and her colleagues for re-introducing the DRUG Act, which will rein in PBMs operating in the commercial market by removing their perverse incentive to maximize their own profits at the expense of manufacturers and manufacturing workers.”
Grassley introduces bill targeting ‘product hopping’
In the Senate, U.S. Sen. Chuck Grassley co-introduced a bill that would attempt to stop pharmaceutical manufacturers from attempting to shut out competitors by “product hopping.”
“Product hopping” refers to practices by some pharmaceutical companies to coercively move patients using a branded drug that has an expiring patent to a new patented drug in an effort to stop patients from moving to a generic version of the original product. According to a news release from Grassley, some manufacturers use tactics like destroying the inventory of their old product, raising its price or stating it is unsafe in attempts to discourage people from using the drug.
“Under this practice, it is difficult to switch patients to the cheaper generic when the market protections for the earlier drug expire,” the news release stated. “This abuse of the patent system forces patients to continue paying high costs for a drug that is substantially similar to their old one for many years to come.”
Grassley, alongside Sens. John Cornyn, R-Texas, Richard Blumenthal, D-Connecticut and Dick Durbin, D-Illinois, introduced the “Drug Competition Enhancement Act” Monday that would make product hopping” an antitrust violation. Companies engaging in this practice could face enforcement action from the Federal Trade Commission, including being brought to court.
The Iowa Republican said the bipartisan measure would help bring down drug prices by preventing companies from engaging in anticompetitive practices.
“One of my top priorities in the Senate is reducing the cost of prescription drugs,” Grassley said. “Our bill will bring much needed transparency to drug pricing by cracking down on product hopping and giving Iowans more access to lower-cost generic drugs.”
