Us Congress Senate Bill SB1038

Us Congress 2023-2024 Regular Session

• Introduced: 3/29/23
• Refer: 3/29/23

Caption

Drug Price Transparency in Medicaid Act of 2023

Impact

If enacted, the bill would significantly impact how drug pricing is managed within the Medicaid system. Specifically, it would enforce that payment structures are more transparent by requiring that the costs incurred by pharmacies for medication are directly passed through to the entities managing these pharmacies. This change is anticipated to ultimately reduce the costs of medications for Medicaid beneficiaries and enhance accountability among PBMs, which have been criticized for opaque pricing practices that often lead to inflated prices for consumers.

Summary

SB1038, titled the Drug Price Transparency in Medicaid Act of 2023, aims to enhance transparency in drug pricing under the Medicaid program. The bill seeks to amend Title XIX of the Social Security Act to establish stricter regulations governing the pricing practices of pharmacy benefit managers (PBMs) and managed care organizations. At its core, the proposed legislation mandates a pass-through pricing model, compelling entities to base their payments for drugs on ingredient costs and a defined dispensing fee, thereby aiming to eliminate any form of spread pricing where entities profit from the difference between what they charge and what they pay pharmacies.

Contention

Key points of contention surrounding SB1038 include concerns from various stakeholders about the implications of these regulations on PBMs and pharmacies’ operations. Proponents argue that the bill would mitigate abusive pricing practices and foster a fairer market for drug pricing, while opponents may raise issues regarding the administrative burdens and changes required for compliance. Additionally, some worry that stringent requirements could lead to higher administrative costs, which might be passed onto consumers, complicating the intended benefits of the legislation.