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NCPA endorses bill to ban PBM spread pricing tactic

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ALEXANDRIA, Va. — The National Community Pharmacists Association is endorsing H.R. 5281, the Drug Price Transparency in Medicaid Act, which would ban the use of spread pricing by pharmacy benefit managers in Medicaid managed care. Currently, PBMs can overbill Medicaid managed care programs, under-reimburse pharmacies for medications dispensed, and retain the difference, which is referred to as the “spread.” The bipartisan legislation was introduced by Reps. Buddy Carter (R, Ga.) and Tony Cárdenas (D, Calif.).

“Time and time again, PBMs have been caught using tactics like spread pricing to take advantage of the system, lining their pockets while harming patients and the taxpayers they are supposed to serve,” says Karry La Violette, NCPA’s senior vice president of government affairs. “We’re grateful to Reps. Carter and Cárdenas for recognizing the problem and for their leadership in putting forward a proposal to stop this abuse. We look forward to working with them to advance this bill.”

Studies of Medicaid managed care programs in Ohio, Michigan, Kentucky, and New York as well as a state auditor’s report in Pennsylvania have indicated that PBMs are using spread pricing as a way of overcharging taxpayers for their services. The Centers for Medicare & Medicaid Services in 2019 issued guidance prohibiting Medicaid managed care programs from counting the spread towards medical costs in the medical loss ratio, after NCPA encouraged the agency to eliminate spread pricing.


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