AARP Endorses Cantwell-Grassley PBM Transparency Act

August 18, 2023

This week, AARP, the leading advocacy group for more than 100 million Americans aged 50 and over, announced its endorsement for U.S. Senator Maria Cantwell (D-Wash.), Chair of the Senate Committee on Commerce, Science and Transportation, and U.S. Senator Chuck Grassley’s (R-Iowa) Pharmacy Benefit Manager (PBM) Transparency Act of 2023 that would increase transparency in prescription drug pricing and hold PBMs accountable for deceptive and unfair practices that drive up costs. The bill awaits a vote before the full Senate.

“I’m pleased that the nation’s largest advocacy organization for seniors has endorsed the bipartisan legislation I authored with Senator Grassley,” said Sen. Cantwell. “The Pharmacy Benefit Manager Transparency Act will hold PBMs accountable for their deceptive and unfair business practices that drive up prescription drug costs and will reduce the deficit by $740 million over the next 10 years. As the AARP rightly said, our bill targets practices like ‘spread pricing’ and ‘clawbacks’ in the prescription drug supply chain ‘that can contribute to high prices for consumers and taxpayers.’ I look forward to working with Leader Schumer and my bipartisan colleagues on advancing this legislation toward a vote on the Senate floor.” 

“To restore sanity to drug prices, we need to shine light on dim corners of the pharmaceutical industry. I’m grateful to AARP for its support of this bill to help address abusive practices and bring more transparency and accountability to PBMs. With every bit of progress, we’re a step closer to lowering the outrageous costs people are forced to pay for the prescriptions they need,” Sen. Grassley said.  

In the endorsement letter, AARP Senior Vice President of Government Affairs Bill Sweeney announced that “AARP, which advocates for the more than 100 million Americans aged 50 and over, is pleased to endorse S.127, the Pharmacy Benefit Manager (PBM) Transparency Act of 2023. We appreciate your ongoing bipartisan efforts to advance policies to address practices in the prescription drug market that can contribute to high prices for consumers and taxpayers.”

“Your legislation would prohibit “spread pricing,” where a PBM charges insurance plans more for a prescription drug than what they pay the pharmacy and keeps the difference. It would also prohibit PBMs from retroactively reducing or “clawing back” payments made to pharmacies. Further, this bill would increase transparency and accountability in the prescription drug supply chain, which will help inform other efforts to lower costs for consumers and taxpayers,” the endorsement continues.

Read AARP’s endorsement letter HERE.  

View the PBM Transparency Act bill text HERE and a summary HERE.  

Sen. Cantwell successfully passed the Act through the Senate Commerce Committee 18-9 in March and vowed to keep fighting until it becomes law. In January, Sens. Cantwell and Grassley reintroduced the legislation and the Committee heard testimony during a hearing in February from a pharmacist, oncology doctor and experts who explained how PBMs pervade nearly every aspect of the drug distribution system – from setting prices, clawing back pharmacy reimbursements and making care decisions.

According to a preliminary estimate by the Congressional Budget Office, the legislation would reduce the deficit by $740 million over the next 10 years

The bipartisan bill is also cosponsored by Sens. Jon Tester (D-Mont.), Cindy Hyde-Smith (R-Miss.), Mike Braun (R-Ind.) Jerry Moran (R-Kan.), Thom Tillis (R-N.C.), Shelley Moore Capito (R-W.Va.), John Boozman (R-Ark.), Peter Welch, (D-Vt.), Marshall Roger (R-Kan.), Martin Heinrich (D-N.M), Joni Ernst (R-Iowa) and Mike Rounds (R-S.D.).

While PBMs were initially formed to process claims and negotiate lower drug prices with drug makers, today they administer prescription drug plans for hundreds of millions of Americans and three PBMs control nearly 80 percent of the prescription drug market. They serve as middlemen, managing every aspect of the prescription drug benefits process for health insurance companies, self-insured employers, unions and government programs. They operate out of the view of regulators and consumers — setting prescription costs, deciding what drugs are covered by insurance plans and how they are dispensed – pocketing unknown sums that might otherwise be passed along as savings to consumers and undercutting local independent pharmacies. This lack of transparency makes it impossible to fully understand if and how PBMs might be manipulating the prescription drug market to increase profits and drive-up drug costs for consumers.