Built-in structures to incentivize jacking up drug prices in pharmacies, and prey on seniors, could soon be whittled down.

Sens. Maggie Hassan (D-NH) and Bob Menendez (D-N.J.) were among those who voted Wednesday to advance a bipartisan bill she personally helped develop to reduce the rocketing cost of prescription drugs and the way pharmacy managers benefit from rising drug prices. 

The Modernizing and Ensuring PBM Accountability (MEPA) Act, which passed the Finance Committee July 26 on a bipartisan basis, reduces the cost incentive for pharmacy benefit managers (PBMs) to prioritize more expensive drugs because they receive higher payouts for higher priced drugs.

Drugmakers say that the rising rebates they must pay PBMs are forcing them to jack up prescription drug prices. According to a recent analysis, drugmaker rebates to PBMs increased from $39.7 billion in 2012 to $89.5 billion in 2016, partially offsetting list prescription drug price increases. PBMs say, however, that they have been passing along a larger share of the money to insurers.

“Last year, we took on Big Pharma by giving Medicare the ability to negotiate drug prices, and we must continue to stand up to the health care industry and help people afford the medications that they need,” said Senator Hassan. “This bipartisan legislation will ensure that pharmacy benefit managers don’t push people to more expensive drugs just so that they can get a larger payout, saving seniors their hard-earned money while also saving taxpayer dollars.”

HIV drugmaker Gilead Sciences was slammed for its PBM Express Scripts because it jacked up the prices of its lifesaving hepatitis C cures Sovaldi and Harvoni. But Gilead later changed its tune and joined a chorus of drugmakers—turning on PBMs. “I have never met, in this entire experience, a PBM or a payer outside of the Medicaid segment that preferred a price of $50,000 over $75,000 and a rebate back to them,” Jim Meyers, executive VP of worldwide commercial operations for Gilead told Bloomberg in 2017. “We have a system that’s incentivized upon rebate revenue.”

What Would Change Under The Modernizing and Ensuring PBM Accountability Act

The bill would lower prescription drug costs and is estimated to save $1.7 billion in taxpayer dollars. It makes a few adjustments to common PBM practices and transparency requirements under Medicare Part D, which the Senator outlined as follows:

• PBMs often prioritize coverage of more expensive drugs because part of their compensation is calculated through the list prices of drugs. This legislation will break the link between drug prices and how much pharmacy benefit managers are paid, so there is no longer a financial incentive for these companies to push patients to buy more expensive medication.
• This legislation will ban the practice of “spread pricing” in Medicaid, in which pharmacy benefit managers negotiate a lower price with a pharmacy but charge a higher price to the health plan, pocketing the difference.
• The legislation also includes a bipartisan measure that Senator Hassan led to ensure that pharmacy benefit managers report transparently on how they price low-cost generics and biosimilar medications, allowing more visibility into whether people can easily access these generics.

Sen. Menendez (D-N.J.), a senior member of the U.S. Senate Committee on Finance, said the Modernizing and Ensuring PBM Accountability (MEPA) Act includes his own inclusion, the Patients Before Middlemen (PBM) Act, joined by Marsha Blackburn (R-TN), alongside Senate Finance Chairman Ron Wyden (D-OR), Senate Finance Ranking Member Mike Crapo (R-ID), Sen. Jon Tester (D-MN), and Sen. Roger Marshall (R-KS).

“For too long, PBMs have held a vise grip over the prescription drug supply chain—price gouging hardworking families and seniors alike. Through the current incentive structure, whereby they turn a profit as a percentage of the list price of a prescription, PBMs wield their influence to have health insurers cover more and more expensive drugs—even when cheaper options are available,” said Sen. Menendez. “My Patients Before Middlemen Act, which I’ve introduced alongside Senators Blackburn, Wyden, Crapo, Marshall, and Tester, would replace the complicated scheme of opaque rebates and administrative charges with a flat fee—one that is negotiated before entering into a contract. By delinking PBM compensation from drug prices, we help lower prescription drug costs for Medicare Part D beneficiaries and better align incentives in the market. Our bipartisan Patients Before Middlemen (“PBM”) Act would curb the biggest abuses in the PBM industry today.”

Multiple factors impact skyrocketing drug prices—and when it’s a lifesaving drug, people will pay anything. Between 2007 and 2018, the cost of some insulin products increased by over 200%, according to a study published in 2022 in The Lancet. Most famously, “Pharma Bro” Martin Shkreli jacked up the price of lifesaving antiparasitic medication Daraprim, for people with HIV, in 2015 by 4000%. He also allegedly created an elaborate scheme to deny the entry of generic drug competition from getting a piece of the pie.

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Medical cannabis patients who are visiting New Hampshire from another state or Canada can now receive the treatment from authorized dispensaries there. 

The New Hampshire Department of Health and Human Services announced that, beginning on Wednesday, June 28, the state’s “alternative treatment centers” will be permitted to “dispense therapeutic cannabis to visitors from out of state and from Canada who are allowed to possess cannabis for therapeutic purposes in their state or province.”

“Visiting patients can purchase therapeutic cannabis from a New Hampshire ATC three times per year using their valid therapeutic cannabis identification issued by another state or Canada. If the out-of-state patient has a documented qualifying medical condition that is on the list of conditions approved by New Hampshire, those visiting patients may purchase cannabis at New Hampshire ATCs at the same frequency as New Hampshire qualifying patients,” the agency said in a bulletin posted on its website. 

“Visiting patients must show their out-of-state cannabis ID card and matching photo identification. There is a 2 ounce possession limit per patient, and all patients are limited to purchasing 2 ounces of cannabis in any 10-day period. Visiting patients must abide by all applicable state laws regarding their therapeutic use of cannabis,” the bulletin continued. 

New Hampshire legalized medical cannabis in 2013, when then-Democratic Gov. Maggie Hassan signed a bill into law. At the time, New Hampshire was only the 19th state to legalize the treatment.

“Allowing doctors to provide relief to patients through the use of appropriately regulated and dispensed medical marijuana is the compassionate and right policy for the state of New Hampshire, and this legislation ensures that we approach this policy in the right way with measures to prevent abuse,” Hassan, now a U.S. Senator, said in a statement at the time.

Today, 38 states now have medical cannabis laws on the books, according to the National Conference of State Legislatures. And New Hampshire has expanded its own law, with Hassan signing a bill in 2015 that broadened the list of qualifying conditions. 

According to the New Hampshire Department of Health and Human Services, a patient “must be diagnosed with a stand-alone medical condition OR a combination of a qualifying diagnosis and a qualifying symptom” in order to receive medical cannabis treatment. 

Patients with the following stand-alone conditions are eligible, per the department: “Autism spectrum disorder (age 21 and older); Autism spectrum disorder (under age 21) (requires a consultation with a certified provider of child and/or adolescent psychiatry, developmental pediatrics, or pediatric neurology, who (1) confirms that the autism spectrum disorder has not responded to previously prescribed medication or that other treatment options produced serious side effects and (2) supports certification for the use of therapeutic cannabis); Moderate or severe post-traumatic stress disorder; Moderate to severe chronic pain; Severe pain that has not responded to previously prescribed medication or surgical measures or for which other treatment options produced serious side effects; Opioid use disorder, with associated symptoms of cravings or withdrawal (requires a provider who is actively treating the patient for opioid use disorder and who is board-certified in Addiction Medicine or Addiction Psychiatry).”

But New Hampshire remains the only state in New England that has yet to legalize recreational cannabis for adults –– although it is not for lack of trying. 

In May, the New Hampshire state Senate voted down a measure to legalize recreational pot after it had been passed by the state House of Representatives a month earlier.

The bill was rejected in the state Senate by a vote of 14-10.

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