AARP Backs Bills to Boost Transparency in Prescription Drug Supply Chain

En español | AARP wrote to U.S. congressional lawmakers on Thursday in support of three bills that would increase transparency and accountability in the prescription drug supply chain and crack down on practices that could be contributing to high prices.

The bipartisan legislation targets the business practices of pharmacy benefit managers, or PBMs, who negotiate prescription drug prices with drug companies on behalf of insurers. These PBMs have come under scrutiny for potentially playing a role in rising drug prices.

One measure would ban “spread pricing,” a situation in which a PBM charges insurance plans more for a prescription drug than the plans pay the pharmacy, and then keeps the difference. It would also prohibit PBMs from retroactively reducing or “clawing back” payments made to pharmacies.

Two other bills would, among other provisions, require Medicare Part D plans to pay PBMs a flat fee instead of fees that are linked to drug prices, eliminating incentives for PBMs to cover higher-priced drugs over less costly alternatives.

“AARP believes that this will help reduce potentially misaligned incentives and help reduce costs for Medicare Part D enrollees,” wrote Bill Sweeney, AARP senior vice president for government affairs, in letters to the bills’ sponsors.

The endorsements are the latest efforts in AARP’s continuing fight to bring relief to older Americans who are struggling to pay for their medications. AARP is also supporting legislation that would increase competition in the prescription drug market and close loopholes drug companies use to block consumers’ access to more affordable generics.

These endorsements follow our work last year to pass historic legislation that is already lowering drug prices for millions of Medicare enrollees.

Read our letters endorsing the Pharmacy Benefit Manager (PBM) Transparency Act of 2023, the Patients Before Middlemen (PBM) Act and the Modernizing and Ensuring PBM Accountability Act, and learn more about how we’re fighting for lower prescription drug costs.