WASHINGTON (Reuters) - Senators Maria Cantwell, chair of the Commerce Committee, and Chuck Grassley, the top Republican on the Judiciary Committee, introduced a bill on Tuesday that would give the U.S. Federal Trade Commission more power to rein in pharmacy benefit managers, which administer pharmaceutical plans, Cantwell's office said.
The high cost of medical bills of all kinds, including soaring prices for older drugs like insulin, have prompted concern from lawmakers from both parties.
"The increasing cost of prescription drugs has a devastating effect on the pocketbooks of American consumers," said Senator Cantwell in a statement. "PBMs are the middlemen in the prescription drug supply chain and it's time for Congress to give the FTC the ability to shine a brighter light on any deceptive and abusive practices."
Senator Grassley said that his constituents complained regularly about drug costs.
"It is critical for Congress to direct the Federal Trade Commission to go after these arbitrary, unfair and deceptive practices," he said in a statement.
The bill would ban unfair pricing schemes and require reports to the FTC about such things as spread pricing, when the PBM pays the pharmacy one price but charges the person's health plan a higher rate and keeps the difference.
Three PBMs control nearly 80% of the prescription drug market, according to Cantwell's office.
An aide to the senator said that they were referring to UnitedHealth Group Inc (NYSE:UNH)'s Optum unit, CVS Health Corp (NYSE:CVS)'s CVS Caremark and Cigna Corp (NYSE:CI)'s Express Scripts (NASDAQ:ESRX). PBMs maintain lists of drugs covered by health insurance plans and negotiate prices with manufacturers.
Cantwell's office cited a recent report by the Congressional Budget Office, which found that eliminating spread pricing would save Medicaid, the federal insurance program for the poor, some $900 million over 10 years.