AFGE strongly supports legislation introduced by Rep. Stephen Lynch of Massachusetts that would increase federal oversight of the Federal Employees Health Benefits Program (FEHBP) and ensure enrollees don’t pay more than the average wholesale cost for prescription drugs.
FEHBP is the largest employer-sponsored health insurance program in the country, serving 8.2 million federal employees, retirees and family members. But the program isn’t allowed to negotiate prescription drug prices with drug companies. Instead, the middleman – Pharmacy Benefit Managers (PBMs) negotiate prescription drug benefits with drug makers on behalf of the federal government. As a result, FEHBP is paying 15-40% more than other federal programs, including Medicare and Medicaid, and some private-sector programs.
Rep. Lynch’s bill, H.R. 2175, would increase oversight of pricing mechanisms by requiring PBMs to return 99% of all rebates, market share incentives, and other monies received from pharmaceutical manufacturers for FEHBP business. The bill would cap prescription drug prices paid by the FEHBP at the amount of the Average Manufacture Price. It would prohibit drug switching without prior physician approval and impose new disclosure and transparency requirements on PBMs.
“If we’re seeking responsible alternatives to addressing deficit reduction and reining in health care costs, strong oversight of the FEHBP prescription drug benefit would be a commonsense starting point,” Congressman Lynch said. “H.R. 2175 will serve to maximize cost savings and enhance the program’s ability to offer high-quality and low-cost prescription drugs for federal employees by enhancing oversight provisions that allow for alternative contracting and pricing mechanisms and mandating increased transparency. My legislation will lower federal employees’ out-of-pocket spending and the program’s operational costs which benefits both enrollees and taxpayers.”
AFGE strongly supports Congressman Lynch’s legislation. As health care costs continue to climb, the government should be doing everything it can to reduce out-of-pocket costs for enrollees, and this legislation is a good step in that direction.