[Congressional Record (Bound Edition), Volume 156 (2010), Part 1]
[Extensions of Remarks]
[Pages 537-538]
[From the U.S. Government Publishing Office, www.gpo.gov]




 THE FEHBP PRESCRIPTION DRUG INTEGRITY, TRANSPARENCY, AND COST SAVINGS 
                                  ACT

                                  _____
                                 

                         HON. STEPHEN F. LYNCH

                            of massachusetts

                    in the house of representatives

                       Thursday, January 21, 2010

  Mr. LYNCH. Madam Speaker, I don't have to remind you that much of the 
public policy debate in this country has largely focused on healthcare 
reform and on how best to tackle rising costs, while ensuring access 
and quality at the same time. These calls for change in the healthcare 
policy arena have also been coupled with demands for a more fiscally 
responsible federal government.
  Many policymakers look to the FEHBP as a model for providing health 
care. That's why it's important to ensure the program is providing the 
best benefits and at the best price for subscribers. Having conducted a 
Subcommittee on Federal Workforce, Postal Service and the District of 
Columbia hearing in June, a September policy forum with key 
stakeholders, and months of additional research and collaboration, I 
have discovered that when it comes to prescription drugs, our federal 
employees and retirees are not receiving the best benefit at the best 
price. Considering that prescription drug costs comprise nearly 30% of 
the FEHBP's premiums, it is imperative that we do everything in our 
power to ensure that federal employees and the taxpayer are getting the 
best value for their dollar.
  In short, the FEHBP health plans contract with Pharmacy Benefit 
Managers (PBMs) to price and to provide the pharmacy benefit to FEHBP 
members. In contrast with other federal health programs, the FEHBP does 
not regulate or negotiate drug pricing for its members. Instead it 
relies on competition among the various carriers and PBMs to keep 
prices low. However, as we recently affirmed, prices are not low! In 
fact, when comparing FEHBP drug prices to those of other federal 
programs, such as the Veterans Administration, the Department of 
Defense, Medicare, Medicaid and the Public Health Service's 340B 
Program, the FEHBP is paying substantially more for its drugs. Even 
more alarming is that some research actually shows that Costco and 
drugstore.com offer their employees better prices for drugs than the 
FEHBP does for federal workers and retirees. In these economically 
challenging times, it is unacceptable to ask federal employees and the 
American taxpayer to put up with such an irregularity. If the

[[Page 538]]

FEHBP wants to remain a model for providing health benefits, 
legislative changes that allow for alternative prescription drug 
benefit contracting and pricing are in order.
  For this reason, I am proud to be introducing legislation today that 
will afford the Office of Personnel Management (OPM) greater oversight 
authority in the contracting and pricing of the FEHBP prescription drug 
benefit. Titled ``The FEHBP Prescription Drug Integrity, Transparency, 
and Cost Savings Act'', this bill will prohibit certain ownership 
relationships; require Pharmacy Benefit Managers (PBMs) to return 99% 
of all monies received from manufacturers for FEHBP business; cap 
prices paid by the health plan to the Average Manufacture Price (AMP); 
restrict drug switching by PBMs; and require enhanced transparency and 
disclosure of all contract terms and related information. These 
requirements intend to not only lower costs of prescription drugs in 
the FEHBP but to also provide our federal employees with a safer, 
higher quality prescription drug benefit.
  In this day and age, when every effort is being made to reduce 
federal spending and to find money to fund healthcare reform and other 
domestic policy priorities, the level of ambiguity around costs and 
drug prices under the FEHBP is appalling and must change. What we have 
before us is an issue that can save the taxpayer billions of dollars 
while at the same time reduce premiums for federal workers and their 
families. All I ask of my colleagues is for their support in passing 
this important legislation.

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