Stripped Down Spending Bill, Backed By Trump, Does Not Pass

The new, now-defeated bill eliminated the PBM reform measures included in a larger spending bill that the president-elect and Elon Musk torpedoed on Wednesday

The political and legislative roller coaster ride that is the federal government temporary spending bill paused tonight, but the ups and downs are far from over.

This evening the House failed to pass the 116-page bill backed today by president-elect Donald Trump as an alternative to a much larger bill that included pharmacy benefit management (PBM) reform and oversight and other healthcare provisions.

Now the chances of Congress passing, and President Biden signing, any kind of spending bill before a midnight Friday deadline have dwindled, and the prospect of a federal government shutdown starting this weekend seems increasingly likely.

Although the PBM provisions of the larger, 1,547-page bill negotiated by House Speaker Mike Johnson and House and Senate Democrats have been a minor subplot in the high political drama occasioned by the spending bill and a possible government shutdown, they have loomed large in healthcare circles as PBM business practices and the role that PBM pay in drug pricing and costs ave come under increased scrutiny from Federal Trade Commission, lawmakers and news organization. The trade group for the larger PBMs has fought back with an arguments that the PBMs are powerful counterweights to the pharmaceutical industry and its pricing power.

Rep. Frank Pallone Jr.

Rep. Frank Pallone Jr., a New Jersey Democrat, said in a speech on the House floor this evening that PBM provisions were included in the larger bill because “people are suffering. They were suffering from high drug prices because of pharmaceutical benefit plans — PBMs. So we put in a bill, on a bipartisan basis, as a way to bring prices down with PBM reform.” The PBM provisions in the larger bill were what Washington insiders call “pay fors” — provisions in legislation that save the federal government money that helps offset increased spending elsewhere,

Supporters of tighter regulation of PBM business practices, which include independent pharmacists, employer groups and patient advocacy groups, celebrated the larger bill on Tuesday and what had seemed like its probable passage.

But yesterday, the bill’s fortunes started to fizzle and then die out competely — and the PBM provisions along with them — when Elon Musk and then Trump criticized spending package on social media as having too many expensive, unrelated provisions.

On X, the social platform he owns, Musk posted a torrent of posts and reposts attacking the spending bill, known as a continuing resolution. Musk reposted a post by Sen. John Cornyn, a Texas Republican, that said “How on earth did a 3 month Continuing Resolutiongrow into this Cramnibus?”

The PBM provisions of defunct legislation would have had far-reaching effects on the industry’s business practices. They would have “delinked” PBM compensation from the price of a drug in Medicare Part D and banned so-called spread pricing — collecting more from the states for prescription than they reimburse pharmacies — in the Medicaid program. The bill also had a number of transparency and audit provisions that would have given federal regulators and health and drug plans greater access to pricing and other information.

Pharmaceutical Care Management Association (PCMA), the trade group for much of the PBM industry, attacked PBM provisions, asserting in a news release on Tuesday that they would mean major premium hikes for Part D plan and “hand Big Pharma a financial windfall of $10 billion.” The PBM and the pharmaceutical industry trade groups have been heaving brickbats at each other for years, but the stakes have gotten higher as the possibility of tighter PBM regulation increased. The Pharmaceutical Research and Manufacturers of America (PhRMA) launched an ad campaign in mid-November that attacked PBMs as middlemen that “get billions in rebates and discounts on medicines, yet they often refuse to pass these savings on to patients at the pharmacy counter.”