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Washington, D.C.—The nation’s largest independent union of federal employees is strongly supportive of legislation that would rein in prescription drug costs under the Federal Employees Health Benefits Program (FEHBP), the union’s president said.

H.R. 1367, introduced by Rep. Stephen Lynch (D-Mass.), outlines needed improvements in FEHBP’s drug contracting and pricing practices.

“Rising prescription drug costs continue to be a major factor pushing health care costs higher for those under the FEHBP,” said National Treasury Employees Union (NTEU) President Colleen M. Kelley. “This bill brings down those costs and will help contain the higher health care premiums federal employees have been facing for several years,” she added.

FEHBP premiums rose an average of 3.4 percent for 2013; while that is smaller than other annual increases in recent years, it still presents a problem for a workforce under a pay freeze now into its third year, the NTEU leader said.

Among the changes included in the bill is greater oversight authority for the Office of Personnel Management (OPM), which runs the nation’s largest employer-sponsored health care plan. FEHBP has more than eight million enrollees among federal workers and retirees and their families.

The Lynch bill also would require Pharmacy Benefit Managers (PBMs), which currently contract with insurance plans to provide FEHBP prescription medications, to return 99 percent of all rebates, market share incentives and other such funds received from drug manufacturers for FEHBP business. That is not now the case; PBMs now retain most of these incentives and rebates, resulting in the discounts not being reflected in the prices paid by FEHBP enrollees.

“Through strong oversight provisions that allow for alternative prescription drug benefit contracting and pricing for the FEHBP, my legislation will serve to enhance accountability and transparency relating to the FEHBP prescription drug benefit,” said Chairman Lynch.

Rep. Lynch is ranking member of the House Oversight and Government Reform Subcommittee on the Federal Workforce. President Kelley applauded his “continuing work on this important matter.”

As the largest independent federal union, NTEU represents 150,000 employees in 31 agencies and departments.