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Washington, D.C.—The National Treasury Employees Union (NTEU) strongly supports a bill introduced by Rep. Stephen Lynch (D-Mass.), which would lower the costs of prescription drugs and cut premiums for workers and retirees covered by the Federal Employees Health Benefits Program (FEHBP).

Under current law, FEHBP health plans contract directly with pharmacy benefit managers (PBMs) who operate as middlemen to negotiate prescription drug prices with drug companies and pharmacies on behalf of individual plans. While the purpose of contracting with PBMs was to control drug costs, there is little evidence this approach has been effective, said NTEU National President Colleen M. Kelley.

H.R. 2175, the FEHBP Prescription Drug Oversight & Cost Savings Act, would reform FEHBP drug-pricing and contracting requirements, provide the Office of Personnel Management (OPM) with enhanced oversight and contracting authority and require PBMs to return any rebates, incentives or discounts from drug manufacturers to FEHBP.

FEHBP cannot buy drugs off the Federal Supply Schedule, which is why the program’s prescription costs are 15 percent to 45 percent higher than those for Medicare and federal health care systems run by the Veterans Administration and the Pentagon, the NTEU leader said.

“Congressman Lynch’s bill is a step in the right direction to enacting better controls over drug spending in FEHBP, and to reducing costs for federal employees and retirees,” said President Kelley.

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