Pharmacy benefit managers (PBMs) play a vital role in our prescription drug system and contribute to rising drug prices. However, they have received relatively little attention, even though they are some of the most problematic and least regulated companies in American healthcare. Kaiser Health News just released a helpful video providing a short introduction to PBMs and the controversies they have sparked.
PBMs serve as intermediaries between health plans, drug manufacturers, pharmacies, and insurers, and they establish networks for consumers to get reimbursements for drugs. Although PBMs are supposed to lower drug prices by creating networks and processing claims, they have exploited a lack of transparency and accountability to make enormous profits, and they are currently raising the costs of drugs, not lowering them.
At the state level, California is considering legislation to regulate PBMs and ensure that they are held accountable for their actions. And other states, such as Connecticut and North Dakota, have passed laws to curb PBM abuses.
At the federal level, Senator Ron Wyden is sponsoring the C-THRU Act, which would require PBMs to be more transparent regarding the rebates they receive on behalf of their clients. PBMs would also have to tell their clients the aggregate difference between what they pay pharmacies for drugs and what they charge their clients for drugs. Finally, PBMs would have to pass a minimum percentage of their rebates, discounts, and price concessions along to their clients, which would then be used to lower premiums.
More individuals and organizations are waking up and learning about how PBMs promote outrageous drug prices and advocating for better regulation and transparency. This video is a welcome introduction for those who are curious and wish to know more and get involved.