Home Coalition of AGs wants congressional action to reform pharmacy benefit managers
Health, US & World

Coalition of AGs wants congressional action to reform pharmacy benefit managers

Rebecca Barnabi
prescription drugs
(© JJAVA – stock.adobe.com)

A bipartisan coalition of 39 attorneys general is encouraging Congress to take decisive action to reform the way pharmacy benefit managers (PBMs) conduct business and bring more transparency to their work.

A PBM is a third-party company that functions as an intermediary between insurance providers and pharmaceutical manufacturers, ostensibly to reduce the cost of prescription medication for its clients. A PBM typically negotiates discounts and rebates with drug manufacturers, contracts with pharmacies, and develops and maintains drug formularies, or lists of covered drugs. Because a PBM ultimately decides which drugs it covers, they can bargain for rebates from drug manufacturers who want to get their products on its “formularies,” or lists of covered drugs. As a result of this leverage, PBMs essentially force drug manufacturers to raise list prices in order to provide ever-growing rebates.

“In the absence of meaningful federal regulations, Virginia enacted laws to protect consumers from exploitative PBM practices — legislation I supported while serving in the General Assembly. It’s time for Congress to step up and take legislative action against PBMs’ unjustifiable increases in drug prices and establish structured systems to increase the transparency of their practices,” said Virginia Attorney General Jason Miyares.

The coalition highlights three bills as crucial pieces of legislation that offer necessary reforms:

  • The DRUG Act (S1542/HR6283)
  • Protecting Patients Against PBM Abuses Act (HR2880)
  • The Lower Costs, More Transparency Act (HR5378)

Passing such legislation would encompass the obligation for PBMs to furnish pricing data to health plans and federal and state regulators in a standardized format. Such measures will empower health plans to negotiate more advantageous agreements with PBMs and enable regulators to more effectively hold PBMs accountable for their actions.

Miyares joined attorneys general from Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, the District of Columbia, Florida, Georgia, Hawaii, Illinois, Kansas, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Nevada, New Hampshire, New Mexico, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Dakota, Tennessee, Texas, Utah, Vermont, Virgin Islands, Wisconsin and Wyoming.

Rebecca Barnabi

Rebecca Barnabi

Rebecca J. Barnabi is the national editor of Augusta Free Press. A graduate of the University of Mary Washington, she began her journalism career at The Fredericksburg Free-Lance Star. In 2013, she was awarded first place for feature writing in the Maryland, Delaware, District of Columbia Awards Program, and was honored by the Virginia School Boards Association’s 2019 Media Honor Roll Program for her coverage of Waynesboro Schools. Her background in newspapers includes writing about features, local government, education and the arts.