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Reforming Pharmacy Benefit Managers Through National Legislation

Reducing drug prices through increased regulation of pharmacy benefit managers (PBMs) is a priority for the U.S. Congress, according to the authors of a Perspective article. Reforms mandated in bills introduced into 6 different committees “would prevent PBMs from employing certain business practices that have contributed to higher prices for patients,” the authors write. “We believe these policies have limitations, however, and their effects would depend on how PBMs respond to their implementation. Although it’s encouraging to see bipartisan support for lowering prescription drug costs, we believe Americans shouldn’t expect the proposed federal PBM regulations to substantially reduce spending by patients or the government.”

The authors note that “lawmakers are … attempting to regulate pharmacy reimbursements provided by PBMs and fees charged by PBMs that may increase costs, particularly for generic drugs. PBMs sometimes charge insurers more than the amount they pay to pharmacies, a strategy known as ‘spread pricing.’ This practice can lead to sizable overpayments. In Ohio’s Medicaid program, for example, spread-pricing charges represented 31% of state spending on generic medications in 2017–2018, costing $208 million. Bills considered by the Senate HELP Committee and the Senate Committee on Commerce, Science, and Transportation propose prohibiting PBMs from using spread pricing in arrangements with private insurers, with some exceptions; bills considered by the Senate Finance Committee and several House committees would prohibit this practice in the Medicaid program.”

Source: New England Journal of Medicine