Lansing, MI - Michigan Attorney General Dana Nessel has joined a bipartisan coalition of 39 attorneys general in urging the U.S. Senate and House of Representatives to engage in meaningful debate and reform of the current practices of pharmacy benefit managers (PBMs).
The bipartisan letter – authored by the Attorneys General of Ohio, North Carolina, Pennsylvania, and Arkansas – demands Congress take decisive action to reform the way PBMs conduct business and to bring more transparency to the work of PBMs.
“In our work to protect healthcare consumers, we must bring transparency to the way pharmacy benefit managers conduct their business in this country,” Nessel said. “These reforms seek to bring accountability to PBMs' prescription drug pricing practices and ensure state and federal regulators have access to meaningful pricing data. I stand firmly with my colleagues in asking Congress to bring robust regulation to PBMs to help protect consumers from the rising cost of prescriptive medication.”
The letter emphasizes the urgent need for legislative action to address potential abuses within the PBM industry. Specifically, the coalition highlights three bills – the DRUG Act (S1542/HR6283), the Protecting Patients Against PBM Abuses Act (HR2880), and the Lower Costs, More Transparency Act (HR5378) – as crucial pieces of legislation that offer necessary reforms.
Together, the legislation is intended to limit the ability of PBMs to unjustifiably increase drug prices and to mandate steps that increase the transparency of their practices. Specifically, this step encompasses 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.
The coalition of attorneys general remains committed to advocating for meaningful reforms that prioritize the needs and interests of patients over profit-driven motives within the PBM industry.
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. It 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, it can bargain for rebates from drug manufacturers who want to get their products on its formularies. As a result of this leverage, PBMs essentially force drug manufacturers to raise list prices in order to provide ever-growing rebates.
Also joining efforts led by Ohio, North Carolina, Pennsylvania, and Arkansas on the letter were the attorneys general of Alaska, Arizona, California, Colorado, Connecticut, Delaware, the District of Columbia, Florida, Georgia, Hawaii, Illinois, Kansas, Maine, Maryland, Massachusetts, Minnesota, Mississippi, Nevada, New Hampshire, New Mexico, New York, Oklahoma, Oregon, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virgin Islands, Virgina, Wisconsin, and Wyoming.