Action: Require PBM Transparency and Accountability to Reduce Drug Prices

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Pharmacy benefit managers (PBMs) for far too long have been manipulating the drug pricing system and overcharging small businesses, local pharmacies, patients, and the government.

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As employers’ health care costs increase year after year, obscure middlemen known as pharmacy benefit managers (PBMs) line their own pockets by exploiting America’s opaque and anti-competitive prescription drug distribution system. In healthy, truly competitive markets, buyers and sellers can assess the value of a good or service and once armed with transparent pricing information, they can work to find common ground between access and affordability. However, PBMs routinely prevent these essential market functions from yielding the needed savings and efficiencies that can and should accrue to plan sponsors and patients.

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Key points:

• Today, three corporations control more than 80% of the U.S. market share, creating an oligopoly and virtually eliminating a competitive environment. 

• Worse, the industry has become vertically integrated so the PBMs have major health insurers and affiliated pharmacies within their corporate sphere. Thus, these mega-corporations, the top three of which are in the Fortune 15, have enormous power to determine drug price and availability with minimal regulatory oversight. 

• Price gouging is a reality. One recent study found that PBMs are charging Florida Medicaid nearly $5,000 per prescription for a generic multiple sclerosis drug, more than $4,600 over the manufacturer’s $350 price. 

• The result: Higher prices, abuse of taxpayer dollars and fewer choices for the sick. The lack of PBM transparency and accompanying abuse ensures that multi-billion- dollar PBM corporations always have the final word, particularly with consumers and small businesses.