BIO's Policy Pulse: Congress Takes a Look Inside the PBM Black Box

A House hearing on health care costs put a sharp focus on the need for transparency to prevent pharmacy benefit managers (PBMs) from driving up the price of prescription drugs.

Experts at the House Committee on Education and the Workforce Subcommittee on Health, Employment, Labor, and Pensions hearing laid out the ways in which PBMs benefit by raising costs for patients and reducing revenue for drug makers. In response, Congress members from both parties called for legislation to stop the abuses by shining light on the practices of PBMs.

PBMs determine the formulary of drugs that insurers will cover, and demand rebates from drug makers in exchange for this coverage. While PBMs are supposed to pass on the savings from these rebates to insurers and patients, research shows they pocket those savings as profits—though it’s hard to know how much PBMs profit.

The PBMs “operate in a black box,” said Subcommittee Chair Bob Good (R-VA). “Nobody knows the details of the rebate deals they negotiate with drug manufacturers, creating perverse incentives for PBMs to choose more expensive drugs with larger rebates.”

Bio.News: https://bio.news/federal-policy/house-hearing-puts-focus-on-need-for-pbm-transparency/

June 21, 2023

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