Kaul asks Congress to act on PBM reform

Wisconsin Attorney General Josh Kaul is asking Congress to reform how pharmacy middlemen conduct their business.

Kaul joined 38 other attorneys general last week in calling for passage of legislation that would also shine a light on pharmacy benefit managers, which are third-party administrators that handle pharmacy benefits for payers.

Kaul and the attorneys general encouraged the Federal Trade Commission to act too.

“The cost that Wisconsinites pay for prescription drugs shouldn’t increase because of pharmacy benefit managers,” Kaul said in a recent statement.

According to the letter sent by the attorneys general, a small number of PBMs now have significant market power and are “reaping abundant profits at the expense” of patients, employers and government payers.

Players in the industry have no choice but to use the businesses, which often set reimbursement rates and rules that make it more difficult for independent pharmacies to survive, per the letter.

The attorneys general say they’re concerned about PBMs’ actions and are engaging them on a number of fronts, including through investigation, litigation and advocacy for reforms.

Legislation recently passed by the House intends to limit PBMs from increasing drug prices without justification and boost transparency, like requiring the organizations to provide pricing data to health plans and regulators in a standardized format.

The attorneys general said the legislation “deserves debate and inclusion in much needed reforms.”

Sean Stephenson, director of state affairs for the Pharmaceutical Care Management Association said the assertions made by the attorneys general on PBMS are “inaccurate.”

“PBMs operate in a highly competitive and regulated marketplace, including in Wisconsin, and have a proven track record of lowering prescription drug costs,” he said. “The legislation identified in the letter would undermine market-based incentives used to lower drug costs, limit employers’ flexibility to design health care benefits, and ultimately only boost Big Pharma profits.”

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