States Crack Down on PBMs to Lower Drug Costs
It’s no secret that prescription drug prices are too high for some people to afford. Many seniors with chronic conditions have resorted to skipping doses or cutting them in half because of these exorbitant prices.
Although attempts have been made to lower these costs at the federal level, there has been a lot of pushback. Even the Inflation Reduction Act of 2022, which President Biden signed into law, isn’t enough. Although it has helped reduce costs on some medications, the process excludes too many drugs.
States have recently begun to take matters into their own hands. They’re opting to target pharmacy benefit managers (PBMs) to try to get those costs lowered. This is a shift in the healthcare landscape and could provide some of the relief that patients need.
What Are Pharmacy Benefit Managers?
Pharmacy benefit managers are the intermediaries between insurance companies, pharmacies, and drug manufacturers. These companies negotiate drug prices and discounts with pharmaceutical companies. They aim to lower drug costs for their clients.
They’re also in charge of insurance coverage. They decide which drugs are covered by the various plans, and they set reimbursement rates for pharmacies.
Despite having been created to lower drug costs, there has been significant worry recently about conflicts of interest. That’s because many of these PBMs partner with pharmacies or outright choose to purchase them.
That means PBMs can encourage patients to choose their pharmacies instead of competitors that may be offering better rates. Additionally, the rebates they negotiate with pharmaceutical companies are not always passed down to patients.
The Push to Regulate PBMs
Arkansas is one of the first states to try to regulate PBMs. The state passed a law that will take effect in 2026 to help limit PBMs, and other states are beginning to do the same.
States such as California and Alabama are pushing for more transparency when it comes to rebates while also focusing on pharmacy reimbursements. California would require that PBMs be licensed and that all of the rebates they negotiate be passed down to patients without the PBMs keeping any of those funds.
Alabama, on the other hand, has formed the Community Pharmacy Relief Act. It requires that PBMs reimburse pharmacies using Medicaid rates.
What seems to be a common theme is that PBMs function without the necessary oversight, and they exert too much influence over pricing and pharmacy operations. They eliminate competition, which is needed to bring rates down.
In addition to state-level reform, Medicare beneficiaries will soon benefit from a $2,000 annual out-of-pocket cap on prescription drugs, starting in 2025. Learn how this new Medicare prescription cap works and how it could help lower your long-term costs.
PBMs, Rebates, and What It Means for Patients
One of the biggest concerns about pharmacy benefit managers is how they handle rebates from drug manufacturers. These rebates are supposed to help reduce the overall cost of medications, but that’s not always what happens.
Instead of passing the savings down to patients, many PBMs keep a portion of the rebate or apply it in ways that don’t actually help the people paying at the pharmacy counter. This lack of transparency is a major reason why states are pushing for more oversight.
When patients don’t see the benefit of those negotiated discounts, they often end up paying more than they should, especially for brand-name drugs. That’s why some states, like California, are proposing laws that would require PBMs to pass all rebates directly to patients instead of pocketing any of the funds.
Until these changes are widely adopted, patients will continue to face high out-of-pocket costs. That’s why programs like Simplefill’s prescription assistance service are so important; they help fill the gap while the system catches up.
What New PBM Regulations Could Mean
National large pharmacies oppose the crackdown on PBMs. These companies rely significantly on these intermediaries, and restrictions would force them to restructure how they function. There are also worries about financial losses for companies like CVS Health. PBMs are an important source of revenue for them.
Independent pharmacies, however, could benefit greatly from restricting PBMs. It’s common for them to receive lower reimbursement rates for the same medications that large pharmacies dispense. Not allowing PBMs to own pharmacies and requiring transparency would mean independent pharmacies could be competitive again.
Regulations could make a difference for doctors, too. Restrictions on PBMs could impact how medications are reimbursed. Some doctors may have an easier time prescribing medications when they don’t have to worry about intermediaries.
For patients, regulations could help lower rates. This is especially the case if independent pharmacies can start offering competitive pricing. There is worry, however, of what may happen if large pharmacies face administrative issues because of the lack of PBMs. That could cause a short-term spike in medication prices.
Simplefill and Prescription Assistance Programs
If you are struggling to afford your medications for chronic conditions like fibromyalgia, ulcerative colitis, or a number of other illnesses, you don’t have time to wait for states to implement regulations on PBMs. You need to be able to afford your medications now.
Prescription assistance programs can help you do so. These programs assist you in finding the most appropriate savings so that you don’t have to miss out on the treatments you need.
At Simplefill, we go one step further. We not only seek out the programs that can help you, but we also do all of the applying for you.
The application process for these programs is not simple, and you can easily get rejected if you don’t provide the exact information required. By doing the application for you, we make it more likely that you get approved for these benefits.
Get Affordable Access to Prescription Medications
Simplefill is a full-service prescription assistance company that researches, qualifies, and maintains patients’ enrollment in all sources of assistance available to them.
Apply today by calling 877-386-0206. A caring Simplefill representative will contact you within 24 hours to discuss your application and, if qualified, enroll you in the program.
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