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Lawmakers seek more pricing info from PBMs

Legislation is pending in 14 states that would require more pricing disclosures from pharmacy benefit managers, such as Express Scripts.

Pharmacy benefit managers, or PBMs, negotiate deals with drugmakers that set maximum amounts they will reimburse drugstores for generic drugs and what they will then charge their clients for the drugs. The difference between these two numbers is labeled as “spread pricing” and can be very profitable for PBMs, USA Today reports.

Brian Henry, Express Scripts spokesman, told USA Today that Express Scripts’ clients can decide whether or not to include spread pricing in their contracts and that the pricing mechanism earns the PBM money when its clients save money.

A recent report by consulting firm Visante found that PBMs will save Medicare, companies and consumers nearly $2 trillion on prescription drugs between 2012 and 2021. Visante was hired by the Pharmaceutical Care Management Association to complete the study.

However, consumer advocates are questioning how much value PBMs are actually adding to the process. PBMs “essentially are middlemen who also add costs to the system,” Wendell Potter, a consumer advocate and former spokesman for Cigna insurance, told USA Today.

A Department of Health and Human Services rule that went into effect last year requires PBMs to report to the government the rebates and discounts they get from drugmakers when they are processing Medicare benefits, but that information does not have to be shared with the public.

Read more at USA Today.

Tyrone Squires, MBA, CPBS

I am the proud founder and managing director of TransparentRx, a fiduciary-model PBM based in Las Vegas, Nevada. We help health plan sponsors reduce pharmacy spend, by as much as 50%, without cutting benefits or shifting costs to employees.

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