Lower drug costs: The PBM role

The public debate around the cost of prescription drugs has unfairly turned on the one player in the system reducing drug costs – pharmacy benefit managers or PBMs.

The California Legislature is considering new, misguided legislation affecting the PBM industry. A simple understanding of the industry shows that more regulation is a bad idea that will increase drug costs.

A PBM is a health care company that contracts with insurers, employers, government programs and others to administer the prescription drug part of a health care benefit. If you have a prescription drug card, chances are that you are working with a PBM to get your prescriptions filled.

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