PUTT Applauds AZ Governor Katie Hobbs For Taking On Prescription Drug Middlemen "Price Gouging"

Pharmacists United for Truth and Transparency (PUTT) applauds Arizona Governor Katie Hobbs for her plan to bring soaring prescription drug prices under control by regulating how pharmacy benefit managers (PBMs) establish the price patients and health plan sponsors pay for prescription medication.

In her State of the State address, Governor Hobbs announced her forthcoming proposal that would end the PBM practice of overcharging for prescription medication; require justification for price increases to prevent “surprise costs”; and establish a new Prescription Drug Affordability Division to cap prices on commonly used medications like insulin. Governor Hobbs said these measures would “ensure no one ever has to choose between paying for rent or paying for lifesaving medication.”

“We’re encouraged by Governor Hobbs’ plan to deal directly with PBM business practices that have been found in studies over and over to increase the price of medication to the patient and the patient’s plan payer,” said PUTT President Deborah Keaveny. “We need leaders like Governor Hobbs, who is willing to take on these Fortune 15 corporations for the sake of restoring a fair and level playing field for consumers and small businesses.”

PBMs manage patients’ prescription drug benefit, acting as the liaison between the patient, the pharmacy, and the patient’s employer or health plan sponsor. PBMs establish the price patients pay for their medication when using insurance, called a “copay” or “cost share” unless the patient is in a high-deductible health plan (HDHP). HDHP patients pay the full price of the medication until they’ve met their deductible, after which their prescription benefit kicks in to cover medication costs. Since 2019, numerous studies have uncovered instances of PBMs charging end payers significantly more for patients’ prescription medication than the patient’s pharmacy was reimbursed (a practice called “spread pricing”). Additional studies have shown the drug manufacturer rebates PBMs negotiate increase a drug’s list price year over year, causing HDHP patients to pay far more out of pocket because of rebate-inflated costs.

For more information on how PBM practices affect patient care and affordability of medication for consumers and end payers, visit PUTT’s website at TruthRx.org.

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