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Coalition of AGs wants congressional action to reform pharmacy benefit managers


A bipartisan coalition of 39 attorneys general is encouraging Congress to take decisive action to reform the way pharmacy benefit managers (PBMs) conduct business and bring more transparency to their work.


A PBM is a third-party company that functions as an intermediary between insurance providers and pharmaceutical manufacturers, ostensibly to reduce the cost of prescription medication for its clients. A PBM typically negotiates discounts and rebates with drug manufacturers, contracts with pharmacies, and develops and maintains drug formularies, or lists of covered drugs. Because a PBM ultimately decides which drugs it covers, they can bargain for rebates from drug manufacturers who want to get their products on its “formularies,” or lists of covered drugs. As a result of this leverage, PBMs essentially force drug manufacturers to raise list prices in order to provide ever-growing rebates.


“In the absence of meaningful federal regulations, Virginia enacted laws to protect consumers from exploitative PBM practices — legislation I supported while serving in the General Assembly. It’s time for Congress to step up and take legislative action against PBMs’ unjustifiable increases in drug prices and establish structured systems to increase the transparency of their practices,” said Virginia Attorney General Jason Miyares.


The coalition highlights three bills as crucial pieces of legislation that offer necessary reforms:


  • The DRUG Act (S1542/HR6283)

  • Protecting Patients Against PBM Abuses Act (HR2880)

  • The Lower Costs, More Transparency Act (HR5378)


Passing such legislation would encompass the obligation for PBMs to furnish pricing data to health plans and federal and state regulators in a standardized format. Such measures will empower health plans to negotiate more advantageous agreements with PBMs and enable regulators to more effectively hold PBMs accountable for their actions.


Miyares joined attorneys general from Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, the District of Columbia, Florida, Georgia, Hawaii, Illinois, Kansas, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Nevada, New Hampshire, New Mexico, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Dakota, Tennessee, Texas, Utah, Vermont, Virgin Islands, Wisconsin and Wyoming.


Reporter: Rebecca Barnabi

3 comments

3 Comments


Time for congress to act

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What will it take to STOP THE DIR FEES ???

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Replying to

CMS can stop DIRs today Kathy. They had to approve the start. CMS has been told DIRs help keep the plans affordable.

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