Pharmacy Benefit Managers (PBMs) are companies hired by health insurers to manage prescription drug programs. But, as middlemen on the prescription drug supply chain who develop formularies, PBM’s have used their position as price negotiators to keep all savings for themselves.

The three largest PBMs alone processed 80% of the prescriptions filled in the United States. Last year they made nearly half of a trillion dollars doing it – without providing any benefit to patients.  

PBMs influence prescription drug prices by:  

• Acting as intermediaries between insurers, drugmakers, and pharmacies.   

• Negotiating discounts and rebates from drugmakers in exchange for preferred placement of drugs on insurers’ formularies.   

• Setting patient copayment amounts for and determining which drugs are covered by insurers.   

The ACR supports the following legislation that would increase transparency and reform the operations of PBMs:

• The Patients Before Middlemen Act (S. 882) to “delink” PBM income from the drug prices they negotiate in Medicare Advantage Part D plan.
• The PBM Transparency Act (S. 526) to ban spread pricing and require PBMs to report spread pricing and pharmacy fee profits to the Federal Trade Commission (FTC).
• The Prescription Pricing for the People Act (S. 527) to require the FTC to complete a study on pricing and other potentially abusive behavior by PBMs then provide policy recommendations to Congress to improve competition and protect consumers.

Act now to let Congress know the that making PBMs more transparent is an important step to lower towards lowering the prices of prescription drugs! The ACR’s Legislative Action Center will allow you to contact your members of Congress with just a few clicks. Take a moment to send your letter today!