With lawmakers nationwide trying to lower the cost of prescription drugs, pharmacy benefit managers or PBMs are getting caught in the cross-hairs.
According to the National Academy for State Health Policy, there are currently 114 bills looking to regulate PBM’s nationwide and Wisconsin is now joining the trend.
But what is a PBM?
“PBM or pharmacy benefit management is typically the part of somebody’s insurance that pays for the prescription drug benefit,” said John VanDeVoort, HSHS Sacred Heart Hospital Pharmacy Manager.
A PBM is also the person that helps find discounts for patient’s prescription drugs, but they don’t always pass on the savings.
“Say a drug costs $100, but the PBM has asked the manufacturer to discount it or provide a rebate of $15, the true cost of that should be $85,” Van De Voort said. “What’s happening is the PBM may keep some of the rebate or all of the rebate and not pass it on, so it looks to the patient or the pharmacy that it’s costing $100 when really there is a savings there that hasn’t been passed through to the patient.”
VanDeVoort says PBMs can also limit a person’s options when it comes to pharmacies.
“If a PBM requires a patient to go to one specific pharmacy and that pharmacy’s prices are higher, the patient is unable to go to an alternative pharmacy to get a better price,” said VanDeVoort.
A proposed bill introduced by state Republicans and Democrats solves these issues and also states that pharmacists can now discuss lower cost alternatives with patients.
“It will also allow pharmacists to communicate with patients, lower cost alternatives that might be available to them so it removes the gag clause in some contracts,” VanDeVoort said.”
It would also close the loophole which has allowed PBMs to count mail order pharmacies as part of their pharmacy network.
“Currently, pharmacy management companies have the abilities to include their mail order pharmacies as part of their access network so this takes out the mail order component and it really forces PBMs to provide access to patients in their communities,” VanDeVoort said.
Overall, VanDeVoort says the new bill will help make the whole process transparent.
“It’s great,” he said. “I think it increases access and reduces out of pocket expense and it really just lets the public know when rebates and discounts are available with the pharmacy benefit manager.”
He says the bill would mostly apply to retail pharmacies outside of hospitals, because most hospitals do not use PBMs.
The bill is expected to be voted on by the State Assembly on Thursday.