Understanding PBM Reform and Its Impact on Drug Prices
What Is PBM Reform?
Pharmacy Benefit Managers (PBMs) are central to the drug pricing conversation. The ongoing legislative efforts focus on making PBMs transparent in their pricing negotiations. While reforms could be a step towards lower costs, experts warn that without addressing market competition, they may fall short.
Conflicts of Interest
Many PBMs also own pharmacies, creating conflicts that hinder price competition. This dual role allows PBMs to influence drug pricing significantly, often to the detriment of independent pharmacies which struggle to compete.
The Need for Competition
- 80% of the PBM market is controlled by three major companies.
- Competition is minimal, leading to exorbitant prices for patients.
- Past data showed one in eight pharmacies closed from 2009 to 2015.
As discussions progress, focusing on transparency and market competition will be crucial for truly lowering drug prices.
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