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Saturday, January 25, 2020

West Virginia on the Right Track to Lower Drug Costs, But is it Enough?

The GOP-controlled House of Delegates in West Virginia recently unanimously passed a bill that would require pharmacy benefit managers (PBM) to share the rebates they receive from drug companies with consumers at the point of purchase. The bill now goes to the state Senate.

Pharmacy benefit managers were created to administer drug benefits for health plans including commercial, employee and retiree plans and Medicare Part D. In 2003, the PBM industry secured safe harbor status from Congress that exempted them from criminal prosecution for taking rebates from drug manufacturers.

Essentially, PBMs can collect these kickbacks and give certain medications access to the millions of insured lives they manage over another manufacturer’s products based on how much the companies pay them. The PBMs’ priority shifted from the payer (health plans) to the seller (drug manufacturers) and created a conflict of interest.

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