Opinion: Pushing for reform in pharmacy benefit manager industry

In Idaho, we’re pushing to reform the PBM industry to serve our state through increased competition. This legislative session, we passed H 596 in the House and Senate. By the time you read this column, the governor may have signed it into law. We’re not alone in our efforts. Almost 40 states are working to find a solution to a range of PBM issues. This bill also mirrors many of the changes championed by Sen. Mike Crapo and other officials at the federal level. But we’re not waiting for Congress to act.

For example, PBMs may receive rebates from pharmaceutical manufacturers. Because they can keep some of those rebates, PBMs are incentivized to pursue a high-drug price/high-rebate strategy. H 596 requires that 100% of the rebate go to the plan sponsor. This change reduces the appeal of pursuing rebates at the expense of offering cheaper drugs with smaller or no rebates.

We also address spread pricing. PBMs can charge health plans one price for dispensing a prescription and then a lower price to the pharmacies that provide the drug. The PBM then keeps the difference. This approach comes at a high cost to insurers and pharmacies alike.

Under H 596, PBMs must improve their transparency. Currently, pharmacies must sign a contract with a PBM. But only one side knows the full details of the contract. Failing to sign means a pharmacy can’t process prescriptions for patients served by that PBM. Once H 596 becomes law, PBMs must share the full contract. Pharmacists also faced restrictions on informing patients about cheaper drug options. With H 596, pharmacists can now provide that information.

I’m not under any illusion that this legislation will solve all the issues related to high drug prices. However, it does provide the first step towards better options for Idahoans. Other services continue to enter the marketplace, too, including GoodRx for generic drugs, RxPass as a subscription service provided by Amazon Pharmacy, and Mark Cuban’s Cost Plus Drug Company.

We need to continue looking for ways to ensure patients have access to the medications they need at reasonable prices. No patient should find themselves rationing out insulin or other life-saving drugs because of affordability. Finding solutions and increasing competition represents an opportunity to help Idahoans receive the care they need in their communities.