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PBM Transparency

Pharmacy Benefit Managers (PBMs)
Pharmacy benefit managers (PBMs) are companies hired by insurers to manage drug benefit programs. They essentially act as middlemen between insurers, manufacturers, and pharmacies and thus have a uniquely central role in the drug market, handling everything from setting patient copayment amounts to determining which drugs are covered by which health plans. However, while they claim to reduce costs, the lack of transparency in their methods makes this claim difficult to prove.

About Pharmacy Benefit Managers

Why do Insurance companies use Pharmacy Benefit Managers?

PBMs claim to help control costs for both their clients (insurance companies) and consumers (patients). However, due to the lack of transparency, there is no sufficient evidence that PBMs have helped control costs on behalf of patients. Since their creation, out-of-pocket expenses have increased and many patients continue to struggle with the high costs of prescription drugs.  While PBMs were originally created to control drug costs on the whole, they have since done the opposite.  The lack of oversight and transparency around their pricing practices has greatly contributed to the problem.

What role do PBMs play in driving up the cost of drugs?

  • While PBMs were originally set up to control drug utilization and cost, they have since become incredibly effective at negotiating discounts and rebates from manufacturers that they keep for themselves as profits rather than passing those savings onto patients. As a result, patients are paying cost shares that do not reflect the actual lower cost of the drug, which drives up out-of-pocket costs and co-pays. In some cases, PBMs may also push manufacturers to increase their drug’s list price in order to be included on formularies.

This video from RxPreferred Benefits will help explain the various ways that PBMs are able to take advantage of consumers and why legislation requiring PBM transparency is necessary.




This profile will be able to show you a current outlook for States that are currently considering or have recently passed legislation regarding Step Therapy. If you live in one of the highlighted states, get in touch with your local representatives and explain to them why these bills need their support. If you live in a state that is not highlighted, you must explain to your local representatives why they should draft this type of legislation and the positive impact it would have on people like you. We at GHLF are happy to help you prepare those comments if you need assistance.

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Data Corner
Specialty Tier Drugs

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