Pharmacy benefit managers are coming under growing scrutiny as policymakers push for reforms to address their role in rising drug prices, The Wall Street Journal reported Dec. 30.
Here are four things to know:
- A recent bipartisan budget bill aimed at reforming PBM practices, including transparency and decoupling their compensation from drug rebates was scrapped after opposition from President-elect Donald Trump allies. While the reforms are no longer a part of the legislation, the issue remains on the table.
- Despite the bill's failure, both Democrats and Republicans including President-elect Trump are increasingly critical of PBMs, signaling intent to address the business model in future legislative efforts.
- One proposed change would have required PBMs to pass 100% of the rebates they collect from drug manufacturers to employer health plans. Critics argue that PBMs prioritize high-list price drugs to maximize their rebate revenue, inflating costs for consumers, according to the news outlet.
- PBMs have shifted away from relying on rebates, which now account for just 13% of their profits compared to 46% a decade ago. They now generate more revenue through administrative fees, many of which are through international organizations.