TN AG Joins Bipartisan Coalition Urging Congressional Action on Pharmacy Benefit Manager Reform
NASHVILLE – Tennessee Attorney General Jonathan Skrmetti has joined a bipartisan coalition of 39 attorneys general in urging the U.S. Senate and House of Representatives to engage in meaningful debate and reform of the current practices of pharmacy benefit managers (PBMs).
"Pharmacy benefit managers are failing Tennessee families. Current PBM practices consistently hurt patients and pharmacists,” Attorney General Skrmetti said in a statement. “Our office is proud to join this bipartisan coalition urging necessary reform in the industry.”
A PBM is a third-party company that functions as an intermediary between insurance providers and pharmaceutical manufacturers, ostensibly to reduce the cost of prescription medication for its clients. It typically negotiates discounts and rebates with drug manufacturers, contracts with pharmacies, and develops and maintain drug formularies, or lists of covered drugs.
Because a PBM ultimately decides which drugs it covers, it can bargain for rebates from drug manufacturers who want to get their products on its “formularies,” or lists of covered drugs. As a result of this leverage, PBMs essentially force drug manufacturers to raise list prices in order to provide ever-growing rebates.
The bipartisan letter urges Congress take pass several bills –– the DRUG Act (S1542/HR6283), Protecting Patients Against PBM Abuses Act (HR2880), and the Lower Costs, More Transparency Act (HR5378) –– that will reform the way PBMs conduct business and bring more transparency to their work.
The legislation is intended to limit PBMs from unjustifiably increasing drug prices and to mandate steps that increase transparency of their practices. Specifically, this step encompasses the obligation for PBMs to furnish pricing data to health plans and federal and state regulators in a standardized format. Such measures will empower health plans to negotiate more advantageous agreements with PBMs and enable regulators to hold PBMs accountable more effectively for their actions.
Tennessee joined the efforts led by Ohio, North Carolina, Pennsylvania and Arkansas alongside attorneys general of Alaska, Arizona, California, Colorado, Connecticut, Delaware, the District of Columbia, Florida, Georgia, Hawaii, Illinois, Kansas, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Nevada, New Hampshire, New Mexico, New York, Oklahoma, Oregon, Rhode Island, South Dakota, Texas, Utah, Vermont, Virgin Islands, Virgina, Wisconsin, and Wyoming.