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35 AGs Back OK's Authority to Regulate PBMs

Analysis  |  By John Commins  
   November 01, 2022

The PBM lobby has called the states' push for oversight "both misplaced and irrelevant."

California Attorney General Rob Bonta has joined 35 attorneys general who've filed an amicus brief with a federal appeals court in support of Oklahoma's authority to regulate pharmacy benefit managers.

"Ensuring access to affordable and regulated prescription medication is essential to the health and well-being of Californians," Bonta says.

"The expanded power of PBMs in the pharmaceutical industry has had an outsized, negative impact on drug pricing and the availability of pharmacies in vulnerable communities. States have a responsibility to regulate PBMs to curb the rising cost of lifesaving prescription drugs."

The AGs brief, filed with the U.S. Court of Appeals for the 10th Circuit in Denver, notes that PBMs over the years have expanded into a multi-billion-dollar industry that does nothing to lower drug prices paid by health plans to drug makers.

The growth and consolidation of PBMs with major retail pharmacies like CVS and health plans such as Aetna, has resulted in below-market reimbursements for smaller, independent pharmacies that are often driven out of business, the AGs say.

In response, Oklahoma and other states have bolstered oversight of PBMs to protect consumers, who ultimately pay for the higher drug costs. 

A 2021 study in Health Affairs found that the closure of neighborhood pharmacies in California disproportionately occurs in communities of color. 

'Unsupported Attacks on PBMs'

The Pharmaceutical Care Management Association, the lobbying group for PBMs, has called the "unsupported attacks on PBMs…. both misplaced and irrelevant" and argued that the Oklahoma law "interferes with health plans' ability to design benefits for Oklahomans that are flexible, cost-effective, and high-quality."

"The law would increase health care costs and threaten access to prescription drugs for Oklahoma's businesses, employees, and Medicare beneficiaries," PCMA says.

"Furthermore, the core argument presented by Oklahoma and rehashed in amicus briefs filed by the independent pharmacy lobby and certain attorneys' general has been rejected in nearly every court that has considered it, including the Supreme Court."

“States have a responsibility to regulate PBMs to curb the rising cost of lifesaving prescription drugs.”

John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.

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