"Pharmacy benefit managers (PBMs) are opaque intermediaries-and they are unpopular with figures including Mark Cuban, who told Fortune that the way they bargain over drug prices is absurd, something that would never happen at the very same pharmacies buying a package of Pringles potato-chip products."
"If passed into law, this act would transform PBMs from hard-bargaining negotiators into micromanaged administrators and weaken the tools they use to discipline drug prices. Targeting PBMs is easier than confronting the suppliers who ultimately set prices."
"The first mechanism that PBMs use is formulary leverage. Drug manufacturers that want preferred formulary placement-or to avoid exclusion from coverage-must offer better prices. That leverage for PBMs depends on a credible threat: lower your price or lose access to patients."
Congress promised to reduce prescription drug prices but the 2026 Consolidated Appropriations Act restructures the drug market in ways that undermine this goal. Pharmacy benefit managers (PBMs) serve as intermediaries that negotiate drug prices through two key mechanisms: formulary leverage and rebate negotiations. The proposed legislation transforms PBMs from aggressive negotiators into micromanaged administrators by delinking their compensation from manufacturer rebates in Medicare and requiring flat administrative fees. While targeting PBMs appears politically easier than confronting drug manufacturers, weakening intermediaries typically strengthens suppliers in negotiated markets. Political incentives favor attacking unpopular PBMs rather than addressing the manufacturers who ultimately set prices.
#prescription-drug-pricing #pharmacy-benefit-managers #healthcare-policy #drug-market-regulation #political-incentives
Read at Fortune
Unable to calculate read time
Collection
[
|
...
]