Raoul Joins Bipartisan Coalition to Urge Passage of Proposals to Lower Drug Prices, Increase Pricing Transparency
Chicago – Attorney General Kwame Raoul, as part of a bipartisan coalition of 39 attorneys general, today called on Congress to take decisive action to reform the way pharmacy benefit managers (PBMs) conduct business.
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 maintains 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. As a result of this leverage, PBMs essentially force drug manufacturers to raise list prices in order to provide ever-growing rebates.
“PBMs continue to put a focus on driving up their own profits at the expense of patients,” Raoul said. “I will continue to advocate for reforms that ensure prescription pricing is transparent and reduces the financial burden on Illinoisans.”
In their letter, Raoul and the coalition highlight the urgent need for federal legislative action to address potential abuses within the PBM industry and increase transparency in the way they operate. Together, the pending proposals are intended to limit PBMs from unjustifiably increasing drug prices and to mandate steps that increase transparency of their practices, including a proposed requirement 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 more effectively hold PBMs accountable for their actions.
The attorneys general of Arkansas, North Carolina, Ohio and Pennsylvania led today’s letter, and were joined by Raoul and the attorneys general of Alaska, Arizona, California, Colorado, Connecticut, Delaware, the District of Columbia, Florida, Georgia, Hawaii, Kansas, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Nevada, New Hampshire, New Mexico, New York, Oklahoma, Oregon, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, the Virgin Islands, Virginia, Wisconsin and Wyoming.
