Comment letter supports stronger disclosure requirements for PBMs, seeks clarity that proposed rule doesn’t preempt state PBM transparency laws
CHARLESTON, W.Va. — West Virginia Attorney General JB McCuskey joined a bipartisan coalition of 44 attorneys general in submitting a comment letter supporting a proposed U.S. Department of Labor rule that would require greater transparency from pharmacy benefit managers (PBMs) that service employer-funded health plans covered under the Employee Retirement Income Security Act of 1974 (ERISA).
Created in the late 1960s to process prescription drug claims, PBMs now play a far broader and more powerful role in the health care system by managing prescription drug benefits for health insurers. This includes, among other things, negotiating rebates and reimbursements with drug manufacturers and determining which drugs are covered and at what cost.
“PBMs have too much decision-making power when it comes to West Virginians’ access to prescription medications they need—and their authority to set a price for these medications needs to be reined in immediately. We need to put people ahead of profits. PBMs need to be held accountable so that everyday Americans can afford the medicine they need. This proposed rule would be a step in the right direction,” Attorney General McCuskey said.
Approximately 136 million Americans receive health coverage through an employer — either their own job or a family member’s — and the proposed rule responds to concerns that employers often do not have information regarding how PBMs are making money or why drug costs change. The proposed rule would require PBMs to disclose twice a year how they generate revenue and would give employers the right to audit them.
Today, the top three PBMs manage approximately 80% of prescription drug claims. Due to the power imbalance held by PBMs and the negative effects of such power on drug pricing, all fifty states, the District of Columbia, and Puerto Rico have enacted laws to rein them in.
PBMs have also long sought to avoid state regulation by claiming federal preemption under ERISA. The attorneys general urge the Labor Department to clarify that the proposed rule does not preempt state PBM transparency laws.
Attorney General McCuskey joins the attorneys general of Alaska, American Samoa, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, the District of Columbia, Georgia, Hawaii, Idaho, Illinois, Indiana, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Vermont, Virginia, Washington, and Wyoming in submitting today’s comment letter.
Read the comment letter here.
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