AMA Calls for State-Level Legislation to Rein in PBMs

The American Medical Association (AMA), which is holding its annual meeting this week in Chicago, Illinois, has issued a call for intensified oversight of the pharmacy benefit manager (PBM) industry.

“It’s time to pull back the curtain on pharmacy benefit managers and how their practices negatively impact patients,” said Russell Kridel, MD, a member of the AMA board of trustees, in a statement announcing adoption of the policy. “How is it that PBMs and health plans profit from negotiated discounts on prescription drugs while patients pay co-pays based on high drug list prices that even the plans themselves are not paying? Because of market concentration and lack of transparency, patients and physicians are essentially powerless in the face of PBM pricing and coverage decisions,” he added.

According to the AMA, PBMs have similar roles to insurers, yet face no similar oversight, and are hampering policymakers’ efforts to reduce drug costs with their “byzantine” confidential contracts that drive increased costs for drugs without justification.

The new policy calls for active regulation of PBMs by state departments of insurance, application of rebates to drug prices at the point of sale, efforts to ensure that no patients are discriminated against in benefit design, and increased transparency in how direct and indirect remuneration fees are calculated.

AMA also calls for increased PBM transparency, including disclosure of information on topics like rebates, discounts, and utilization; pharmacy and therapeutics committee information; and formulary information, which AMA says should be made available to patients and prescribers at the point of care.

AMA says that it will develop model legislation addressing state-level regulation of PBMs for policymakers to use.

In addition to its attempt to promote policy solutions, the AMA also seeks to get patients involved; the organization’s new policy is linked with AMA’s TruthinRx campaign, a resource for patients to learn about what influences the price of drugs, how drug prices for products like insulin are increasing over time despite competition, and the role of PBMs in negotiating discounts and rebates with drug makers.