PHOENIX – Attorney General Kris Mayes has joined a bipartisan coalition of attorneys general in urging the U.S. Senate and House of Representatives to engage in meaningful debate and reform of the current practices of pharmacy benefit managers (PBMs). In a letter sent this week, the attorneys general demand Congress take decisive action to reform the way PBMs conduct business and bring more transparency to their work.
The letter emphasizes the urgent need for legislative action to address potential abuses within the PBM industry. Specifically, the coalition highlights three bills – the DRUG Act (S1542/HR6283), Protecting Patients Against PBM Abuses Act (HR2880), and the Lower Costs, More Transparency Act (HR5378) – as crucial pieces of legislation that offer necessary reforms.
“Immediate action from Congress is needed to reform the practices of PBMs,” said Attorney General Mayes. “Together, these bills will help prioritize the needs of patients over profit margins and increase transparency for consumers. I urge Congress to engage in meaningful efforts to reform this industry and protect Arizonans.”
Together, the legislation is intended to limit PBMs from unjustifiably increasing drug prices and to mandate steps that increase transparency of their practices. Specifically, this step encompasses the obligation 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 coalition of attorneys general remains committed to advocating for meaningful reforms that prioritize the needs and interests of patients over profit-driven motives within the PBM industry.
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 maintain 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,” or lists of covered drugs. As a result of this leverage, PBMs essentially force drug manufacturers to raise list prices in order to provide ever-growing rebates.
In November 2023, Attorney General Mayes sued several PBMs and pharmaceutical companies for scheming to artificially inflate the price of insulin and other diabetes drugs in violation of the Arizona Consumer Fraud Act.
Joining Attorney General Mayes on the letter were the attorneys general of Ohio, North Carolina, Pennsylvania, Arkansas, Alaska, California, Colorado, Connecticut, Delaware, the District of Columbia, Florida, Georgia, Hawaii, Illinois, Kansas, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Nevada, New Hampshire, New Mexico, New York, Oklahoma, Oregon, Rhode Island, South Dakota, Tennessee, Texas, Utah, Vermont, Virgin Islands, Virginia, Wisconsin, and Wyoming.
