Viewpoint: Defending the role of PBMs

Pharmacy benefit managers help bring medication costs down and improve care outcomes, but they are being scapegoated for the nation's high drug prices, an op-ed published July 11 in the The Wall Street Journal argues.

The opinion piece was written by Joe Grogan and Casey Mulligan, PhD, who are both consultants to the PBM industry. Mr. Grogan is a visiting senior fellow at the USC Schaeffer Center in Los Angeles and served in the Trump administration as a domestic policy adviser. Dr. Mulligan is an economics professor at the University of Chicago and a fellow with the Committee to Unleash Prosperity, a conservative nonprofit based in Potomac, Md. He was chief economist for the White House Council of Economic Advisers under the Trump administration.

The authors wrote that savings generated by PBMs on behalf of health plan sponsors are leading to lower premiums and better medication utilization, therefore saving members and payers money on avoided medical costs. 

PBMs also spur innovation in drug development, according to the authors. When PBMs negotiate with drug manufacturers, they generate savings for medications that are no longer patented or are nearing that time. Because most patients take "older" drugs and PBMs improve adherence to newer drugs, there is an incentive to innovate early in a drug's life cycle.

Finally, the authors say PBMs contribute $50 billion to the economy every year because the savings they create prevent drug spending that can block public healthcare programs.

Despite the purported benefits of PBMs, the authors write that the current regulatory environment around the industry could end up destroying it and increase patient costs.

In May, bipartisan legislation was introduced in Congress to create more regulations around the drug middlemen, and the Federal Trade Commission launched an inquiry into the six largest PBMs and their practices. In 2021, 18 state legislatures passed or had legislation become effective that involves PBM licensing or registration requirements. 

Instead of new regulations, the authors suggest allowing the market and "patient-driven care" to keep drug costs down, ensure access to care and incentivize drug utilization. They also recommended increasing patient use of drug-cost calculators. 

In addition, the authors argue that companies like GoodRx already give patients access to alternatively priced medications, and those like Mark Cuban's Cost Plus Drug Co. are working to drive down costs overall.


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