Maryland Public Policy Institute fellow says state should 'tread lightly' on drug costs

Courtesy of the CDC
Maryland policymakers should "tread lightly" when considering whether or not to regulate pharmacy benefit managers (PBMs), said Marc Kilmer, senior fellow for the Maryland Public Policy Institute (MPPI).

Such regulation, he said, could create larger problems in the future.

Kilmer explained that in health care policy, “there has long been a push to ‘bend the cost curve down.’ In simple terms, this means to reduce the increase in overall health care expenditures. PBMs are one way to do this."

PBMs help insurance companies manage companies’ prescription drug benefits by negotiating lower prices for drugs, pushing the use of generics and taking other steps to save money for clients.

"Many independent pharmacies" dislike PBMs, said Kilmer, because the PBMs " offer drug payment prices that these pharmacists consider too low. As a result, some pharmacists want states to mandate that PBMs reimburse pharmacists the full wholesale price of generic drugs.”

Kilmer does not think it is a place for lawmakers to get involved.

 “To start manipulating this system creates a lot of problems down the road on a state level," he said. "The Affordable Care Act (ACA) is supposed to make sure prescription costs stay low. By contributing to that confusion with a state mandate would make a mess."

“The wider effect of these price rules will be higher overall health care spending and less innovation in the delivery of health care services," Kilmer said. “If spending cannot be controlled through the market policies of PBMs, there will be greater pressure to control it in other ways that will almost certainly hurt health care consumers.”
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