Philly Leader

The executive director of the Philadelphia Association of Retail Druggists (PARD) said a bill pending in the PA State Senate would create more transparency from pharmacy benefit managers (PBMs) on the drug rebates these PBMs receive from drug manufacturers.

“This issue is, what is done with these rebates?” PARD executive director Robert Frankil told Philly Leader. “Are they passed on to the payer or sponsor (the Commonwealth or the insurance company that hires the PBM), or does the PBM keep most or all of the rebate?”

“SB1000 will simply require transparency of the PBMs to show where these rebate dollars go,” he said. “Our contention is the PBM keeps all of most of these rebate dollars. If they do not, and they share or pass on the rebates, then just show us.”

A PBM is a third-party administrator of prescription drug programs for health insurers, self-insured employers, and government agencies. PBMs negotiate with drug manufacturers to secure discounts and rebates on medications, manage pharmacy networks, and process prescription drug claims. PBMs also provide services such as medication therapy management and mail-order pharmacy services.

“There are around 70 PBMs in the U.S.,” reported NPR in July 2023. “Through mergers, three of them — CVS Caremark, Optum Rx, and Express Scripts — have come to control 80% of the prescription drug market, and each brings in tens of billions of dollars in revenue annually.”

Sponsored by State Sen. Judy Ward (R-Hollidaysburg), SB 1000 also would require the Pennsylvania Insurance Department to create a process for hearing and resolving complaints about PBMs. It would also restrict “patient steering” by PBMs, which is the practice of directing patients to specific pharmacies or pharmacy networks based on financial incentives rather than solely on patient need or preference.

Similar legislation, HB 1993, was introduced in the Pennsylvania House earlier this month by State Reps. Jessica Benham (D-Pittsburgh) and Valarie Gaydos (R-Aleppo). 

A spokesman for the Pharmaceutical Care Management Association (PCMA), a trade group for PBMs, told 6 ABC News that SB 1000 would restrict PBMs' ability to lower prices.

Frankil said that the bill “will not prevent PBMs from working with Pharma to lower drug costs” and that PBMs “control the networks and process claims for prescriptions, and use this leverage to generate rebates that they keep.”

“All we ask for is transparency with SB1000,” he said.

Established in 1866, PARD is one of the oldest professional organizations for pharmacists in the United States. It serves as a platform for pharmacists in the Philadelphia area to collaborate, share knowledge, and advocate for the profession. The association offers various resources and educational opportunities to its members and plays a role in shaping local pharmacy policies and regulations.