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No Need To Interfere in Prescription Drug Market

Economic & Fiscal Policy, Health Care

by Marc Kilmer

MARYLAND POLICY REPORT

OCTOBER 17, 2016 pdf PDF VERSION Bookmark and Share

Introduction

With an increasing number of Americans relying on prescription drugs to maintain health and prolong life, there is more focus on the laws that regulate the prescription drug market. At the state level, Pharmacy Benefit Managers (PBMs) are receiving significant attention.

PBMs work with their clients to manage prescription drug benefits that millions of Americans use every day. Their work to increase efficiency in the marketplace has helped contain drug costs, but some pharmacists are unhappy with how PBMs operate. This has led to calls from legislators to regulate PBMs, especially the way that these organizations reimburse pharmacists for drugs.

However, legislators should be cautious before interfering in this marketplace. Imposing restrictions on reimbursement rates will have adverse consequences on overall health care spending. In addition, it could hurt the efficiency of the health care market. A better course is to resist calls for regulation and let pharmacists and PBMs develop solutions without government interference.

To read the full report, click here pdf

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