States unite to crack down on hidden drug pricing as new rule gains momentum
Trenton, NJ — A coalition of attorneys general across the country is backing a federal push to force transparency from companies that help determine the cost of prescription drugs for millions of Americans.
New Jersey Attorney General Jennifer Davenport joined 44 other attorneys general in supporting a proposed U.S. Department of Labor rule that would require pharmacy benefit managers to disclose how they generate revenue and influence drug pricing.
Pharmacy benefit managers, known as PBMs, act as intermediaries between insurers, employers, and drug manufacturers. They negotiate rebates, set formularies, and help determine which medications are covered and at what cost.
Under the proposed rule, PBMs serving employer-funded health plans would be required to report financial details twice a year and allow employers to audit their practices. The effort targets concerns that employers lack visibility into pricing structures and how costs are determined.
Officials said approximately 136 million Americans receive health coverage through employer-sponsored plans, placing PBMs at the center of prescription drug pricing nationwide.
State leaders have also raised concerns about cost impacts. In New Jersey, officials said Medicaid could save about $20 million annually if PBMs were restricted from inflating prices.
The coalition is also urging federal officials to clarify that the rule would not override existing state laws regulating PBMs and to ensure coordination between federal and state agencies in enforcement efforts.
PBMs currently manage about 80% of prescription drug claims in the United States, according to officials.
The proposal remains under federal review.
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Key Points
- 45 attorneys general support federal rule targeting PBM transparency
- Rule would require revenue disclosures and allow employer audits
- PBMs manage about 80% of prescription drug claims nationwide