Pharmacy Benefit Manager (PBM)
Legal Challenges Against State PBM Laws May Culminate in Supreme Court Review
Amy Y. Gu, Managing Editor November 15, 2019
As states step up their efforts to control prescription drug prices, many state legislatures have targeted pharmacy benefit managers (PBMs) and their role in rising prices by introducing legislation to bring greater transparency to the inner workings of PBMs. As a result of these efforts, however, states increasingly face challenges from the pharmaceutical industry, specifically the Pharmaceutical Care Management Association (PCMA), a trade association representing PBMs. Over the years, PCMA has brought a number of lawsuits challenging state legislation regulating PBMs, claiming that the Employee Retirement Income Security Act (ERISA) …
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The Drug Rebate Rule Would Have Fixed Misaligned Incentives and Should Not Have Been Dropped
Gary Ko July 26, 2019
Early this month, the Trump administration withdrew the proposed Drug Rebate “Safe Harbor” Rule. Under the proposed rule, rebates currently paid by pharmaceutical companies to pharmacy benefit managers (PBMs) and payers would instead be passed directly to consumers. The Congressional Budget Office (CBO) estimated that the rule would cost the federal government $177 billion over 10 years. According to news sources, the administration decided to withdraw the rule due to concerns over cost, as well as potential windfall profits to the pharmaceutical industry. This outcome is unfortunate, as the current …
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The Lower Health Care Costs Act: A Bipartisan Federal Effort to Improve Competition in Healthcare Markets
Katie Gudiksen, Senior Health Policy Researcher June 21, 2019
The Lower Health Care Costs Act, released in May 2019 by Senators Lamar Alexander and Patty Murray, addresses many inefficiencies in healthcare markets and has the potential to both increase competition and lower costs for healthcare services. The 195-page draft federal bill, also known as the Alexander-Murray Bill (S 1895), contains more than three dozen provisions designed to address health care costs. The bill is divided into five titles: 1) Ending Surprise Medical Bills, 2) Reducing the Prices of Prescription Drugs, 3) Improving Transparency in Health Care, 4) Improving Public …
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FTC Cracks Down Anticompetitive Tactics from All Sides of Prescription Drug Supply Chain
Amy Y. Gu, Managing Editor May 14, 2019
As public outcry against healthcare costs, in particular prescription drug prices, continues to dominate the national spotlight, the Federal Trade Commission (FTC) is stepping up its efforts to regulate anticompetitive conduct in various markets of the healthcare supply chain. In this month’s Litigation and Enforcement Highlights, we take a look at FTC enforcement actions that target 1) the e-prescription market, 2) reverse-payment agreements between drug manufacturers, and 3) pharmacy benefit managers. FTC Targets Monopoly in Electronic Prescription Market in Antitrust Action Against Surescripts As the country faces building pressure …
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States Are Taking the Helm on Antitrust Enforcement Efforts in Healthcare
Amy Y. Gu, Managing Editor April 15, 2019
State enforcement is the theme of the month in healthcare antitrust. A panel of antitrust experts at a recent Antitrust Symposium hosted by UC Hastings College of the Law discussed how exclusionary contracts and anticompetitive conduct by players in both the provider and pharmaceutical markets hinder competition and drive up healthcare prices. This edition of Litigation and Enforcement Highlights takes a look at current anticompetitive practices of providers and PBMs and the ensuing state regulatory efforts to address them. A Tale of Two Coasts in Provider Market Enforcement As …
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Who’s Driving Healthcare Prices: A Look at Anticompetitive Conduct of Various Players in the Healthcare Market
Source Fellow and Amy Y. Gu, Managing Editor April 9, 2019
By: Megan O’Leary, Student Fellow and Amy Y. Gu, Managing Editor On Thursday, April 4, The Source attended the “Antitrust in the New Millennium Symposium” hosted by UC Hastings College of the Law. This blog focuses on the session “New Antitrust and Healthcare”, moderated by The Source Board member and UC Hastings Professor Thomas Greaney, and featuring the panel of, notably all women, UC Hastings Professor Robin Feldman, California Senior Assistant Attorney General Kathleen Foote, and American Antitrust Institute (AAI) President Diana L. Moss. What drives rising healthcare prices? Perhaps it stems …
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Innovations in State Medicaid Programs to Control Prescription Drug Costs
Katie Gudiksen, Senior Health Policy Researcher March 7, 2019
Medicaid serves nearly one in five Americans, including many with chronic conditions, and purchases about 10% of total prescription medications dispensed in the U.S.[1] From 2013 to 2016, Medicaid’s nationwide drug spending increased almost 50%, from $22.4 billion to $33.4 billion.[2] Medicaid programs consume an increasing percentage of state budgets and threaten to overtake funding for other programs like education and infrastructure.[3] In 2018, the National Association of State Budget Officers (NASBO) estimated that Medicaid accounted for nearly 30% of total state spending and is the fastest growing component of …
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Trump Administration Issues Proposed Rule to Dramatically Change Drug Rebates
Katie Gudiksen, Senior Health Policy Researcher February 4, 2019
On Thursday, January 31, 2019, the Trump Administration announced a proposed rule to eliminate rebates from drug manufacturers to pharmacy benefit managers (PBMs) in the Medicaid managed care and Medicare Part D programs. The proposed rule accomplishes this aim by removing safe-harbor protection[1] under the federal Anti-Kickback Statute (AKS)[2] for these rebates. In addition, the administration proposed new safe-harbor protections for rebates and other price reductions that will reduce the cost-sharing for patients when they purchase prescriptions and protect some flat PBM service fees (i.e. fees that are not tied …
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Litigation and Enforcement Highlights – January 2019
Amy Y. Gu, Managing Editor January 15, 2019
Happy 2019! In this New Years issue, we recap the final litigation and enforcement moments of 2018. In antitrust litigation, we look closer at a major developing lawsuit that brings anticompetitive generic drug pricing practices into the national spotlight. Also, two federal appeals courts weighed in on antitrust litigation in the commercial health insurance and pharmaceutical industries, respectively. In enforcement action, we discuss the final mega merger of 2018 and what its approval means for the healthcare market. Massive Antitrust Lawsuit Keeps Snowballing Toward Judgment Day for Generic Drugmakers …
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Recapping the 2017-2018 California Legislative Session (Part 1): Incremental Steps Made in Targeting High Drug Costs and Achieving Single Payer
Sammy Chang, Health Policy Researcher January 8, 2019
After considering 5,617 bills and resolutions, the two year California legislative cycle has come to a conclusion. As health care costs become more scrutinized, more bills than ever have emerged to target these costs. While not all of those bills passed, a significant amount of bills that did pass as well as the notable bills that failed coalesce around four themes: targeting high costs of prescription drugs, working towards a single payer system, regulating competition, and limiting high health costs. This post will focus on the first two themes: high …
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