Rising drug prices are choking Mississippi's insurance plan. Lawmakers aren't sure what to do. [Northeast Mississippi Daily Journal, Tupelo]
Aug. 30—JACKSON — Lawmakers explored ways to reduce taxpayer burden to the insurance plan that covers state employees, but the conversation largely turned toward scrutinizing the practices of drug middlemen.
"Over the last 10 years, the cost of pharmaceuticals to the state health insurance plan to the taxpayers has increased 60%,"
The health insurance plan, which covers about 200,000 state employees and retirees, is overseen by the
Pharmacy benefit managers, commonly called PBMs, are subcontractors often hired by health plans or employers to manage drug benefits, negotiate drug pricing with manufacturers and reimburse pharmacists.
Part of PBMs' job involves negotiating rebates and other discounts from drug makers, and in exchange they provide preferred placement to a drug makers' product.
Over the last few years, as consumers have started to pay more for prescription drugs and independent pharmacies are claiming they are losing money selling drugs, the role of PBMs have come under increased scrutiny.
Representatives of PBMs say they save taxpayer dollars by controlling the annual price to administer insurance benefits. But critics of PBMs say the process — however well intentioned the goals — have become distorted to enrich the pocketbooks of managed care organizations.
One thing is for certain — managed care corporations make large profits.
"You think the share that the state would receive would be just a little bit larger than just a
"I don't have those numbers before me from the state, so I can't," Power answered.
"Well, I would," responded Blackwell, R-Southhaven.
PBMs say that drug manufacturers have the ultimate responsibility to set drug prices, and nothing is stopping them from selling their products to wholesalers at a cheaper rate.
But
As a result of the back-and-forth dance between the manufacturers and PBMs, bipartisan federal and state leaders have started to surmise that manufacturers are incentivized to keep list prices higher to give rebates to PBMs.
The hearing also turned to the national conversation surrounding the pharmaceutical industry and who is to blame for the increasing cost of drugs at the pharmacy counter.
Sen.
The
"You negotiate on behalf of the plan with the manufacturer," Harkins said. "You also negotiate with the pharmacist. So you're on both ends. You're negotiating a price to buy the product and set the price of the product. You're also setting the price for what the pharmacies are dispensing it for."
The legislative hearing comes at a time when State Auditor
Zuber, R-
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