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California Legislature

Bill to shed more light on prescription drug go-betweens is shelved for the year

An effort to shed more light on a little-scrutinized part of the prescription drug supply chain — pharmacy benefit managers — sputtered on Thursday after facing concerns from the Brown administration.

Pharmacy benefit managers, or PBMs, such as Express Scripts or CVS Caremark, act as go-betweens connecting drug makers and purchasers, such as health plans and consumers. By negotiating in bulk with manufacturers, PBMs claim they can secure steep discounts, which can be passed on to purchasers.

But drug makers and consumers alike have said there is little assurance that such savings actually reach consumers. As concerns continue to mount about high prescription prices, PBMs have increasingly been scrutinized.

Assemblyman Jim Wood (D-Healdsburg) proposed a measure that would have required pharmacy benefit managers to register with the state and disclose upon the purchaser’s request information about their dealings with manufacturers, such as drug acquisition costs and the amount they’ve received in rebates and administrative fees.

PBMs were opposed to the measure, calling it a costly mandate.

Gov. Jerry Brown's administration had a different concern. According to Wood, Brown's office wanted the disclosures mandated by the bill to be made to the state, not the purchasers.

"We have agreed to continue discussions in the next few months to reach final agreement on how best to achieve the transparency we believe is so important to purchasers so they can have a complete picture of what contributes to escalating pharmaceutical drug costs," Wood said in a statement. "Once this is resolved, we will move the bill next year.”

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