PCMA Highlights Analysis Finding Government Mandates Will Limit Choice and Raise Costs for Employers

PCMA highlighted a new analysis by Matrix Global Advisers (MGA) concluding that placing government mandates on private market contracts between PBMs and employers would significantly harm employers, increase administrative burdens, and reduce plan flexibility. The analysis also found that many employers will see fewer savings in their prescription drug benefit, which may also mean higher costs for patients. The report analyzes legislation that would require 100% rebate pass-through in the commercial market, which would take away client choice in how plans are able to finance PBM services.

Current market data illustrates a diversity of contracting preferences by employers. While 59% of employers choose arrangements with 100% pass-through of rebates, 29% choose arrangements in which the employer receives a share of rebates, and 11% choose flat-dollar arrangements, which involve no employer risk. The authors conclude that mandating contracting terms “has little upside but risks restricting employers’ choices.”

PCMA President and CEO David Marin has urged the Senate to reject the policies backed by pharmaceutical companies in the House-passed funding bill that mandate private sector contracting terms and focus instead on the ways drug manufacturers are restricting competition to keep prices high.