Coloradans should pay no more than is absolutely necessary for their medicines.
IT'S TIME TO MAKE THE PBM SYSTEM WORK FOR TAXPAYERS AND CONSUMERS
IT'S TIME FOR THE PBM ACCOUNTABILITY PROJECT OF COLORADO.
ABOUT US
The PBM Accountability Project of Colorado is working to help ensure that Coloradans aren’t paying more than they should for their prescription medicines. We want to improve understanding of the drug pricing process, highlight the role Pharmacy Benefit Managers — or “PBMs” — play in driving up patient out-of-pocket costs, and find solutions to return prescription drug savings to Coloradans.
PBMs are meant to give patients and purchasers leverage when they negotiate prescription medicine prices. In reality, however, PBMs are profiting while Colorado patients, taxpayers, working families, and employers’ struggle to afford the medicines they need.
Fortunately, Colorado leaders recently passed bipartisan legislation to create a more dynamic, competitive PBM marketplace for the state. Colorado’s “PBM reverse auction saved state taxpayers and patients tens of millions of dollars in prescription drug costs – but there is still more work to do. Our mission is to ensure that Coloradans can afford their prescription medicines and to hold PBMs accountable to the promises they’ve made.
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WHY COLORADANS ARE PAYING TOO MUCH FOR PRESCRIPTIONS
Prescription Drug Pricing: Across the country and right here in Colorado, people are concerned about prescription drug costs. The true costs of prescription medicines for patients and purchasers are, for the most part, a mystery. The drug pricing process is murky and confusing – though many Coloradans may not know it, PBMs are a major player in this process.
The Role of PBMs: Pharmacy benefit managers (PBMs) are companies that manage the prescription drug benefit for public and private health insurers.
PBMs & Manufacturers: PBMs act as middlemen between prescription drug manufacturers and patients’ health plans, negotiating savings on prescription medicines. However,
PBMs fail to pass a very large portion of those savings to the patients, employee health plans,
and the public insurance programs that pay the final price.
PBMs & Insurance Companies:
PBMs set reimbursement rates and determine which drugs will be covered by insurance plans by creating lists called “formularies.”
PBMs & Pharmacies:
PBMs also set reimbursement rates paid to pharmacies for filling prescriptions. Too often, PBMs profit by reimbursing pharmacies at lower rates than pharmacies costs to acquire drug programs.
PBMs & Patients:
PBMs often set patient
out-of-pocket costs based on the initial list price of a medicine rather than the discounted cost negotiated with the pharmaceutical manufacturer. In some cases, the copay for a prescription is more than the full retail price for the same medication.
Because of this flawed process, Coloradans are paying more despite the fact that the PBM system was originally meant to lower the prices of medicines and ensure patient access to needed medications through their insurance plans.
Instead, a large portion of the negotiated savings never get to the patient; they go back to the PBM.
The PBM Accountability Project of Colorado is working to fix this broken system.
PBM POLICY SOLUTION
One of the most promising and successful solutions to date is the “PBM Reverse Auction,” which transforms the opaque and uncompetitive state process for selecting PBM drug price proposals into a transparent, dynamically competitive marketplace. This process requires PBMs to compete with one another online to offer the State of Colorado the formulary of prescription medicines Colorado wants to buy at the lowest price.
In 2021, House Bill 1237 was signed into law, creating a competitive reverse auction for the state of Colorado that compelled PBMs to lower drug prices in a competitive bidding process in order to win a state contract for administering the state employees’ prescription drug plan.
In April 2023, The Colorado Department of Personnel and Administration (DPA) successfully selected a new PBM for the state by using the dynamically, competitive reverse auction bidding process. Under its new PBM contract, the state is set to save tens of millions of taxpayer dollars without reducing drug benefits for public sector employees and retirees.
See how this solution is working for the
following states:
HOLDING PBMs ACCOUNTABLE FOR REDUCING COSTS
The PBM Accountability Project continues to educate policymakers at all levels of government about additional legislative and regulatory solutions to help hold PBMs accountable and deliver prescription drug savings to patients.
In order to maximize prescription drug savings and ensure affordability for Colorado taxpayers, patients, working families, employer health plans, and communities throughout our state, the PBM Accountability Project of Colorado is committed to the advancement of the following goals and principles:
1
Build on effective Colorado policies that are already supporting healthcare consumers in our state.
2
Eliminate perverse drug market incentives for PBMs to raise, rather than lower, prescription drug prices for Coloradans.
3
Eliminate PBM conflicts of interest in serving their clients.
4
Eliminate all forms of prescription drug price manipulation, arbitrage, and predatory pricing.
PBMs IN THE NEWS
