Congress should follow in footsteps of West Virginia, tackle rising drug prices

By Dr. Chris Stansbury| Center Square

West Virginia is leading the way on tackling the growing problem of rising prescription drug costs. In April, state lawmakers passed and the governor signed into law legislation that regulates the middlemen of the drug supply chain, which are a core reason behind inflated pharmaceutical prices. West Virginia is the first state to adopt the monumental policy – a move that will save patients big time at the pharmacy counter.

The best part? It won’t cost taxpayers a dime.

Pharmaceutical companies already offer discounts and rebates alongside their products as a way to encourage consumer use. But standing between drug manufacturers and patients are middlemen known as Pharmacy Benefit Managers (PBMs). PBMs were initially created to help shepherd a drug from the production line through the complex web of insurance companies, health care plans and hospital networks to the consumer market. It’s a service that warrants an honest fee. But over time, these middlemen began to increasingly game the system.

Fast forward to 2021 and PBMs are siphoning tens of billions of dollars a year from the pharmaceutical supply chain – profiting at the expense of patients. In 2018, for example, PBMs collected more than $160 billion in rebates and discounts nationwide that could have gone to consumers as financial savings. West Virginia’s new law will simply force PBMs to share some of the discounts already provided by drug companies with patients as savings at the pharmacy counter. It’s a win-win policy. more