Reinventing the Pharmaceutical Hierarchy


For a species so smart, human beings have a pretty dismal record at not making mistakes. This has already been reinforced quite a few times throughout our history, with each testimony practically forcing us to look for a defensive cover. We will, on our part, find the stated cover once we bring dedicated regulatory bodies into the fold. Having a well-defined authority across each and every area was a game-changer, as it wasted no timing in concealing our many shortcomings. Now, the stated development was always going to conjure up a reality we could have never imagined otherwise, but at the same time, it was all pretty short-lived. Talk about why that was the case, the ultimate reason has to be technology. You see, the moment technology got its layered nature to take over the scene, it allowed every individual an unprecedented chance to exploit others for their own benefit. In case that didn’t sound bad enough, the whole runner ended up achieving a massive scale, therefore leaving the regulatory contingent expectantly overwhelmed. After a long time in the wilderness, though, it seems like our governing forces are finally ready to make a comeback. This has turned more and more evident over the recent past, and a new movement should only solidify its traces moving forward.

Thirty five US state attorneys generals have signed off an amicus brief, claiming that Oklahoma state law should trump federal law when it’s a question of who can regulate pharmacy benefit managers (PBMs), the middlemen in the prescription drug industry. The call to reinvent the power hierarchy around PMBs comes after Pharmaceutical Care Management Association (PCMA) sued Oklahoma on the basis that its regulations were actually in conflict with the wider federal laws. While the initial ruling on this lawsuit favored the state, PCMA has now filed an appeal. However, the reason why all these states are trying to shake things up concerns a much bigger problem than just one lawsuit. From their perspective, certain PMBs have linked up created a hugely uncompetitive environment, and by doing so, they have forced the states’ hand in terms of imposing some of their own restrictions on the relevant operations. The AGs fears about an anti-competitive PMB market are even validated on the back an extensive research. According to a research done by the American Medical Association, only a handful of PBMs have a large collective market share for the three PBM services most used by commercial insurers, including rebate negotiation, retail network management and claims adjudication. To further contextualize the problem, the research even informed us on how the 10 largest PBMs in US had a collective market share of 97%.

“One of the biggest drivers of the high cost of pharmaceutical drugs is the abusive practices of pharmacy benefit managers. That’s why many states like Minnesota and Oklahoma have taken common-sense first steps to regulate them. I led this broad, bipartisan coalition in support of Oklahoma, as I did before for North Dakota, because I won’t stand by and let the PBM industry undo the progress we’ve made so far when so much needs to be done to make lifesaving drugs affordable to all Americans,” said Keith Ellison, Attorney General of Minnesota, who led the amicus brief.

With the very future of pharmaceutical industry on the line, the after effect of this amicus brief id something that remains eagerly awaited.


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