This legislative session, I introduced House Bill 740 to help Montana’s pharmacies stand up to pharmacy benefit managers (PBMs). Decades ago, these industry giants started filling a legitimate need in the processing and negotiating of prescription drug insurance benefits. However, they quickly grew and consolidated into some of the largest corporations in the United States, and now just a few PBMs control virtually the entire drug benefits market.
In 2023, in fact, the top three PBMs generated a collective $456.3 billion in revenue – or 20% of the national healthcare expenditure. They have accomplished this by underpaying pharmacies (often well below the pharmacies’ costs for the medications); overcharging employers and patients; and pocketing the difference. PBMs have also opened their own mail-order and specialty pharmacies and use opaque strategies to hide the fact that they often dramatically overpay their own pharmacies.
PBMs insist that they drive costs down for patients and employers and that HB 740 (or any attempt to rein in their bad behavior) will cause catastrophic increases in premiums and prescription costs, ignoring the fact that they control those premiums and costs and that their own profits constitute an enormous part of those premiums and costs.
