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1 1 (November 20, 2023)

handle is hein.crs/govennt0001 and id is 1 raw text is: Congressional ~ Research Service Pharmacy Benefit Managers: Current Legal Framework November 20, 2023 Several bills introduced in the 118th Congress address the rising cost of prescription drugs for American consumers. Some of these proposals concern the role of pharmacy benefit managers (PBMs), which facilitate the purchase of drugs through the pharmaceutical distribution chain and administer pharmacy benefit plans on behalf of health insurers, employers, and others. This Legal Sidebar provides a brief overview of PBMs' key functions, selected federal and state laws that regulate these entities, and issues surrounding federal preemption of state laws addressing PBMs. Federal Trade Commission (FTC) oversight of PBMs is also addressed, and the Sidebar concludes with a sampling of legislative proposals that address PBM business practices at the federal level, including by placing limitations on spread pricing, increasing cost transparency, and increasing oversight by the FTC and Department of Health and Human Services (HHS). Introduction to PBMs Most health insurance plans include prescription drug benefits that help enrollees pay for the cost of drugs prescribed as part of their care. Prescription drug plans typically include formularies (which list the plan's covered drugs) and specify different levels of enrollee prescription cost-sharing for drug tiers, ranging from low-cost generics to more expensive specialty drugs. Enrollees generally fill prescriptions at network pharmacies that have contracted with health care payers to dispense the drugs for a set payment. Health care payers, which may include private health insurance plans or government health programs like Medicare Part D or Medicaid, may contract with PBMs to design and administer prescription drug benefit plans. In doing so, PBMs design drug formularies, negotiate prescription drug prices with manufacturers, and contract with network pharmacies. PBMs also operate electronic systems that process prescription drug claims, calculate enrollee out-of-pocket costs, and reimburse pharmacies for drugs dispensed to enrollees. In recent years, vertical integration of PBMs has led to many PBMs being owned by or affiliated with pharmacy chains, insurance companies, and health care providers. In 2022, the three largest PBMs (CVS Caremark, part of CVS Health, which owns Anthem; Express Scripts, which is owned by Cigna; and OptumRx, which is owned by UnitedHealthcare) processed a large majority of prescription drug claims in Congressional Research Service https://crsreports.congress.gov LSB11080 CRS Legal Sidebar Prepared for Members and Committees of Congress

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