Insurance data: PBM reform has no material impact on premiums

A first-of-its-kind analysis found no evidence a new law requiring insurance companies and their pharmacy benefit managers (PBM) to share rebates with patients has an impact on premiums.

Policymakers across the country are working to make sure patients don’t pay more for their medicines than insurers and PBMs. 

Of course, the PBM industry and its insurance allies are doing everything they can to block this reform and others. They’re using old scare tactics and claiming that sharing savings with patients will force insurance premiums to increase.

As this analysis shows, the insurance industry’s own data debunk this all-too-common myth.

The problem. 

People often pay more for medicine than their insurance company pays. Even though PBMs negotiate significant rebates that lower what health plans pay for medicines, they don’t have to share these savings with patients at the pharmacy counter. Instead, they often use rebates to subsidize insurance coverage for healthy individuals, while forcing those who need medicines to pay high costs. 

This isn’t how insurance is supposed to work, and it’s one of many PBM abuses that lawmakers across the country are working to address. 

The solution. 

In addition to Arkansas, West Virginia and Indiana also require that rebates go directly to reducing patient costs at the pharmacy counter. Policymakers in other states and Congress are considering similar changes.

The new analysis by Milliman examined changes in premiums after Arkansas adopted a law requiring that rebates be shared with patients. The health care analytics firm reviewed annual rate filing information submitted by health plans to state regulators. What did they find? Not much. According to Milliman’s report: 

“We did not find evidence in rate filing documents that the Act had a material impact on premium rate increases for Arkansas.”

The findings reaffirm other research that has shown sharing rebates directly with patients would have minimal impact on premiums. But the savings can be huge for some patients. This is certainly welcome news for people who need lifesaving cures and treatments, and it’s welcome news for lawmakers pushing this reform forward, even in the face of myths and scare tactics.

We know PBMs will put profits before patients. They’ve said as much in the past. Lawmakers need to put patients over PBMs by passing strong reforms that hold these middlemen accountable and lower what patients pay for medicines at the pharmacy counter.

To learn more visit PhRMA.org/States.