California Bill Would Mandate Price Transparency For PBM's

April 21, 2017

A bill aimed at addressing high prescription drug prices by increasing the transparency of pharmacy benefit managers recently passed the California Assembly Committee on Business and Professions by a 12 to 1 vote.  The bill (AB-315) would provide that pharmacy benefit managers, except as specified, have a fiduciary duty to purchasers and would require a PBM to disclose to a purchaser any conflict of interest that would interfere with the discharge of that duty.  The bill also would require a PBM to periodically disclose to a purchaser the aggregate amount of drug acquisition costs, rebates received from manufacturers, and rates negotiated with pharmacies.  Currently, only 14 states license, regulate or require PBM transparency.  According to the bill's sponsor, Assembly member Jim Wood (D-Healdsburg), "We just fundamentally don't understand how the money flows, quite frankly."  The bill allows for a "look under the hood" of these companies.