PBMs help to lower drug prices for more than 266 million Americans who obtain health insurance through PBM-administered plans. These plans are offered through employers, unions, state governments, insurers and other entities. PBMs are able to lower prices by negotiating at volume and obtaining substantial discounts on prescription drugs. The PBMs operate like wholesale stores with millions of members across the country that sell everyday goods at lower costs by utilizing bulk purchasing power.
PBMs use various methods to lower costs, including rebates, pharmacy networks, drug utilization reviews, formularies, specialty pharmacies, mail-order and audits. The savings are then passed onto patients who benefit from the lower costs. Georgia’s bill would allow for open cost disclosures of PBM private price negotiations, which would undermine this process and cause costs to increase.