SB 41: Regulation of Pharmacy Benefit Managers
Pharmacy benefit managers (PBMs), also known as prescription drug middlemen, have been largely unregulated in California until recently.
With Governor Gavin Newsom's signature on SB 41, a bill authored by Sen. Scott Wiener (D-San Francisco), this is set to change significantly.
Role of Pharmacy Benefit Managers
PBMs contract with health insurers and employers to manage prescription drug benefits for millions of Americans, handling tasks such as:
- Maintaining formularies
- Processing claims
- Negotiating with manufacturers and pharmacies
PBMs will offer to put a manufacturer’s drug on a list of covered prescriptions in exchange for an agreement to pay less than the manufacturer’s list price.
They also negotiate with pharmacies to include them in their network in exchange for accepting their prices for drugs.
Author's summary: California regulates pharmacy benefit managers with SB 41.