Today, Assemblyman Ed Ra (R-Franklin Square) urged the governor to sign bipartisan legislation which would require pharmaceutical benefit management companies (PBMs) to register with the New York State Department of Financial Services and comply with new state standards to protect consumers.

PBMs are companies that manage prescription drug benefits for health coverage plans. They claim that their effective negotiations with drug manufacturers create savings for health plans that they can pass on to beneficiaries.

However, their dealings are largely unregulated and secretive. Many PBMs are thought to pocket rebate funds that should be passed onto consumers. In some cases, pharmaceutical companies are paying PBMs to push more expensive drugs over less costly, generic options.

“We regulate drug manufacturers. We regulate insurance companies. It doesn’t make sense that we wouldn’t regulate the middleman. What we need is transparency. If PBMs are saving New Yorkers money, this legislation gives them every opportunity to prove it,” said Ra.

Ra noted that PBMs are said to charge pharmacies exorbitantly more money than they paid the manufacturer for certain drugs. Currently, we have no way of knowing how much.

“It’s disastrous, particularly for smaller, family-owned pharmacies,” said Ra.

Ra said reining in prescription drug costs must be a critical part of any serious healthcare reform effort.

“By signing this bill the governor can help New Yorkers afford prescription drugs by bringing much needed transparency to this industry and ensuring patients come first,” said Ra.