Is More Information Always Better? Mandatory Disclosure Regulations in the Prescription Drug Market
By Joanna Shepherd, Ph.D.
Emory University School of Law
Cornell Law Review Online, Vol. 99, 2013 (March 1, 2013)
Pharmacy benefit managers (PBMs) save Americans billions of dollars each year by lowering the prices of prescription drugs and the costs of prescription drug coverage. However mandatory disclosure regulations recently enacted in several states and under the Affordable Care Act threaten to disrupt the cost savings PBMs currently produce for consumers. These regulations require PBMs to disclose competitively-sensitive financial information to various participants in the prescription drug market. The regulations foster tacit collusion and reduce PBMs’ ability to negotiate discounts with pharmacies and rebates with drug manufacturers. By disrupting competition in the prescription drug market, mandatory disclosure regulations will ultimately increase the prices that consumers pay for prescription drugs.
The Fox Guarding the Henhouse: The Regulation of Pharmacy Benefit Managers by a Market Adversary
By Joanna Shepherd, Ph.D.
Emory University School of Law
Northwestern Journal of Law and Social Policy, 2013 (March 1, 2013)
Pharmacy benefit managers (PBMs) save Americans billions of dollars each year by lowering the prices that consumers pay for prescription drugs and health plans pay for drug coverage. However, new regulatory developments in some states threaten to undercut competition in the PBM industry and disrupt the cost-savings PBMs currently generate. The regulatory scheme that was adopted by Mississippi in 2011, and is currently under legislative consideration in several other states, shifts regulatory control of PBMs from the neutral Insurance Commissions to the states’ Boards of Pharmacy. The fundamental problem with this structure is that the Boards of Pharmacy are made up of pharmacists, the direct market adversaries of PBMs.
Other Reports and White Papers
- “HR 1946, the Preserving our Hometown Independent Pharmacies Act of 2011” → Testimony of Professor Joshua Wright, George Mason University School of Law before the House Judiciary Committee, 2012
News Articles
- “Mom and Pop Pharmacy Bill” → New York Times, September 22, 2011