Maryland Attorney General Joins National Effort to Uncover Hidden Prescription Drug Costs

Maryland Attorney General Anthony G. Brown has joined a bipartisan group of 44 state attorneys general in advocating for greater transparency in how pharmacy benefit managers (PBMs) operate within employer-sponsored health plans. The coalition submitted a formal comment letter to the U.S. Department of Labor, expressing support for a proposed federal rule aimed at shedding light on PBM revenue streams and practices. This action could have significant implications for the cost of prescription drugs for millions of Americans.

Pharmacy benefit managers, originally established to process prescription drug claims, have evolved into powerful entities that significantly influence the healthcare landscape. They manage prescription drug benefits for health insurers, negotiate rebates and reimbursements with pharmaceutical manufacturers, and determine which medications are covered and at what price. With approximately 136 million Americans receiving health coverage through their employers, the lack of visibility into PBM operations has become a growing concern. The proposed federal rule seeks to address this by requiring PBMs to disclose their revenue generation methods twice annually and granting employers the right to audit them.

A key aspect of the attorneys general’s letter is their call for clarity regarding the interaction between the proposed federal rule and existing state-level PBM transparency laws. PBMs have frequently sought to bypass state regulations by claiming federal preemption under the Employee Retirement Income Security Act of 1974 (ERISA). The coalition is urging the Department of Labor to explicitly state that the new federal rule does not supersede or invalidate these state laws, which have been enacted across all 50 states, the District of Columbia, and Puerto Rico to regulate PBMs. Maryland, for instance, has implemented its own transparency requirements, including a prohibition against PBMs paying independent pharmacies less than they pay pharmacies they own.

Furthermore, the coalition has requested that the Department of Labor affirm its commitment to collaborating with state attorneys general on enforcing the proposed rule. The comment letter emphasizes that the rule should not impede the Department from referring potential violations to state attorneys general, seeking their assistance in investigations or enforcement actions, or coordinating with them when the Department discovers breaches of state law. The significant market share held by the top three PBMs, which manage an estimated 80% of prescription drug claims, underscores the need for robust oversight and collaboration between federal and state authorities.

The attorneys general involved in this bipartisan effort represent a broad spectrum of states, including Alaska, American Samoa, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, the District of Columbia, Georgia, Hawaii, Idaho, Illinois, Indiana, Kansas, Kentucky, Louisiana, Maine, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Vermont, Virginia, Washington, West Virginia, and Wyoming, in addition to Maryland.

Article by Mel Anara, based upon information from the Maryland Attorney General’s Office.

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