By Doug Aldeen – ERISA Healthcare Attorney and General Counsel – Visit my website
In a significant win for Texas pharmacists and their patients, Texas Attorney General Ken Paxton issued a long-awaited opinion on Wednesday regarding two key pharmacy benefit manager (PBM) reform bills enacted in 2021 that are intended to curb abusive practices by PBMs.
The attorney general’s opinion indicates that these laws do, in fact, apply to PBMs serving ERISA plans normally outside the scope of Texas Department of Insurance (TDI) oversight.
Market Implications:
Do you short the Big Three PBM’s? According to a number of experts (See link HERE), market conditions are ripening for further disintermediation:
“Two potential challengers include Cost Plus Drugs (headed by billionaire Mark Cuban) and Amazon Pharmacy. These companies aim to avoid rebates, spread pricing and other controversial practices by offering medications directly to consumers at transparent prices, potentially delivering meaningful savings to patients.”
“While we expect the big PBMs will do what they can to protect their franchises, we believe mounting regulatory scrutiny and competitive pressures could catalyze broader industry reform and potentially diminish their market power and profitability. At the same time, we expect these reforms will help improve access to more affordable care and ultimately translate into better long-term returns for healthcare investors.”
