PBMs often negotiate agreements with insurers and self-insured employer plans that provide the plan with a rebate or reduction off the list price of a covered drug when enrollees use the drug.

Drugmakers and many pharmacy owners want Congress to ban the PBM rebate strategy, arguing that it incentivizes PBMs to push drug list prices to absurd levels, and that PBMs and insurers illness keep most of the rebate money.

Casey Mulliganan economist at the University of Chicago, studied the issue and found that PBMs keep only a small percentage of the PBMs’ cash rebates, and that collecting a percentage of the rebate provides a strong incentive for PBMs to trade hard to get the best prices for their customers. , Hammond writes.

“There is evidence that eliminating rebates or decoupling them from PBM revenue would ultimately increase drug costs (or, at the very least, not cause them to be as low as they otherwise would be),” adds Hammond.

Hammond’s views may have more impact than usual this week, as Paragon has close ties to Donald Trump.

Many of the think tank’s analysts worked in the White House during Trump’s first term, and they could be in line to get jobs at the White House or the U.S. Department of Health and Human Services during the second term of Trump.