PBMs: The Hidden Actor Behind Product Hopping

The issue of high U.S. prescription drug prices has received significant attention. In recent congressional hearings, brand-name drug companies have blamed pharmacy benefit managers (“PBMs”) for high prices. PBMs have returned the fire. The ongoing finger-pointing masks the fact that pricing is the result of the two working together. Manufacturers can avoid competition from lower-cost rivals by switching to a reformulated version through “product hopping.” PBMs facilitate this process th