Supreme Court to Tackle PBM Regulations and How Much They Can Charge

The U.S. Supreme Court announced Friday that it has decided to review a case concerning whether individual states – in this case Arkansas -- have the legal right to regulate how pharmacy benefit managers (PBMs) reimburse pharmacies.

As intermediaries between drug makers, retail pharmacies, and health plans, major PBMs such as UnitedHealth Group (NYSE: UNH) and CVS Caremark (NYSE: CVS) play an important role in the pharmaceutical supply chain. However, PBMs have caught a lot of flak for spread pricing, a practice where they pocket the difference between what they charge healthcare plans and what they reimburse to pharmacies.

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Source Fool.com