Pharmacy benefit managers (PBMs) save Americans billions of dollars each year by lowering the prices of prescription drugs and the costs of prescription drug coverage. However, as I explain in this Article, mandatory disclosure regulations recently enacted in several states and at the federal level under the Affordable Care Act threaten to disrupt the cost savings that PBMs currently produce for consumers. These regulations require PBMs to disclose competitively sensitive financial information to various participants in the prescription drug market. Although mandatory disclosure regulations are premised on the idea that PBM clients can only ensure that they are paying a competitive price for a PBM’s services if they know the specifics of the PBM’s financial arrangements with pharmaceutical manufacturers and pharmacies, there is no theoretical or empirical reason to believe mandated disclosure of this information is necessary. Not only are these regulations unnecessary to achieve competitive outcomes, they also impose significant costs on PBMs. The additional disclosure increases both direct costs and litigation costs for PBMs. More importantly, the regulations foster tacit collusion and reduce PBMs’ ability to negotiate discounts with pharmacies and rebates with drug manufacturers. By disrupting competition in the prescription drug market, mandatory disclosure regulations will ultimately increase the prices that consumers pay for prescription drugs.
Current Print Issue
The Article challenges calls for the deregulation of party campaign finance as part of the ongoing transformation of federal campaign finance law under the Roberts Court. First, on the legal front, the Article presents a new constitutional approach to campaign finance corruption that builds on the basic premise that what can be plausibly exchanged between an individual contributor and individual officeholder, […]
“[W]e must never forget, that it is a constitution we are expounding.” If there was such a danger when Chief Justice John Marshall wrote those words, there is none today. Americans regularly assume that the Constitution is special, and legal professionals treat it differently from other sources of law. But what if that is wrongheaded? […]
This Article argues that recent calls for antitrust enforcement to protect health insurers from hospital and physician consolidation are incomplete. The principal obstacle to effective competition in health care is not that one or the other party has too much bargaining power, but that they have been buying and selling the wrong things. Vigorous antitrust […]
Symposium on Reassessing the Restatement of Employment Law
The Cornell Law Review hosted a Symposium on Reassessing the Restatement of Employment Law on Friday, November 21, 2014, at Cornell Law School. The Symposium offered the first commentary on Restatement of Employment Law, a twelve-year project, which the American Law Institute approved in 2014. Click for Symposium Agenda
Symposium on Extraterritorialism
The Cornell Law Review will publish its annual Symposium issue for Volume 99 with a focus on extraterritorialism in September 2014. The flurry of recent Supreme Court decisions turning on a revived door-closing territorialism is attracting the attention of legal scholars in various substantive as well as methodological fields of federal law, and the lines […]
Cornell Law Review Submissions Box Is Now Closed
The Cornell Law Review and Cornell Law Review Online are no longer accepting article, essay, or book review submissions for Volume 102 until August 2016.
Welcome to CornellLawReview.org
Welcome to CornellLawReview.org, the new online home of the Cornell Law Review. In the spirit of its mission as a student-run journal, the Law Review is launching this site to provide greater access to its top-notch legal scholarship and more publishing opportunities for legal academics. The website will host all of the content that the Law Review publishes in print […]