Price on pharmaceutical drugs are being blamed by economists [Video]

CALIFORNIA, USA — It’s no secret that prescription drugs are unaffordable for many Californians. In just five years, spending on prescription drugs ballooned from $8.7 billion to $12.1 billion, an increase of 39%, according to the most recent state data.

Consumer advocates and health economists are placing some of the blame on pharmaceutical middlemen, which they say needlessly drive up costs by tacking on fees and withholding discounts as profit. It’s a problem that has plagued regulators across the country. This week, California lawmakers are set to vote on first-time regulations aimed at curtailing their tactics. 

Pharmacy benefit managers, also known as PBMs, most often serve as intermediaries between insurance companies and drug manufacturers. They process claims, negotiate the price of drugs using a complex system of rebates, and control the list of drugs that health insurance plans cover, also known as a formulary.

They’re …