On The Hill: PBM Compensation Models Incentivize Higher Drug Costs (EP. 45)

In this episode of Off Script, Dr. Geoffrey Joyce joins host Garrett Aikens to discuss misaligned incentives and problematic compensation models within the pharmaceutical supply chain that are driving up the cost of medications.Dr. Joyce is the director of health policy at the University of Southern California's Schaeffer Center for Health Policy & Economics, associate professor and chair of the Department of Pharmaceutical and Health Economics at USC Mann School of Pharmacy, and research associate at the National Bureau of Economic Research.ACPE UAN: 0178-0000-25-125-H03-P/TCPE Credit: .5 contact hour (.5 CEU)Initial Release Date: September 19, 2025     Expiration Date: September 19, 2027Learning Objectives:Explain how current contract structures for Pharmacy Benefit Managers create incentives that favor high cost, high-rebate brand-name drugs over lower-cost alternatives such as generics and biosimilars, and describe how this contributes to higher net drug spending.Analyze the potential impact of 'delinking' PBM compensation from list prices on overall prescription drug spending including estimated savings, and discuss whether such a change is likely to affect incentives for drug manufacturers to innovate.Evaluate policy reform options aimed at improving transparency and alignment of incentives in the pharmaceutical supply chain, and assess their feasibility and trade-offs (e.g. administrative burden, effects on different stakeholders).LecturePanda Link to claim credit: Legislative Series: PBM Reform