PBMs often negotiate deals for insurers and self-insured employer plans that offer the plan a discount or rebate on a covered drug’s list price when enrollees use the drug.

Drugmakers and many pharmacy owners want Congress to ban the PBM rebate strategy, arguing that it gives PBMs incentives to drive up drug list prices to absurd levels, and that PBMs and health insurers keep most of the rebate money.

Casey Mulliganan economist from the University of Chicago, has studied the issue and found that PBMs keep only a small percentage of the PBM rebate, and that collecting a percentage of the rebate gives a PBM a strong incentive to negotiate hard for the best rates for its customers , writes Hammond.

“There is evidence that eliminating rebates or delinking them from PBM revenue would ultimately increase drug costs (or at least not drive them as low as they otherwise would be),” Hammond adds.

Hammond’s views may have more impact than usual this week, as Paragon has strong ties to Donald Trump.

Many of the think tank’s analysts worked in the White House during Trump’s first term, and they may be on the way to jobs at the White House or the US Department of Health and Human Services during Trump’s second term.