As the leader of a health advocacy organization, I’ve heard story after story from Coloradans struggling to afford the medications they need to live. Far too many Coloradans are choosing between filling a prescription and paying their bills, cutting pills in half to ration, and discontinuing treatment altogether, leading to severely worsening health outcomes. These stories aren’t rare, and are a symptom of a broken system.

We all know prescription drugs in the United States cost far more than they should. Though there are many factors at play in our drug supply chain that contribute to rising costs, Pharmacy Benefit Managers, or PBMs, are powerful industry players often overlooked for their part in driving up prices behind the scenes.

PBMs were originally created to negotiate lower drug prices for insurers and employers. But over time, they’ve evolved into influential middlemen who profit not when costs go down, but when they go up. The big PBMs leverage their linkage with insurance companies to require many drug manufacturers to give them discounts or partial refunds for every prescription they negotiate to be made available on the insurance company’s plan. The PBMs then pocket the savings. Patient co-pays and other out-of-pocket expenses are typically based on the pre-discount or pre-refund price. To the patient, it’s like the refunds or discounted prices never existed.

Fortunately, Colorado lawmakers are taking action and passed House Bill 1094. House Bill 1094 is a bipartisan effort to rein in PBMs’ most harmful practices and restore fairness and transparency to how prescription drugs are priced and reimbursed in our state. It’s a smart, measured response to a growing crisis, which is why it has support from doctors, pharmacists, patients and health advocates from across the state.

HB-1094 ends the practice of PBMs profiting from a percentage of the price of a drug — a model that incentivizes higher prices — and instead allows for a flat, transparent service fee. It would stop PBMs from designing formularies that prioritize more expensive brand-name drugs over cheaper generics, and ensure fair reimbursement to pharmacies, especially in rural communities where closures can leave patients stranded. The logic is simple — if PBMs only get paid when they reduce costs, they’ll actually start doing that.

In 2022, manufacturers paid PBMs $256 billion in rebates and fees. Today, more than half of every dollar spent on brand-name prescription drugs goes to PBMs, insurance companies and other entities that have nothing to do with research and developing new treatments. Some drug manufacturers report as much as 75% of the list price of their drugs goes to billion-dollar corporations instead of lowering costs or finding new cures. It’s no surprise some of the big PBMs are on Fortune’s top-100 companies list.

HB-1094 brings common sense and accountability to a part of the health care system left largely unregulated for too long. We need to make sure when patients go to the pharmacy, they’re getting a fair deal, not sticker shock. If we’re serious about lowering drug costs, we need to look at every link in the chain, and that includes PBMs that have operated in the shadows for too long. HB-1094 brings them into the light and puts patients first, and we urge Gov. Jared Polis to sign this critical legislation.

Jake Williams is chief executive of Healthier Colorado, a nonpartisan, nonprofit organization dedicated to raising the voices of Coloradans in the public policy process to improve the health of our state’s residents.