How does the government regulate the pricing of pharmaceuticals?

The government regulates the pricing of pharmaceuticals through a variety of means. In Washington, the Pharmacy Board of Washington (PBW) sets the maximum allowable cost (MAC). This is the maximum amount a pharmacy can charge for a drug. The PBW reviews the MAC regularly and can increase or decrease a drug’s MAC if necessary. The PBW also has the authority to review the pricing of certain drugs, such as those that are mandated by the Affordable Care Act. In this case, the PBW must ensure that the drug’s price does not exceed the cost of manufacturing and distributing the drug. In addition, the PBW can negotiate with drug manufacturers on behalf of the state to get lower costs. For instance, the PBW may enter into a contract with a manufacturer to get a lower cost for a certain drug. This contract must be approved by the state legislature before it can go into effect. Finally, the PBW can also investigate any complaints against a pharmacy or wholesaler regarding overcharging. If the PBW finds that a pharmacy or wholesaler is indeed overcharging, they can issue a warning or even impose a fine or other disciplinary action. Overall, the government regulates the pricing of pharmaceuticals to ensure that consumers have access to the medications they need at a reasonable price. The PBW is responsible for ensuring that pharmacies and wholesalers comply with the regulations and do not overcharge.

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How does the government regulate the pricing of pharmaceuticals?

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