Imagine walking into your pharmacy to pick up your medication only to find that the drug you have been prescribed is not covered. What does that mean? Because your medication was not “chosen” by a pharmacy benefit manager (PBM) – a shadowy third-party entity that insurance companies hire to manage prescription drug benefits – your anticipated $10 copay might now have turned into $600 per month. How can this happen to California patients with insurance?

PBMs determine which drugs a health plan will cover. They negotiate directly with pharmaceutical companies over the cost of the drugs. While one of the main purposes of PBMs is to leverage the number of people they represent for lower prices from drug makers, it is unclear whether they save insurance carriers and ultimately patients, any money at all. Even if they do, whether they actually pass on those savings to America’s patients is an open question. In fact, in some cases PBMs even charge insurance companies more for contracts that disclose information on how much money they are pocketing for themselves.  Further, the health plans can financially punish the pharmacist if he or she offers the patient a cash price that would save money.

PBMs operate largely behind the scenes in health care, and with little oversight. While PBMs are supposed to bring down the price of medications for individuals, PBMs may actually be raising prices, adding costs to the health care system, and increasing the physician resources required to get patients their needed medications. Across our country, over 250 million people have their coverage of prescription medications controlled by PBMs—among the biggest are Express Scripts and CVS Health. Express Scripts documents revenue in 2015 at $150 billion dollars – money extracted from our healthcare system without much obvious benefit to patients.

PBM involvement can lead to price-fixing, denial of patient rights to proper treatment, and obstruction of the sacred patient-physician relationship. The lack of transparency is a real problem because the decisions PBMs make about which medicines to cover, which to exclude, and how much to charge plan holders can have significant consequences on the well-being of individuals across our country.

Five years ago, health plans, via their PBMs, covered most medications. Today, hundreds of medicines are not covered, including important treatments for prostate cancer, skin cancer, hepatitis C, diabetes, heart disease, and arthritis. The result is that patients who are facing some of the most challenging medical battles of their lives may not be armed with the medicines they need.

The problem has gotten so bad that pharmacists have started to raise their voices in concern. Many say that PBMs serve as unnecessary middlemen that does nothing more than inflate the cost of prescriptions drugs. Even some insurance companies—the very companies that hire PBMs—have had enough. Last March, the insurance company Anthem filed a $15 billion lawsuit against Express Scripts for allegedly overcharging.

Thankfully, some lawmakers in Sacramento have begun to take note. New legislation—Assembly Bill 315—would shine a light on the activities of PBMs. The bill would require that PBMs be licensed by the California State Board of Pharmacy and disclose their activities to the board. It is common-sense legislation that will bring much-needed transparency to part of the health care industry that operates largely in the shadows. It’s time to clear the air, lower the costs of drugs, and get back to the business of saving lives.

Marcy Zwelling-Aamot, M.D., is the vice chair of the American Academy of Private Physicians.