The Second Pharmacy Benefit Manager Regulation Bill Passes

There are three Pharmacy Benefit Manager Regulation Bills this session, two sponsored by State Rep. Andria Bennett and one by Senator Anthony Delcollo (R).

Pharmacy Benefit Managers are little known but they can be hugely consequential when it comes to drug and healthcare costs. They are a third-party administrator of prescription drug programs for commercial health plans, self-insured employer plans, Medicare Part D plans, the Federal Employees Health Benefits Program (FEHBP), and state government employee plans. They essentially are independent mediators between pharmacies, insurance companies and drug companies. Regulating their interaction in the marketplace is an important aspect in regulating drug costs. Over 80% of pharmaceuticals in the United States are purchased through pharmacy benefits manager networks.

Bennett’s first bill, the Clawback Ban, has already passed the House and Senate. Decollo’s Senate Bill 71, passed the Senate on Tuesday by a vote of 18-2-1 and hopefully will get a vote in the House before June 30.

Delcollo’s bill would prohibiting a pharmacy benefit manager from requiring or providing an incentive for an insured individual to use a pharmacy in which the pharmacy benefit manager has an ownership interest. That bill would also require that a pharmacy must be majority owned by a pharmacist or a group of pharmacists.

But the bill that concerns us today, Bennett’s House Bill 194, passed the Senate unanimously this afternoon after passing the House earlier this month by a vote of 38-0-3. The bill would provide a thorough regulatory process for pharmacy benefit managers.

Bennett’s bill, which now heads to the Governor for his signature, would (1) require Pharmacy Benefit Managers (PBMs) to register with the Insurance Commissioner; (2) permit the Insurance Commissioner to issue cease and desist orders based on fraudulent acts or violations of the law by PBMs; (3) require PBMs to maintain certain records; (4) permit the Insurance Commissioner to examine the affairs of PBMs; and (5) grant the Insurance Commissioner the authority to enforce fines, requiring PBMs to take affirmative actions, and suspending, denying, or revoking a PBM’s registration.

In addition, this Act updates existing law regarding maximum allowable cost lists and establishes a more transparent appeals process for a pharmacy to rely on if a PBM does not reimburse the pharmacy the amount owed under their contract or the maximum allowable cost list.

WHERE IS THE BILL NOW? Passed House 38-0-3. Passes Senate 21-0

DEMOCRATIC SPONSORS – Bennett, Paradee, Hansen, Sokola, Baumbach, Matthews, Viola, K.Williams

REPUBLICAN SPONSORS – D.Short, Delcollo

YES VOTES – HOUSE — Baumbach, Bennett, Bentz, Bolden, Brady, Bush, Carson, Chukwuocha, Collins, Cooke, D. Short, Dorsey Walker, Dukes, Gray, Griffith, Hensley, Jaques, K. Johnson, K.Williams, Kowalko, Longhurst, Lynn, Matthews, Michael Smith, Minor-Brown, Mitchell, Morris, Osienski, Postles, Ramone, Schwartzkopf, Seigfried, Shupe, Smyk, Spiegelman, Vanderwende, Viola, Yearick ||| SENATE — Bonini Brown Cloutier Delcollo Ennis Hansen Hocker Lawson Lockman Lopez McBride McDowell Paradee Pettyjohn Poore Richardson Sokola Sturgeon Townsend Walsh Wilson

ABSENT – Briggs King, Heffernan, Q.Johnson