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NEW YORK — Pharmacy benefit managers have become the target of state legislation around transparency, with lawmakers attempting to increase regulation and protect patients.
Lawmakers believe that increasing transparency within big PBMs would benefit the industry as well as patients through the institution of clear metrics and incentives that would be aligned with the services and patient outcomes that specialty pharmacy provides.
A number of states have continued to push for more legislation to be passed in this area, and some have made significant progress of late.
In Florida, independent pharmacists from McKesson’s Health Mart franchise spent months urging their state legislators to take up and pass legislation aimed at addressing the lack of transparency in pharmacy benefit managers’ drug reimbursement rates. It’s often difficult for independent pharmacists to accurately anticipate reimbursements for dispensing a prescription. They can even end up losing money, creating significant challenges for their businesses.
“So many people rely on their independent pharmacist as their go-to person for health care,” remarked Aneesh Lakhani, owner and head pharmacist of Garden Drug in Oakland Park, Fla. “We want to showcase the services of local pharmacists for legislators so they can see firsthand how we are out there, every day, fighting to improve the health care outcomes of our patients.”
When HB 351 was introduced in the Florida state legislature, Health Mart pharmacists made it clear they wanted the bill passed. Using a system called the Policy Action Network housed on McKesson’s pharmacy ordering platform, Health Mart pharmacists in Florida sent almost 100 emails to their state representatives in support of the bill. Their efforts paid off. The bill was passed, and Gov. Rick Scott signed the legislation into law on March 23.
In Kentucky, a new version of a Senate bill that would put the state back directly in charge of its Medicaid drug program went to the House floor in a specially called committee meeting last month. Senate Bill 5, sponsored by Sen. Max Wise, has evolved into a “transparency bill” that, if passed, will allow the state to find out how PBMs are spending the $1.7 billion a year they get for Kentucky Medicaid prescriptions.
Wise stated to the House Banking and Insurance Committee that he filed the bill because independent pharmacies were being paid such low fees for dispensing Medicaid prescriptions that many are at risk of going out of business, despite a 2016 bill aimed at price transparency. The fees are as low as 85 cents per prescription, though the federal Centers for Medicare and Medicaid Services says it should be around $10.64.
Wise’s original bill would have mandated that amount, but to get it through the House, he had to overcome objections from the Cabinet for Health and Human Services, which said it would cost $36 million a year. The committee substitute bill would let the Kentucky department for Medicaid services set the fee.
Meanwhile, the Arkansas legislature recently approved identical versions of a bill to regulate pharmacy benefit managers. Gov. Asa Hutchinson has committed to signing the legislation.
Both SB 2 and HB 1010 enjoy broad bipartisan support. Since January, Arkansas’ independent pharmacists have complained of sharp cuts in reimbursements paid by CVS Caremark, which is the PBM for the state’s largest insurance carrier, Arkansas Blue Cross and Blue Shield. The Arkansas Pharmacists Association said reimbursements for generic drugs have dropped so low that some independent drug stores may have to close their doors.
