Pennsylvania House of Representatives Passes Pharmacy Benefit Manager Reform Bill With Near Unanimous Vote • Pennsylvania Capital-Star

The state House passed a comprehensive bill Friday to regulate pharmacy benefit managers and help local pharmacists. The bill enjoyed nearly unanimous support, with only four members voting against it.

Pharmacy benefit managers (PBMs) are middlemen in the pharmaceutical industry. They are hired by insurance companies to administer the prescription drug portion of health plans and, in theory, save them money. In doing so, they negotiate drug prices with manufacturers—often receiving large kickbacks in exchange for getting their products on a plan’s approved drug list.

They are also responsible for reimbursing pharmacies when patients pick up their prescriptions with only a copay, if applicable. Many pharmacists said they often receive less than they paid for some of the most expensive drugs on the market.

Pharmacy benefit managers have been accused by lawmakers, regulators, pharmacists and doctors of increase the price of medicines And driving independent pharmacies into bankruptcy.

“The practices that some PBMs have put in place create additional barriers to providing quality health care to patients who truly need it,” said Rep. Valerie Gaydos (R-Allegheny), a co-author of the bill. “Some PBMs are good. Some have also engaged in harmful practices that drive up the cost of prescription drugs. And that’s what this bill seeks to address.”

The bill, authored by Reps. Gaydos and Jessica Benham (D-Allegheny), targets many pharmacy benefit management practices that have been criticized by pharmacists and health care advocates.

It would ban so-called “tiered pricing,” when pharmacy benefit managers charge a health plan a set price for a drug.eimburse pharmacies at a lower price and then profit from the difference.

It would also establish standards for how drug plan managers set pharmacy reimbursement rates. The objective is to limit the losses which, according to independent pharmacists, are pushing them into bankruptcy.

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The bill would also ban so-called “patient piloting.” That's when PBMs push patients, directly or indirectly (with incentives such as drug discounts) toward preferred pharmacies, often owned by the same parent company as the PBM.

The Federal Trade Commission is currently engaged in an antitrust investigation into some of the nation’s largest pharmacy benefit managers. The three largest PBMs, CVS Caremark, Optum Rx and Express Scripts’ Evernorth, control about 70% of all Americans’ health insurance prescription plans.

These pharmacy benefit managers are also owned by parent companies that own their own major health plans as well as pharmacy chains. CVS Caremark, for example, owns Caremark, one of the nation's largest pharmacy benefit managers; United Health, one of the nation's largest health plans; and CVS, the nation's largest pharmacy chain.

The bill also seeks to prohibit pharmacy benefit managers from retroactively recouping money already paid to pharmacists for properly dispensed medications through additional fees added later.

Additionally, the bill clarifies a 2016 law that sought to curb aggressive “audits” of pharmacies.

Audits are a means used by pharmacy benefit managers to ensure that the medications for which they are billed are correctly prescribed and dispensed by pharmacists. However, audits are routinely used to charge pharmacists large sums of money due to errors in paperwork, according to pharmacists and the attorneys who represent them.

The bill would prohibit pharmacy benefit managers from requesting money for so-called “clerical errors,” or paperwork errors that do not affect a patient's receipt of prescribed medications.

However, the 2016 law that attempted to do the same thing was widely considered unenforceable by both the Pennsylvania Department of Insurance and pharmacy benefit managers themselves.

Pennsylvania lawmakers have passed a law aimed at regulating pharmaceutical intermediaries. But the state does not enforce it.

This is largely due to federal laws that exist to provide some uniformity in state regulation of the health insurance industry as a whole. Lawyers for health plan managers have repeatedly argued in courts across the country that these federal rules preempt many state regulations.

That's why Benham says her bill is just one part of a broader effort to reform drug plan managers. She told the Capital-Star earlier this month that she would “encourage my friends in the federal government to take action.”

Pennsylvania Sen. Bob Casey told the Capital-Star that pharmacy benefit manager reform has “significant bipartisan support from both Democrats and Republicans, particularly on the committee that I lead.” [the chair] of.”

His committee advanced a bill that would prohibit drug plan managers from charging patients in Medicare plans more for their medications.

“The key will be to advance broader legislation that addresses pharmacy benefit managers and focus on reducing the cost of prescription drugs,” Casey added.

Perhaps the most important part of his bill, according to Benham, is its transparency requirements. This requires intermediaries to report to the state insurance department where their income comes from.

“Having an idea of ​​what's going on there is really helpful and could lead to possible future regulation,” Benham told the Capital-Star in an interview earlier this month. “We don’t know what more is needed until we have a little more transparency.”

The bill will head to the state Senate, where a nearly identical bill has been working its way through that chamber's committees. However, Benham said that will likely change before final passage in ongoing negotiations with Gov. Josh Shapiro's office and Senate Republicans.

“I firmly believe that HB 1993, as it stands, is a good piece of legislation that would save our community pharmacies and prevent additional pharmacies from closing,” Benham said at a news conference Friday. “We are actively in negotiations with the administration and the state Senate to produce a final product that we hope will reflect the advocacy of community pharmacies, but will also be enforceable.”

Shapiro has repeatedly expressed support for pharmacy benefits manager reform.

“It’s time to reform how PBMs operate here,” Shapiro said during his budget speech earlier this year. “But we need legislation to go further. »