Alaska Legislature passes bill addressing drug pricing, PBMs

The Alaska Legislature has passed House Bill 240, which improves prescription price transparency for patients and includes some guidelines for pharmacy benefit managers (PBMs).

Under the bill, patients can now be informed of the lowest available price for their prescription.

The bill requires that PBMs provide pharmacies with the methodology and sources used to determine the drug pricing list. This information must be provided at the beginning and renewal of the pharmacy’s contract.

The bill also includes guidelines for pharmacy audits by a PBM. These guidelines include

  • Providing a written notice of at least 10 business days
  • Not conducting an audit during the first seven days of any month
  • Not conducting more than one on-site audit within a 12-month period
  • Not conducting on-site audits of more than 250 separate prescriptions at one pharmacy within a 12-month period

The PBM must deliver a preliminary audit report to the pharmacy within 60 days of the conclusion of the audit and a final report within 120 days after the pharmacy received the preliminary report.

PBMs also must establish a process for pharmacies to appeal the reimbursement for a multi-source generic drug.

The Alaska Board of Pharmacy supported the bill, as did several independent pharmacists.

“As a small business owner on remote Prince of Wales Island I quite often am paid under cost and ignored by PBMs,” testified Julie McDonald, PharmD, from Whale Tail Pharmacy. “Maximum Allowable Cost (MAC) pricing causes our pharmacy to be paid below purchase cost several times daily and our appeals for MAC pricing are rarely responded to or are completely disregarded. At any point a PBM can change their MAC pricing and they can have multiple MAAC price list leaving essentially no transparency. When trying to address these issues during contracting, I am presented with “take or leave it” contracts. However, since we are the only retail pharmacy for the island, if we are not contracted our patients will not have local access to pharmacy services.

The bill passed both the House and Senate unanimously.