Colorado legislature considering bills to regulate PBM practices, improve access to prescription drugs


Boram Kim


A range of policies that would impact Colorado’s pharmacies are being considered by lawmakers this session, including measures aimed at regulating practices by pharmacy benefit managers (PBMs). 


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House Bills 1201 and 1227 aim to regulate and enforce laws against unethical practices by PBMs. 

HB 1227 would give the commissioner of insurance authority to enforce regulations around prohibited practices, such as requiring patients to obtain their prescriptions through mail order, charging pharmacies fees to adjudicate claims, and requiring pharmacies to obtain accreditations or certifications unnecessarily. 

HB 1201 would create transparency around drug pricing and require PBMs to charge patients an amount equal to or less than what is paid to pharmacies for prescription drugs. 

PBMs work with integrated healthcare systems, retail pharmacies, and insurance companies as third-party administrators of prescription drug programs. 

PBMs are responsible for developing and maintaining drug formularies, contracting with pharmacies to negotiate discounts/rebates with manufacturers, and processing and paying prescription drug claims, according to the American Pharmacists Association (APhA). 

Gina Moore, PharmD, associate professor at the University of Colorado Skaggs School of Pharmacy and legislative chair of the Colorado Pharmacists Society (CPS), told State of Reform the proposed transparency requirement addresses the PBM practice of spread pricing

“What PBM practices are and what they generally will often do is charge the patient one thing, charge the employer something else and then they keep the difference,” Moore said. “[PBMs] started out about 20-25 years ago as [entities] helping keep drug costs low for the consumers and trying to at least negotiate things like formularies, making sure that patients use the most appropriate drug first.

But then as a way of extending their profits, if you look at some of the PBM practices, [they] can be pretty egregious. The PBMs will often argue that if you pass legislation like this, that healthcare costs, healthcare coverage, and insurance will get out of control and prices will go up, but the data just doesn’t substantiate that. It’s really the PBMs that are keeping the money for themselves.”

APhA recently released the results of its 2023 Survey of Pharmacists that showed 82% of respondents said spread pricing impacted their business and the provision of patient care. The survey also found that over 91% of respondents said PBMs were adversely affecting their practice and ability to provide patient care. 

Lawmakers are also considering reforms to improve accessibility to prescription drugs.  HBs 1195 and 1002 propose establishing an automated pharmacy dispensing system, and a program that would cap copays for a two-pack of epinephrine auto-injectors at $60, respectively. 

Under HB 1002, Coloradans with a prescription for epinephrine, who are neither on Medicaid nor a plan that limits cost sharing for the drug, are eligible to participate. 

HB 1195 would authorize outlets to operate an automated system that dispenses prescription drugs in more patient-convenient areas. 

“So if somebody is in an emergency department, as an example, they can get their prescription filled at a kiosk or the automated dispensing system,” Moore said. “There’s a video component that’s part of the dispensing system [where] a pharmacist will come on and talk to the patient about their medications and how to take them.

[It is] much easier than having to—especially if you’ve had some type of injury—try to find the pharmacy and a health system and get it that way. So we are excited about the access and that pharmacists are part of that process to help patients get their meds and get them safely.”

Moore said pharmacists have one hesitation about the system being implemented in rural areasthat these units do not take the place of pharmacies, which provide many basic healthcare services such as immunizations. 

While CPA remains engaged in conversations about how the system would be implemented, including whether they could extend to retail settings, Moore said the units are limited by the number of medications that can be utilized so she expects health systems and hospitals would be the main points of access.