A bill that aims to save Floridians money on prescription drugs by regulating pharmacy benefit manager (PBM) business practices was approved by a Senate committee on Monday.
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The Senate Committee on Health Policy unanimously passed Senate Bill 1550, which would mandate several requirements from PBMs. The bill falls in line with Gov. Ron DeSantis’s agenda, as he called for legislation earlier this year to rein in unchecked PBMs and drive transparency among prescription drug prices influenced by Big Pharma in order to lower drug prices.
SB 1550 sponsor Sen. Jason Brodeur (R-Sanford) said it focuses on four key areas—increasing drug pricing transparency; creating defined relationships and contract requirements between PBMs and pharmacy benefit plans; doing the same between PBMs and network pharmacies; and holding PBMs to standards that protect the covered pharmaceutical consumer.
“The ultimate goal of this bill is to help patients in Florida with pharmacy benefit coverage receive their medications in a more accessible manner, and at a more affordable cost,” Brodeur said.
PBMs act as middle men, performing the administrative transaction of processing prescription claims between insurers and pharmacies. They also set reimbursement rates for pharmacies. Several states have alleged that PBMs are conducting unfair business practices, and are considering legislation to regulate them.
Under SB 1550, drug manufacturers would be required to submit information about reportable drug price increases on the effective date of the increase, Brodeur said. The information would be uploaded to myfloridarx.com for comparison purposes.
The bill would also prohibit spread pricing, which refers to a PBM charging a health insurance plan more to process a prescription than it reimburses the pharmacy, and pocketing the difference. It also addresses “steering” by requiring a PBM to build a pharmacy network that ensures convenient access for patients that does not steer them toward PBM-affiliated pharmacies or providers, or require patients to receive their prescriptions through mail order, Brodeur said.
Dr. Kevin Duane, owner of Panama Pharmacy in Jacksonville, testified in support of SB 1550.
“This bill is sorely needed to address profiteering that Floridians experience due to this distorted market, and to the detriment of overall healthcare in this state,” Duane said. “The bill will make an immediate impact for patients by ensuring that rebates received from pharmaceutical manufacturers go directly to lower out-of-pocket costs, copays, and premiums, rather than just lining the pockets of corporate executives and shareholders. It will ensure no patient is forced to receive medication through the mail, and their ability to choose the pharmacy they’d like to use.”
SB 1550 would address clawbacks by prohibiting PBMs from engaging in various retroactive recoupments after a pharmacy claim was paid, Brodeur said. It prohibits PBMs from unilaterally changing the terms of a network contract with a pharmacy, and they would be required to provide a maximum allowable cost (MAC) reimbursement appeal process for pharmacies that challenge a MAC rate that is below a pharmacy’s available acquisition cost.
“Small businesses like mine will be protected from surprise bills, clawbacks, [and other] things like this from predatory insurance companies that can happen sometimes months after I fill a prescription for a patient,” Duane said. “PBMs have taken an outsized role in the drug supply chain, and their anti-competitive practices have led to three of the top 12 Fortune 500 companies being responsible for eight out of every 10 prescriptions processed in the US.”
Connor Rose, senior director of state affairs at the Pharmaceutical Care Management Association, spoke on behalf of PBMs. He said PBMs help develop formularies for covered drugs and pharmacy networks, and work with plan sponsors to make sure beneficiaries have adequate access to pharmacies.
“State governments or companies that hire us are trying to balance quality, access, and cost,” Rose said. “And the reality is that we don’t live in the Garden of Eden, and you can’t necessarily have all three. So these people that hire us can sort of pull levers of the pool of services we offer them to offer [the most] affordable, cost-effective, [and] robust benefits to their employees as possible.”
Sen. Ileana Garcia (R-Miami) asked Rose how PBMs help small independent pharmacies.
“Independent pharmacies are incredibly important in our networks,” Rose said. “We need them to meet adequacy requirements. We know the importance they serve for rural Floridians. We need them in our networks.”
Dr. Elis Brashear, from Brashear’s Pharmacy, testified in support of SB 1550. She said she has partnered with her husband to operate the independent pharmacy in Inverness for over 20 years.
“Last month, I had a patient that needed three boxes of insulin,” Brashear said. “Insulin is life-saving, it’s important. We can’t replace it with something else. There’s not a substitute for insulin. It is what it is.”
Brashear said it cost $1,514 to buy the patient’s insulin.
“Our lovely PBM paid me $1,441 for the insulin, $73 under cost, [with] no labor, no counseling, no staff,” she said. “If we want independent pharmacies to stay in Florida, this bill needs to pass.”
SB 1550 will now head to the Senate Fiscal Policy Committee.