Colorado House lawmakers debate measure to regulate and enforce PBMs over alleged anticompetitive practices


Boram Kim


Colorado House members heard both supportive and opposing arguments for House Bill 1227 on Wednesday, a measure that would impose regulations on pharmacy benefit managers (PBMs). 

The bill would require PBMs to register with the Division of Insurance (DOI) and abide by a number of patient protection and price transparency regulations, which would be enforced by the insurance commissioner. 

PBM practices around spread pricing and pharmacy anti-competitiveness have been under scrutiny by lawmakers on both sides of the political spectrum.

“PBMs have definitely been a frustration for a number of us for many years,” said Rep. Matt Soper (R-Delta), speaking on the House floor. “This bill is making major headway towards what our concerns have been as a state. And I would just urge my fellow members to continue to support this bill.”

Prohibited practices under the measure include requiring patients to obtain their prescriptions through mail order, charging pharmacies fees to adjudicate claims, and requiring pharmacies to obtain accreditations or certifications unnecessarily. 

Rep. Ken DeGraaf (R-Colorado Springs) spoke to his concerns with the bill, saying centralizing control under the commission could lead to corruption and free market disruption.

“Where are the good governance guardrails around the commissioner?” DeGraaf asked. “And in this case, I wouldn’t say it’s necessarily the commissioner of insurance [who has the authority] because ultimately this is the governor. So the governor has control of this insurance. So you have to [ask]: is that absolute power something that we want to entrust in one office?”

The Colorado Pharmacists Society (CPS), representing over 800 member pharmacists, technicians, and associated pharmacy professionals, partnered closely with the sponsors on this bill in strong support. CPS continues to see these practices taking place despite laws passed to prevent them in past sessions, according to its Executive Director Emily Zadvorny, PharmD.

In an interview with State of Reform, Zadvorny said the group is tracking 35 bills this session that impact its members. She said existing legislation around PBM practices must be enforced to protect pharmacies and patients and the measures proposed in session would help supplement previous efforts.

“We partnered with RXPlus who is the main driver of [HB 1227] to put some teeth if you will—enforcement capability around the laws that are already on the books. It also puts PBMs in a spot where they have to register with the state, pay some licensing fees, and that helps fund the enforcement on the other end.”

According to the American Pharmacists Association, 82% of pharmacists it surveyed said spread pricing impacted their business and the provision of patient care. It found that over 91% of respondents said PBMs were adversely affecting their practice and ability to provide patient care. 

HB 1201, which 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, is another measure working its way through the House. 

“Spread pricing is just another egregious practice by PBMs to profit off the system, but not really [provide] a service,” Zadvorny said. “And that hurts the top—the employers, the premiums—and that hurts the bottom—the patients. [We are] so highly supportive of [HB 1201] and the transparency around that. So there’s hardly ever a PBM issue that we don’t engage in and support to curb some of those practices.”