Florida’s governor is taking aim at Pharmacy Benefit Managers (PBM). Earlier this month, Gov. Ron DeSantis announced legislation that he said would protect consumers and help in lowering the price of prescription drugs.
A PBM is a third-party administrator of a prescription drug program that processes and pays prescription drug claims. They also are supposed to negotiate the price of prescription drugs. The biggest are CVS Caremark, Express Scripts and Optum Rx.
The proposal would do the following:
- Require PBMs to disclose all organizations affiliated with the applicant, including any affiliated pharmacies or companies within their corporate umbrella.
- Require PBMs to disclose any complaints or settlement agreements they’ve been party to prior to operating in Florida.
- Direct the Office of Insurance Regulation to act against PBMs that violate state law and hold them accountable.
The proposal also would help with transparency by doing the following:
- Instituting a series of consumer protections to ensure drug manufacturers disclose proposed price increases prior to their going into effect.
- Require all licensed manufacturers to submit an annual report outlining and justifying any increases over the past year.
- Post reports online to ensure transparency and accountability.
The proposal would codify an Executive Order that the governor signed last July directing all executive agencies to include provisions in all contracts to prohibit spread pricing and clawbacks and review all relationships with pharmacies, insurers, and manufacturers. All provisions of that Executive Order are included in the legislative proposal and expanded to include the commercial market.
Walgreens, Publix, the National Association of Chain Drug Stores and the Florida Pharmacy Association are among those that favor of DeSantis’ proposal.
More than 45 states have already enacted legislation that regulate PBMs, 18 of them passed laws in 2021 alone, according to U.S. Pharmacist. Those in favor of regulation say rather than saving consumers money, PBMs retain the discounts they are supposed to pass on to both consumers and pharmacies.
DeSantis noted that there have been previous efforts to pass legislation that would reign in PBMs, but they have been met with resistance from special interests. Last June, the Pharmaceutical Care Management Association opposed a similar federal bill – The Pharmacy Benefit Manager Transparency Act of 2022. It would have generally prohibited PBMs from engaging in certain practices when managing the prescription drug benefits under a health insurance plan, including charging the plan a different amount than the PBM reimburses the pharmacy.
The bill also would have prohibited PBMs from arbitrarily, unfairly, or deceptively (1) clawing back reimbursement payments, or (2) increasing fees or lowering reimbursements to pharmacies to offset changes to federally funded health plans. The Federal Trade Commission also would have been given power to go after PBMs.
Last October, a report issued by the Pharmaceutical Strategies Group found a decline in customer satisfaction with their pharmacy’s PBM. In 2021, respondents averaged an 8.2 out of 10 in satisfaction: That dropped to 7.8 in 2022. Health plan respondents reported significantly less satisfaction than employers.