Sen. Linda Chesterfield, D-Little Rock, speaks during a legislative meeting on Oct. 28, 2024. (Mary Hennigan/Arkansas Advocate)
In a reversal, Arkansas legislators in a split vote Friday approved a proposed rule they rejected a day earlier that could require pharmacy benefit managers (PBMs) to include dispensing fees in their reimbursements to pharmacies for prescription drugs.
The Arkansas Legislative Council’s decision capped off hours of debate in committees this week over the measure, which is intended to replace an emergency rule that expires next month.
The newly approved rule allows the state’s insurance commissioner to determine the amount PBMs should add to pharmacists’ reimbursements. PBMs are companies that negotiate prescription benefits among drug manufacturers, distributors, pharmacies and health insurance providers.
Arkansas lawmakers debate dispensing fees for pharmacy benefit managers in five-hour hearing
ALC’s Administrative Rules subcommittee rejected the proposed rule Thursday, but the full council resurrected debate on the measure Friday after Sen. Mark Johnson, R-Little Rock, made a motion to vote on the rule separately while adopting the rest of the subcommittee’s report.
Lawmakers in favor of the rule — including Little Rock Democrat Sen. Linda Chesterfield, who made a motion to adopt the measure — said it could help address unfair PBM reimbursement rates that have contributed to the closure of independent pharmacies in Arkansas.
“We’re losing pharmacies across this state, and we’re losing pharmacies across this state simply because they are not reimbursed at a rate that will allow them to thrive,” Chesterfield said. “As one of those individuals who takes advantage of [a] local pharmacy that’s not big pharma, that is not a chain pharmacy, that does not send stuff through the mail, I believe that we have got to save these pharmacies.”
Opponents of the measure argued it’s tantamount to a tax on their constituents because the fee will be passed on to consumers, and that it won’t address the issues at hand.
Sen. Jonathan Dismang, R-Searcy, said this is a complicated issue and noted that the state insurance department acknowledged in testimony that the rule doesn’t tackle issues they’re having with PBMs. Lawmakers are in “an unfortunate situation” to be making a decision that won’t accomplish the goal of helping pharmacies, he said.
“I am afraid, and I firmly believe, what’s going to happen is, again we have given false hope to the pharmacists across this state that somehow something is going to be fixed by what we’re passing,” Dismang said. “But what I guarantee you we have done is we are intruding on contracts between businesses and individuals or companies, and we are saying as the government we will know better. I’ve never really thought that to be my job here.”
Dismang said he supports holding PBMs accountable when necessary and pointed to laws passed by the Legislature that allow the state’s insurance department to do that.
Act 900 of 2015 required PBMs to pay pharmacies at least as much as the national average of what drugstores pay wholesalers for drugs. Additionally, Act 1 and Act 3 of 2018 forbade PBMs from paying their affiliate pharmacies higher reimbursement rates than non-affiliate pharmacies.
The nation’s three largest PBMs — CVS Caremark, OptumRX and Express Scripts — are owned by much larger corporations that each also own a top-10 health insurer. Together they control about 80% of the U.S. prescription market, according to a Federal Trade Commission study.
With the ALC’s approval on Friday, the new rule will become effective 10 days after it’s filed with the Arkansas Secretary of State. Lawmakers said they anticipate the discussion surrounding PBMs to continue during the upcoming legislative session, which begins Jan. 13.
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