The Senate passed a bill Wednesday that would increase the regulation and transparency of pharmacy benefit managers, which advocates argue will protect patients and independent pharmacists.
The legislation, authored by Sen. Rita Parks, R-Corinth, beefs up a House of Representatives bill focusing on the transparency of pharmacy benefit managers by adding language to tighten appeal procedures, bar the companies from steering patients to affiliate pharmacies and prohibit spread pricing – the practice of paying insurers more for drugs than pharmacists in order to inflate pharmacy benefit managers’ profits.
Parks said the bill, which passed 46-4, has the support of the House, which can now send it to the governor’s desk to sign or go to conference with the Senate to negotiate changes.
“This is the furthest we’ve been in two years,” said Parks. “We’re bringing fairness to the patient and to independent pharmacists.”
The bill’s passage came after a strong showing of support for reform from independent pharmacists, who have warned that if legislators do not pass a law this year to regulate pharmacy benefit managers, which serve as middlemen in the pharmaceutical industry, some pharmacies may be forced to close. They say that the companies’ low payments and unfair business practices have left them struggling to break even.
The Senate’s original bill died in the House, but the body revived most of its language by inserting it into a similar House bill, House Bill 1123, which was authored by House Speaker Jason White.
The Senate made several concessions in the most recent version of the legislation, including forgoing a provision that would have required pharmacy benefit managers to reimburse prescription discount card claims within seven days. These claims are currently paid within 60 to 90 days, which pharmacists argue is a burdensome timeframe.
The bill is a “good start” to real pharmacy benefit manager reform and transparency, said Robert Dozier, the executive director of the Mississippi Independent Pharmacy Association.
“The independent pharmacists are pleased with the current form of House Bill 1123,” he said. “They did not get everything they wanted, but they got what they needed.”
The bill also gives the Mississippi Board of Pharmacy more tools to conduct audits and requires drug manufacturers, pharmacy benefit managers and health insurers to submit data to the Mississippi Board of Pharmacy, which will be available to the public.
Sen. Jeremy England, R-Ocean Springs, said he is concerned the bill will lead to higher health insurance costs for employers, including the state itself, which provides health insurance to state employees.
Pharmacy benefit managers negotiate rebates, or cost savings, for employers, and some critics of pharmacy benefit manager reform argue that regulating the companies’ business practices will lead to higher insurance costs for employers.
England said that Mississippi employers stand to lose tens of millions of dollars and that regulation could deter new businesses from coming to the state.
“This language that we are trying to put into state law here goes too far, in fact it goes to the point where it could end up costing jobs,” he said.
A vote requested by England to determine if a fiscal note is necessary for the bill failed.
Parks said she disagreed that the bill would raise state health insurance costs and called England’s concerns a “scare tactic” meant to deter legislators from passing the bill.
England also proposed an amendment to the bill to remove self-funded insurance plans, or health plans in which employers assume the financial risk of covering employees’ health care costs themselves, from a section of the bill that prohibits pharmacy benefit managers from steering patients to specific pharmacies and interfering with their right to choose a particular pharmacy.
Self-funded health plans often use pharmacy benefit managers to administer prescription drug benefits and process claims.
Parks argued that excluding self-funded health plans from those guidelines would remove the fundamental protections the bill affords pharmacies and patients.
England’s amendment failed.
“Mississippi’s been a beacon in where we have stood with PBM,” Parks said. “We need to continue to be that beacon and not go backwards.”
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