A bill placing regulations on pharmacy benefit managers is headed to Pennsylvania Gov. Josh Shapiro’s desk.
The bill, which began in the state House, passed overwhelmingly in the state Senate on Wednesday with some revisions. Those revisions were approved 172-30 in the House on Thursday.
The bill sets restrictions on pharmacy benefit managers, or third-party intermediaries who work with drug manufacturers, pharmacies and insurance providers. Pharmacy benefit managers reimburse pharmacies for the prescriptions customers buy through insurance, but independent pharmacy owners say the reimbursements they receive from them are far less than the actual cost of medications.
Low reimbursements can cause pharmacies to lose money on transactions, especially on expensive brand-name medications. Pharmacists say they don’t have much choice other than to enter contracts with the benefit managers to get their reimbursements, even if they are disadvantageous to the pharmacy. That’s because so many insurance companies rely on benefit managers to distribute and formulate reimbursements.
The bill creates more rules for pharmacy benefit managers, such as restricting clawbacks, or ways that pharmacy benefit managers can charge pharmacies additional fees after drugs are dispensed. It creates more rules around patient steering, when benefit managers try to direct customers to a preferred pharmacy, as well as network adequacy, a measure of how many locations in a given area are included within a benefit manager’s network.
Future studies of tactics used by pharmacy benefit managers, along with regular reports from the benefit managers for transparency, would be required by the bill.
In a statement, bill sponsor Rep. Jessica Benham, D-South Side, described the bill as a huge victory in the battle to reduce prescription medicine costs.
“Drug prices didn’t skyrocket overnight – it’s going to take measures beyond H.B. 1993 to make medicine affordable again,” she said. “But putting corporate middlemen like (pharmacy benefit managers) in check is essential in giving power back to independent pharmacies and the patients they serve every day.”
Victoria Elliott, CEO of the Pennsylvania Pharmacists Association, praised the bill in a statement.
“The broad bipartisan support for this common-sense legislation provides stronger patient protections through enhanced transparency and oversight of PBMs,” she said. “The Insurance Department study will provide critical information to continue to improve oversight and regulation of PBMs in this Commonwealth.”
