As the clock winds down on the 2023 Session, the Legislature is inching closer to passing a bill that would regulate pharmacy benefit managers and require them to broaden their networks.
Rep. Linda Chaney amended the House's version of the proposal (HB 1509) onto SB 1550 before the chamber voted unanimously Tuesday to pass the bill. Because the bill was amended, it will have to bounce back to the Senate for final passage before Friday, when the Legislature is set to adjourn.
The legislation is a top priority for Gov. Ron DeSantis but has enjoyed broad support among House and Senate Democrats as well as with Republicans.
Pharmacy benefit managers, or PBMs, are often referred to as pharmaceutical "middlemen." PBMs negotiate drug costs on behalf of insurers. PBMs also process drug claims and manage drug formularies. PBMs earn profits through a combination of revenues, which may include administrative fees charged to health plans, retention of drug rebates paid by pharmaceutical manufacturers, and fees charged to network pharmacies, among others.
The legislation has pit pharmaceutical manufacturers and pharmacists against health insurers and PBMs. Proponents and opponents of the legislation have focused on the costs of the legislation.
A legislative analysis of the House bill notes that it could increase health insurance costs in the commercial market, state group health plans and Medicaid. The analysis includes comments from Florida Blue, Sunshine Health Plan, and the Florida Department of Management Services, each of which projected cost increases.
But proponents, including the Florida Pharmacy Association, say that is not the case.
Information posted on the National Community Pharmacy Association website shows that between 2015 and 2019, health insurance premiums increased on average by 16.66% nationally. Premium increases in states with licensing authority over PBMs during that same time frame was a smidge (0.3%) lower. Conversely, the average increase for states that have not regulated PBMs was slightly higher (0.4%) than the national average.
As amended, SB 1550 requires PBMs to obtain a certificate of authority from the Office of Insurance Regulation by Jan. 1 and requires OIR to submit a report to the Governor and Legislature detailing compliance with the law. The bill also requires drug manufacturers to notify the state of certain increases in drug prices. A drug is reportable if it costs at least $100 to complete a course of treatment and the price has increased by 15% or more during the preceding 12 months; or 30% or more over a three-year period.
The bill creates a new section of law identifying prohibited PBM practices. Specifically, PBMs cannot prohibit, restrict, or penalize a pharmacy or pharmacist from disclosing Io the patient information about the nature of or risks from treatment, or alternatives thereto and the availability of alternative treatments, consultations, or tests. The bill also prevents PBMs from precluding pharmacists or pharmacies from sharing information that may reduce the costs of pharmacist services.
In regards to pharmacy networks, the bill bans PBMs from limiting their networks to pharmacies they have a stake in, directly or indirectly. And it prohibits a PBM from incentivizing, directing, or advocating for patients to use PBM-affiliated pharmacies for the in-person administration of covered prescription drugs.
PBMs also are required to establish pharmacy networks that meet or exceed Medicare Part D standards for convenient access to network pharmacies. That means that an average of 90% of plan beneficiaries in urban areas must live within two miles of a network pharmacy that is a retail pharmacy or a pharmacy. Additionally, an average 90% of plan beneficiaries living in suburban areas must live within 5 miles of a network pharmacy that is a retail pharmacy or a pharmacy. On average at least 70% of plan beneficiaries living in rural areas must live within 15 miles of a retail pharmacy.
DeSantis has championed proposals he contends will lower prescription drug costs. He initially wanted to import drugs from Canada, but the federal government has yet to sign off on his plan. DeSantis switched gears last summer, issuing an Executive Order on PBMs, and followed up with a proposal to regulate PBMs in January.
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