Florida HB 351 calling for changes to the Medicaid laws as they pertain to the regulation of Pharmacy Benefits Managers (PBM) has now been referred to the Health Innovation Subcommittee for review and action. The bill as now proposed would include the creation of a brand-new section to the Pharmacy Practice Act in Florida that currently oversees the regulating of PBM’s and, if passed, would result in some significant changes regarding the way that Pharmacy Benefits Managers are allowed to do business.
The Major Changes Proposed By FL HB 351
The most significant changes that Florida HB 351 would result in if it passes include all of the following:
1. Prohibiting of any managed care plans to allow a PBM to require that a patient of the plan utilizes a pharmacy where:
– the pharmacy has any control and/or investment in the Pharmacy Benefits Manager ownership.
– the PBM holds any ownership in the pharmacy or the drugstore’s business.
2. The prevention of any PBM from instituting or utilizing an incentive program to members and patients that encourages them to use a pharmacy that is owned by the PBM.
3. Establishes a requirement that all MAC lists are updated weekly (every seven days).
4. Creates penalties for non-compliance of PBM actions or operations.
5. Implementation of a an appeals process (plus procedures) regarding the reimbursement of Rx medications for what are considered as “small” business network drugstores and pharmacies.
The Role of a Pharmacy Benefits Manager (PBM)
The role of a Pharmacy Benefits Manager is to act as a as a third-party administrator (TPA) in regards to the administration of a prescription drug program. Such plans include Medicare Part D and numerous commercial corporate health plans, self insured plans, and government employee plans (both federal and state). According to APhA’s (The American Pharmacists Association) description, they “are primarily responsible for developing and maintaining the formulary, contracting with pharmacies, negotiating discounts and rebates with drug manufacturers, and processing and paying prescription drug claims. For the most part, they work with self-insured companies and government programs striving to maintain or reduce the pharmacy expenditures of the plan while concurrently trying to improve health care outcomes.”
In 2017 it was estimated that approximately three-hundred million Americans currently have a PBM in some way managing their pharmacy benefits. There total nearly twenty “major” PBM companies in the US, but the three “Super PBM’s” account for an estimated 80% of all of the coverage. Between them they have a total enrollment of nearly 200 million patients.
The three largest or “Super PBM’s” (ranked by the total number of patients that are enrolled) include:
1. Express Scripts
2. CVS Health (formerly CVS Caremark)
3. United Health (also referred to as OptumRx & Catamaran)
Are PBM Changes Necessary?
The primary purpose in the establishment of Pharmacy Benefits Managers was to maximize the purchasing power for large groups of patients, resulting in a price reduction for their prescriptions and medications. They primarily try and accomplish this goal by using their volume buying power and receiving rebates and discounts from the various pharmaceutical drug manufacturers. However, they also sometimes imposed strict limits on what pharmacies were allowed to participate in certain programs and for certain medications. This basically led to a situation where patients were “forced” into getting their prescriptions filled at a retail pharmacy that perhaps they would not normally have chosen to use, or getting their Rx’es through a mail-order pharmacy. Many independently owned retail pharmacies view this practice as unfair and discriminatory in nature. They argue that the restrictions imposed by the PDM are prohibiting their customers and patients from having a choice in where they want to get their prescriptions filled. The local drugstore owner is put at a distinct disadvantage when it comes to pricing. Additionally, numerous healthcare practitioners and clinicians point out that such practices actually may put their patients at risk. They cite the fact that the “additional” pharmacy that is involved in servicing the patient may not have a complete history of their patients’ drug regimens, history and allergies (as is the case if a patient filled all their prescriptions at a single pharmacy).
To date there have been no independent studies showing that the role of the PBM is being met and that their constituents have actually received lower Rx pricing. A study that is often cited by CVS claimed a reduction of 6.8% in prescription pricing in 2015 for its members, but so far the results have not been independently substantiated. In 2015 there were actually seven lawsuits filed independently against PBM’s for fraud, antitrust violations and even criminal negligence. Additionally, at a 2014 ERISA hearing (Employee Retirement Income Security Act) it was clearly pointed out that in many instances the PBM has a “conflict of interest” in providing their members a reduction in their prescription drug spending.
Questions or Comments?
This is not intended to “build a case” against PBMs, but only to point out that perhaps some reform is necessary for the independent community pharmacies and drugstores to be able to make a profit and continue to operate as any other business does. It may be in everyone’s best interest (especially the patients and consumers) if Florida HB 351 passes and the “playing field” becomes more equal and fair.
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