Florida lawmakers joined efforts in other states this year to curb questionable pricing practices of pharmacy benefit managers (PBMs), the increasingly controversial financial intermediaries between drug makers and drug takers.
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Explore This IssueOctober 2022
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Health insurance companies hire PBMs to negotiate discounts and rebates with drug companies to lower prescription drug costs for their members. However, suspicion over who really benefits has led to calls for legislative action at both the state and federal levels.
Proponents of PBMs maintain they help lower the cost of prescription drugs and are an important player in the healthcare industry. Nevertheless, a 2020 Supreme Court ruling that gave states the right to regulate them may prompt greater examination of how they operate.
Recently, Florida legislators passed into law HB 357, which includes a $10,000 fine for PBMs that don’t register with the state Office of Insurance Regulation (OIR).1 The new law changed enforcement responsibility from the Florida Board of Pharmacy to the OIR, giving more teeth to the registration requirement, as well as protection for pharmacies when audited by a PBM or health plan.
“This bill is a step forward on PBM regulation and is especially beneficial for independent pharmacists,” says Robert Levin, MD, FACR, president of Alliance for Transparent and Affordable Prescriptions and past president of the Florida Society of Rheumatology. “The enforcement of registration with the OIR is a good thing as well.
“There is much more work to be done to benefit patient access, which was not included in this legislation,” Dr. Levin added in an email interview.
PBM Pricing Influence
Four years ago, the Florida Legislature banned gag clauses, meaning PBMs could no longer contractually forbid pharmacies from telling patients when a cash payment for a prescription is cheaper than their insurance copayment.2 Similar bans have passed at the federal level.
Other provisions of Florida’s new law apply mostly to pharmacy audits that won’t directly impact rheumatologists and their patients, says Joseph Cantrell, JD, ACR senior manager of state affairs. He views the law a positive development, but says more reform is needed to achieve greater transparency and reduce the drug pricing power of PBMs.
“I don’t want to undersell an improvement, but $10,000 isn’t even pocket change for PBMs,” Mr. Cantrell notes.
In the U.S., 66 PBMs manage the pharmacy benefits of about 270 million Americans, according to the National Association of Insurance Commissioners. Three of the largest of these companies—Express Scripts, CVS Caremark and OptumRx—hold a combined market share of almost 90%.3