A healthcare bill passed unanimously during the long session creates additional protections for people covered by health benefit plans. The bill also contains protections designed to help smaller pharmacies compete with large pharmaceutical companies.
“This bill will assist independent pharmacies by allowing them to provide more information to their patients regarding the amount of the insured’s cost share for a prescription drug,” said Representative Brenden Jones, the legislation’s primary sponsor. “Pharmacists will also now be permitted to sell lower-cost alternative drugs to consumers. Overall, the aim of this bill is to provide a more level playing field for small businesses which play such a vital role in our economy.”1
The Pharmacy Patient Fair Practices Act [House Bill 466] provides the following reforms:
- Allows pharmacists to discuss lower-cost alternative drugs with consumers, and sell lower-cost alternative drugs to them;
- Prohibits Pharmacy Benefits Managers from using contract terms to prevent pharmacies from providing direct store delivery services;
- Prohibits Pharmacy Benefits Managers from charging insureds a co-pay that is greater than the total submitted charges by an in-network pharmacy; and
- Allows Pharmacy Benefits Managers to charge pharmacies a fee for costs related to claim adjudication only if the fee was set out in a contract or reported on the remittance advice of the claim.
The role of the Pharmacy Benefits Manager (PBM) resulted from the passage in 2003 of the Medicare Modernization Act and the creation of Medicare Part D, which offered new prescription drugs benefits. Medicare Part D created the need for a middleman between the insurer and the pharmacy. PBMs identify eligible patients, negotiate drug prices with pharmaceutical manufacturers, and reduce the administrative burden on the benefits provider.
PBMs create a list of medicines covered by a given benefit plan, called formularies, and press for discounts on the manufacturer’s price in order to include their prescription drugs on their lists. Unless a prescribed medicine is included in formularies, insurers won’t cover it and physicians won’t prescribe it — giving PBMs more leverage for negotiating prices.
The Pharmacy Patient Fair Practices Act was signed into law in July and applies to contracts entered into, renewed, or amended as of October 1, 2017.
1. Bladen Online, April 28, 2017: “Rep. Brenden Jones’ HB466, The Pharmacy Patient Fair Practices Act Passes House“