Friday, March 8, 2024

State and federal lawmakers say they're still trying to rein in health-insurance middlemen, called pharmacy-benefit managers

By Melissa Patrick
Kentucky Health News

A day after Gov. Andy Beshear talked at a White House roundtable about Kentucky's moving to one pharmacy-benefit manager for Medicaid, First District U.S. Rep. James Comer, spoke at another Washington event about his efforts to reform PBMs as chair of the House Committee on Oversight and Accountability.

U.S. Rep.  James Comer
“The focus of what PBMs' role should be, should be to help the consumer have more choice, have lower costs," Comer said at a March 7 event hosted by The Hill. "But what’s happening is the focus now with the PBMs is which drug can we make the most profit off of, regardless of what’s best for the patient. And I don't think that's a good business model." 

PBMs are middlemen between insurance plans and drug manufacturers; they determine what drugs are offered, how much someone pays for the drug, and how much pharmacists are paid.  

Earlier this year, Comer's committee passed with broad bipartisan support the Delinking Revenue from Unfair Gouging (DRUG) Act, which would rein in practices by some PBMs that offer health plans under federal employees' health program. 

Comer said PBM reform remains a priority, and his committee has received more than 40,000 pages of documents for a report that will be released "very soon." He said his panel will have another hearing once the report is release to discuss next steps.

He said those who understand the issue "realize that PBMs have actually added cost to the consumers" at a time when everyone recognizes that the rising cost of prescription drugs is not sustainable. 

Despite congressional concern about the issue, the government-funding bills just signed by President Biden do not include PBM reforms. Asked if they could pass in the "lame duck" session after the November elections, Comer, using his own committee as an example, said, "I think something can always be done before." 

Comer said much of the problem comes from three major PBMs controlling 80% of the market, noting that they are owned by health-insurance companies and have their own mail-in pharmacies. 

“I believe PBMs have had a negative impact on competition, especially among community pharmacists,” he said. “I believe they have an unfair competitive advantage. I believe they’re doing a lot of things that are unethical at best and should be illegal at worst with respect to – I would even go as far as saying extorting fees from independent pharmacies. We’re losing independent pharmacies.”

Kentucky lawmakers have been working on PBM issues for years. Most recently, in 2020, they passed a bill sponsored by Sen. Max Wise of Campbellsville, a Comer ally, that required the state to hire a single PBM for the state's Medicaid program. Before this law, each of the six companies that manage Medicaid for the state had its own PBM.  

At the White House roundtable, Beshear talked about the legislation and how he began investigating PBMs' drug-pricing methods when he was attorney general in 2016-19.

“That single PBM that answered to us, and not to any other company, has allowed Kentucky Medicaid to maximize drug rebates and has saved our Kentucky families about $300 million since we've done it,” he said. “And it allowed us to understand more about how to get the right price.”

Kentucky PBM reform efforts are ongoing

Wise's latest PBM reform measure is Senate Bill 188, which involves PBM reform efforts on the commercial market.  

State Sen. Max Wise
“I’m optimistic this measure will yield similar savings by applying the same standards to the commercial market, effectively cutting costs for Kentuckians with private health insurance plans,” Wise said in a Feb. 8 news release about the bill.  

SB 188 "aims to empower citizens to choose where they purchase their medication, prevent further closures of community pharmacies and ensure fair reimbursement rates for these essential health care providers," said the release.  

SB 188 has been assigned to the Banking and Insurance Committee. It has not yet been heard or voted on in committee, but has received its first reading, an indication that it has a chance for passage. 

Another bill that addresses PBMs passed out of the House Health Services Committee on March 7. House Bill 190, sponsored by Rep. Scott Sharp, R-Ashland, was approved unanimously and was placed in the House for possioble action as early as Monday, March 11. 

State Rep. Scott Sharp
HB 190, as amended by a committee substitute, would allow people to receive their medication directly from the mail, but if it does not get there in time, they would have the option to purchase it from their local pharmacy at the same price it would cost if it was mailed to them.  

Sharp said he was prompted to file this bill because of a personal experience. 

He said he went to his local pharmacist to get a drug for a family member who was having some trouble getting it delivered. He said he was told it would cost $400, instead of the $36 it would cost if it came by mal. 

Upon talking to his PBM, he learned that this was the "penalty" for using his local pharmacy, instead of getting it mailed direct. Since, he said he's learned that this is a common problem and that's why he wants to "fix it." 

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