SAVANNAH, GA.–The nation's state lawmakers, after considering a model act to regulate pharmacy benefit managers, have decided to shelve the plan.
The National Conference of Insurance Legislators' decision to postpone action indefinitely came after a representative for health insurers told legislators that pharmacy benefit managers are not a problem area that needs regulation, and it would instead hamper insurers' ability to deliver lower-cost prescription drugs to employees.
PBM's are contracted by health and workers' compensation insurers to manage prescription benefits for those insurers. The vote by NCOIL's Health, Long Term Care and Health Retirement Issues Committee to postpone a measure establishing standards and criteria to regulate PBMs was almost unanimous, with dissent expressed by Vermont State Rep. Virginia Milkey, D-Brattleboro. Among the provisions in the draft model is a requirement that a PBM would have to disclose financial arrangements, including industry rebates.
Randi Reichel of Reichel Consulting, speaking on behalf of America's Health Insurance Plans, Washington, cautioned that the model, although well intentioned, would limit health providers' flexibility to determine what it is that they need and their ability to contract with PBMs. Louisiana Rep. Shirley Bowler, R-Harahan, said that the model would be "very destructive to the free-market framework in our country. I think that would be a disaster." She added that the bill would "add costs to the consumer that we can't anticipate." North Dakota Rep. George Keiser, R-Bismarck, noted that one size does not fit all, and what works in Massachusetts might not work in North Dakota, a state of 652,000 people in which 83 percent of premium is controlled by Blue Cross/Blue Shield. In that state, he said, BC/BS is also part owner of a PBM. In her remarks on why the model should be adopted, Rep. Milkey said a model PMM act is needed because "the pharmaceutical industry is robbing us blind as it reaps huge profits" from drugs that are life saving, as well as "drugs that are not helpful and even harmful." The model, according to Milkey, attempts to address a piece of the situation that is "manageable."
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