(The Center Square) — There is bipartisan support in the Florida Legislature to impose transparency requirements and restrict pharmacy benefit managers’ (PBMs) role in prescription drug costs.
Nevertheless, bills seeking to do so have failed the last few years, including in 2020.
A December audit commissioned by Florida’s Agency for Health Care Administration (AHCA) may spur that effort in 2021 after documenting “prescription markups” by PBMs cost Florida’s Medicaid system $113.3 million in 2020.
According to the analysis by Millman, PBMs charged $89.6 million in “spread costs,” $17.9 million in administrative fees, $5.8 million in transaction fees and $47,000 in other fees during the 12-month examination of 22 million claims.
Millman’s audit confirms PBMs have been “gaming the system,” Florida Pharmacy Association (FPA) CEO Michael Jackson said. “These middlemen siphon off cash to line their own pockets and control prescription drug decision-making in Florida.”
FPA is a member of EMPOWER Patients, a coalition of neighborhood and independent pharmacies demanding lawmakers resist lobbying by the insurance and pharmaceutical industries to pass PBM reforms that aren’t just “checking a superficial box.”
Through Wednesday, at least two 2021 bills proposing increased transparency in PBM operating procedures have been filed in the Senate.
Rep. Jackie Toledo, R-Tampa, who filed a failed 2020 bill seeking to regulate PBMs, is among lawmakers expected to file PBM-related House measures before the 60-day 2021 legislative session begins March 2.
Senate Bill 528, filed by Senate Health Policy Chair Gayle Harrell, R-Stuart, would specify requirements for, and impose restraints on, prior authorization stipulations imposed by insurers and PBMs for procedures and pharmaceuticals.
The bill would require insurers and PBMs provide “detailed descriptions in clear, easily understandable language of the requirements for, and restrictions on, obtaining prior authorization for coverage of treatment, or prescription drug.”
The bill will be heard before the Senate Banking and Insurance (BI), Health Policy and Appropriations committees.
SB 390, filed by Sen. Tom Wright, R-Port Orange, would authorize the state’s Office of Insurance Regulation (OIR) to require insurers submit all contracts with PBMs for a study to examine PBM’s role in pharmaceutical costs.
SB 390 awaits hearings before the Senate Agriculture, Environment and General Government Appropriations Subcommittee and its BI and Appropriations committees.
The Millman audit revealed Medicaid-contracted PBMs in Florida are collecting $90 million a year in “excess profits” from “spread pricing,” which charges health plans higher prices while paying pharmacies lower prices.
PBM spread pricing for specialty drugs for the very sick and cancer patients, a practice called “steering,” is “rampant” in Florida, according to the audit.
Millman’s recommendations include:
- Use a single PBM to administer state prescription drug programs.
- Outlaw spread pricing and steering.
- Require PBMs report all transaction fees charged pharmacies.
- Mandate a “minimum reimbursement rate” per prescription for independent/rural pharmacies.
As with previous years, the measures will face intense opposition.
“Health plans utilize PBMs to negotiate and push back on unregulated drug companies who will change the price of a drug at any point for profit over patients," Florida Association of Health Plans President/CEO Audrey Brown said. “If legislation is considered, there should be pharmaceutical price transparency included."
CVS Health spokesman Phil Blando encouraged lawmakers to focus on ways to reduce drug prices.
"News reports indicating that independent pharmacies in Florida are working to enact legislation that, among other things, undermines PBM tools proven to lower prescription drug costs should serve as a red flag for Florida’s working families, businesses and taxpayers," Blando said in a statement. "The so-called ‘EMPOWER Patients’ coalition does nothing to lower Floridians’ prescription drug costs and serves only to advance independent pharmacies’ narrow, special-interest agenda. We encourage policymakers to focus on workable solutions that will actually lower prescription drug costs and remove barriers to prescription drug access for all Floridians."
In a December Florida Politics Op-Ed, Pharmaceutical Care Management Association Assistant Vice President for State Affairs Scott Woods wrote PBMs “are doing their part” to keep drug prices down” and being unfairly targeted by the "pharmacists lobby.”
“In Florida, PBMs will save consumers and health care programs more than $43 billion over 10 years, and PBMs helped the state Medicaid program save $2.3 billion,” Woods wrote, claiming Toledo’s bill would have caused “costs to skyrocket for many Floridians, their employers, and the state while lining the pockets of independent pharmacists and padding the bottom line of Big Pharma.”