FILE - Gov. Roy Cooper NC

Gov. Roy Cooper speaks during a briefing on North Carolina’s coronavirus pandemic response Friday April 17, 2020, at the North Carolina Emergency Operations Center in Raleigh, N.C.

(The Center Square) – North Carolina will increase state regulation of pharmacy benefit managers, starting Oct. 1.

Gov. Roy Cooper signed Senate Bill 257 on Monday. It requires pharmacy benefit managers to get a license to do business in the state. It also protects consumers from surprise fees and overpayments.

Pharmacy benefit managers are subcontractors that often dictate how much a pharmacy can charge a customer for prescription medications. Health insurance companies and Medicaid pay pharmacy benefit managers to negotiate prices with drug manufacturers on their behalf and maintain medication lists.

Under the measure, the initial application fee for a license will be $2,000, and annual renewal fees will be $1,500. The North Carolina Department of Insurance will be administering the licensing process.

The department has 32 pharmacy benefits managers as third-party administrators that pay $300 a year to do business in the state, according to fiscal analysts. Using the current number of pharmacy benefits managers, fiscal analysts estimated North Carolina could collect $64,000 the first year the bill becomes law and $48,000 each following year.

The bill blocks surprise fees and allows pharmacies to refuse to fill prescriptions if they believe the prescription is not in the patient's best interest or if there is a question about the validity of the prescription. The legislation bans pharmacy benefit managers from preventing pharmacies from dispensing any drug and from retaliating against pharmacies.

The new law allows the insurance commissioner to petition a court to order pharmacy benefit managers to pay restitution to pharmacies if they violate some of the policies in the bill. It also stops pharmacy benefit managers from discriminating against health care providers or pharmacies that use the federal 340B Drug Pricing Program.

According to fiscal analysts, "the 340B drug discount program requires drug manufacturers to enter into a pricing agreement for certain drugs with the federal Department of Health and Human Resources in exchange for Medicaid and Medicare Part B covering those drugs."

The Senate gave the bill its final approval 102-0, on Sept. 8. The House also unanimously approved the measure, 41-0, that day.

Staff Reporter

Nyamekye Daniel has been a journalist for five years. She was the managing editor for the South Florida Media Network and a staff writer for The Miami Times. Daniel's work has also appeared in the Sun-Sentinel, Miami Herald and The New York Times.