Arkansas is a step closer to becoming the first state to require the middleman in the pharmacy world to receive a license to conduct business in the state. This comes as pharmacists claim they aren't getting fair reimbursement rates.
Pharmacy Benefit Managers (PBMs) work between the pharmacy and your insurance company. Their job is to negotiate and set prices.
The House Insurance and Commerce committee unanimously passed a bill Tuesday that would give the State Insurance Commission oversight over PBMs, requiring them to get licensed to conduct business in the state.
“It’s not just Arkansas we're trying to help with this, it’s the entire country. It’s time for them to answer to somebody," said Rep. Michelle Gray, the bill's sponsor.
When your pharmacist fills your prescription, they get a reimbursement through your insurance. It's the PBMs job to handle the reimbursements. Right now there isn't anywhere for pharmacists to turn when they're not paid fairly, which is why the state is fighting for PBM oversight.
With this bill, the license could be taken away if PBMs don’t maintain network adequacy, meaning they would be required to reimburse pharmacies fair amounts to keep them in network.
Pharmaceutical Care Management Association CEO Mark Merritt sent a statement:
“This legislative mandate would enrich drugstore owners at the expense of patients and the employers that provide prescription drug coverage.”
A representative with CVS Caremark, one of the largest PBMs, sent this statement:
“The proposed legislation limits the ability of payors to effectively manage their benefit plans, and resulting increased costs to the payors could be passed along to their members (i.e. consumers) in the form of higher premiums or copays. ”
"Nowhere in here are we saying what the prices are going to be," Gray said in defense, claiming the bill could actually lower the price of drugs because of the transparency it creates.
This bill still need to go before the full House and Senate to be passed.