May 4—A bill that would give
Proponents say the measure would shine a light on a powerful yet obscure part of the health-care industry and create opportunities to address skyrocketing drug prices.
In an interview with the
Pharmacy benefit managers develop the "formularies" that list which drugs health plans will cover; they also negotiate wholesale prices and facilitate reimbursements to pharmacies for drugs they dispense. Those formularies can have huge implications for a drug's profitability, so manufacturers offer rebates and other incentives to pharmacy benefit managers to include their products on the lists.
But without financial data, regulators can't know how much money is being exchanged in the middle ground between drug makers and pharmacies — or if any of those cost savings are being passed on to consumers.
"For the most part, it's a black box and we're trying to peer inside of it," said Downing, a Republican.
THE BILL, which was sponsored by Sen.
It also would require pharmacy benefit managers to disclose information about wholesale drug prices, as well as the aggregate amounts they receive in rebates and other incentives.
"They are required to list not just the rebates but all remuneration — any kind of fee or money that they're receiving from the manufacturers or elsewhere for running these programs," Downing said.
"Once you know how much money is in the system, and you understand what's going where and who's making how much, that gives you a good foothold to start negotiating better contracts and allow market forces to start pushing prices down," he said.
Lastly, Downing said, the bill would strengthen penalties for pharmacy benefit managers that violate "maximum allowable cost" rules stipulated in their contracts. And it would require pharmacy benefit managers to provide accessible pharmacy networks that don't force patients to drive long distances to pick up their prescriptions. Both of those concerns were raised by
Gianforte's health-care policy adviser,
"We set out, ultimately, to craft legislation that provides our state auditor with the tools to obtain information about the routine and oftentimes unknown practices of pharmacy benefit managers," Brereton said, "and, most importantly, to know which pharmacy benefit managers are doing business here in
The bill received only "soft" opposition from industry representatives, who said they welcome transparency but took issue with certain details and called for amendments.
"Pharmacy benefit managers save health plans, and ultimately the consumer, billions of dollars nationwide in this country every year. Without pharmacy benefit managers, I can assure you ... our rates would be going up a lot," Helena lawyer
"We help keep drug prices down, so we do good," Spencer said. "Are there problems in the process? I'm not going to deny that."
A PREVIOUS bill that sought to place limits on pharmacy benefit managers failed in 2019 when it was vetoed by then-Gov.
Downing said the previous effort was limited because, prior to the
"Our hope is that having that information allows us to make better choices and understand what's going on there," he said. "But the other big thing is, we don't know what we don't know. And just turning the lights on so it's no longer an opaque black box, and understanding all the players and where all this is going, it gives us an incredible amount of information for then adjusting as we move forward."
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