Missouri Lawmakers Seek Lower Drug Prices With Plan To Regulate PBMs

With smaller, non-chain pharmacies claiming pharmacy benefit managers are unfairly setting drug prices and clawing back a percentage of sales later, the Missouri House debated legislation Tuesday that would regulate PBMs in an attempt to protect pharmacy access for Missourians.

The proposal, which could address the ballooning cost of prescription drugs, brought support from pharmacists and opposition from major insurers during an earlier committee hearing.

Jacob Kettle, oncology pharmacy manager for the University of Missouri Health Care system, was among those who said PBMs have compromised the operations of Missouri pharmacies.

Kettle also said PBMs "have also begun to encroach on the patient's important freedom of choice in selecting where to receive pharmaceutical care."

Three pharmacy benefits managers dominate the U.S. market: CVS Caremark, Express Scripts and OptumRx. They are third-party administrators that set up lists of covered drugs, determine copays, negotiate rebates for some drugs to help offset high initial or list prices, and do other behind-the-scenes work.

PBMs can increase competition in drug prices, which can lower costs for consumers. But independent pharmacies also say PBMs can make pharmacies agree to enter into bad contracts.

Rep. Dale Wright, R-Farmington, who is sponsoring the changes, said the legislation will boost transparency by requiring PBMs to report potential conflicts of interest, as well as list any rebates and fees they charge.

"This is a bill that will reduce prescription drug costs for our citizens back home," said Wright, who is a partner in a health care consulting company and a pharmaceutical and medical device distributor. "If we like our local pharmacies, this is good for them too."

"This bill exposes where the money is going," said Rep. Kent Haden, R-Mexico.

"We need our local pharmacies to be viable," said Rep. Hannah Kelly, R-Mountain Grove.

Opponents of the tightened regulations said PBMs promote competition in the prescription drug marketplace by negotiating rebates as well as favoring generics to contain costs for patients and payers.

Rep. Jim Murphy, a south St. Louis County Republican, said the additional regulation and oversight will result in higher prices for consumers.

"I think this is going to be harmful to us," Murphy said.

The debate at the state level comes as pharmacies also have been pushing the federal government to take action on reimbursement rates set by the PBMs.

In 2018, then-President Donald Trump signed bills to stop insurers and PBMs from barring pharmacists from telling consumers when paying cash would be cheaper than using insurance.

The legislation won preliminary approval in the House on Tuesday and awaits a final vote before moving to the Senate for further consideration.

The legislation is House Bill 1677.

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