|
Getting your Trinity Audio player ready...
|
There is a problem – pretty much everyone in the Senate Insurance and Banking Committee on Wednesday agreed on that much.
What to do about the problem … well, that was a bit stickier.
The problem, identified rather easily, is the manner in which pharmacy benefit managers (PBMs) – the intermediary companies between drug manufacturers and pharmacies – go about charging, discounting and reimbursing various pharmaceutical products for various pharmacies. Some get better reimbursements. Others get reimbursements so low that it’s driving them out of business or preventing them from offering certain popular medications.
The committee members and a stream of public speakers – many of them representing various organizations – spent more than an hour kicking around the PBMs, as they debated two separate bills – SB93 and SB99 – that seek to impose some form of regulations on the middle men and provide relief primarily to independent pharmacies.
Those pharmacies, under the current setup, are being squeezed by the PBMs, because many of the PBMs own or have established relationships with larger, chain pharmacies, such as CVS, and offer them better reimbursements, better access and better pricing for certain medications. In some cases, independent pharmacies are being compensated less than they pay for the drugs they dispense, several pharmacists told the committee.
As a result of that squeeze, PBMs and their affiliated pharmacies are moving dangerously close to monopolizing the industry. In 2023, the three largest PBMs were responsible for filling more than 80 percent of all prescriptions in the U.S.
In an effort to rectify that disparity, the two bills debated Wednesday take mostly similar pathways, with slight differences in how the reimbursement amounts are calculated. SB93, for example, would require that the pharmacies be reimbursed for actual costs plus the state average of dispensing. SB99, on the other hand, would require costs plus the national average for dispensing and 2-percent or $25 fee in addition.
Both bills would prohibit PBMs from reimbursing affiliated pharmacies and independent pharmacies different amounts for the same drugs and both would prohibit PBMs from steering patients to certain pharmacies. Both also remove the so-called “gag” on pharmacists, which prohibit them from informing patients of cheaper prices or explaining why they can’t fill prescriptions due to costs.
Not surprisingly, many of the independent pharmacists support SB99, since it guarantees a higher reimbursement rate and sets more stringent regulations on PBMs.
“This is a solution written by independent pharmacists and it copies successful legislation in states like Tennessee and West Virginia,” said Josh Hardin, an independent pharmacist who helped draft SB99.
Sen. Chris Elliott raised one of the most pertinent questions of the hearing – how imposing mandatory reimbursements wouldn’t ultimately raise costs for consumers.
The answer, according to several speakers who spoke in favor of one bill or the other, is that both bills would ultimately lower the overall costs of drugs distributed through PBMs by eliminating the exorbitant markups on some prescriptions. Weight-loss drugs, for example, have been cited by various watchdog groups as having 2,000- and 3,000-percent markups in some regions. Under both plans, those markups would go away.
To prove the effectiveness of SB99, Trent McLemore, the director of pharmacy for several pharmacies in Madison County, said his company also owns a single pharmacy in Pulaski, Tenn. Every day, his company pays a courier to drive to Pulaski and fill multiple prescriptions there – taking advantage of Tennessee’s model, which pays cost plus $13, according to McLemore – to avoid losing money on the same prescriptions in Alabama.
“The opposition wants you to believe that gravity works in reverse once you cross state lines into Alabama, or that math doesn’t work or data doesn’t compute once you see that welcome to Alabama sign,” McLemore said. “We wrote this legislation with other states, like Tennessee and West Virginia, who have proven, with data, that it works and you save money.”
Sen. Larry Stutts, who sponsored the bill, said West Virginia recently announced that it was saving more than $50 million per year in state money and Kentucky was saving more than $100 million per year through their implementation of similar laws.
On the other side of things, Ted Hosp, with Blue Cross Blue Shield of Alabama said the mandatory fees would increase costs for employers and employees and he urged the lawmakers to consider other options for rectifying the issue. Hosp pointed out that while he agreed it was unfair for pharmacies to receive less in reimbursements than what they paid for medications, much of the problem lies with over-inflated drug prices.
“We encourage you to work to find a solution that addresses the 10 to 15 percent of medications that aren’t being reimbursed properly,” Hosp said. “We agree that that is unfair and we’re on their side.”
The committee did not take a vote on either bill, but is expected to take up both next week.
