The Senate Public Health and Welfare committee advanced a bill Tuesday that aims to improve upon House legislation to increase the regulation and transparency of pharmacy benefit managers.
The committee narrowly passed an amendment with an 8-6 vote replacing all of the language in House Bill 1665. The bill moves to the full Senate for more debate.
The amendment’s author, Republican Sen. Rita Parks from Corinth, told committee members her changes would strengthen the legislation and add key provisions requested by independent pharmacists.
Pharmacy benefit managers are the middlemen used by health insurance companies and self-insured employer plans. The managers have increasingly drawn scrutiny from policymakers because of opaque business practices and market consolidation. Independent pharmacists have warned year after year that their businesses could be forced to close because of low reimbursements from pharmacy benefit managers.
Parks’ amendment drew criticism from several committee members, who argued the bill’s wording would drive up insurance costs, harm businesses and return efforts to pass pharmacy benefit manager reform to where they stalled last year.
“We’ve dealt with this for three years and we seemed on the precipice of getting something done here, and instead of getting something done, we’re right now debating a strike-all that puts us back where we were last year,” said Sen. Jeremy England, a Republican from Vancleave and the most vocal opponent of Parks’ amendment.
Parks said she believes the legislation’s benefits to independent pharmacies are critical, because they sustain access to health care in rural areas.
“At least I will know I provided an avenue for care for all the citizens of Mississippi, with keeping our doors open with our independent pharmacists,” Parks said.
Mississippi lawmakers have proposed bills to regulate pharmacy benefit managers unsuccessfully for several years. A pharmacy benefit reform bill last year made it further in the legislative process than in years past, but died in the House after a lawmaker raised a procedural challenge.
Parks’ amendment maintains many of the provisions in the House’s version of the bill, which passed the chamber Feb. 4. These provisions would increase transparency and prohibit spread pricing, the practice of paying insurers more for drugs than pharmacists in order to inflate pharmacy benefit managers’ profits.
The updated bill would also:
Remove language that would prohibit insurers from requiring a patient to use a specific affiliate pharmacy, a practice known as “steering.” Keep oversight of pharmacy benefit managers under the Board of Pharmacy, rather than transferring it to the insurance commissioner, like in the House’s bill. Require pharmacists to be reimbursed at least as much as an affiliate pharmacy or the Mississippi Division of Medicaid, which covers the cost of the drug and a dispensing fee.Parks has championed pharmacy benefit manager reform efforts in the Senate for several years. She said Insurance Commissioner Mike Chaney told her he believes pharmacy benefit managers should be regulated by the Board of Pharmacy, and that moving those responsibilities to the Mississippi Insurance Department would take at least two years.
“That’s two more years we would lose before (House Bill) 1665 could even be in practice,” Parks said.
England said several major employers and hospitals told him the cost of providing insurance to employees would increase if the state adopts provisions such as requiring independent pharmacists be paid a dispensing fee.
“Our business community is literally screaming at us to not do it,” he argued as he implored other committee members to vote against Parks’ amendment.
At England’s request, the committee made an additional amendment that could force the bill into final negotiations between the House and Senate.
Sen. Brice Wiggins, a Republican from Pascagoula, asked why the committee was advancing pharmacy benefit reform legislation after Congress passed its own reform bill in February. Parks said passing state-level legislation is necessary to strengthen oversight.
Congress enacted several provisions pertaining to pharmacy benefit managers in its February appropriations bill. The legislation included measures that require pharmacy benefit managers to pass all rebates on to employer health plans, and increased oversight of pharmacy management services for Medicare Part D plans and employer health plans with transparency and data reporting requirements.
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