State PBM Regulations Get New Life

We're not sure if it's the federal attention being paid to the proposed Medco-Express Scripts merger, state budget pressure, or the advocacy of pharmacists -- probably all three -- but states are taking a second look at PBM laws and there is more attention being paid to these middlemen than we've see in years. For instance, here's an editorial in the Houston Chronicle opposing the merger.

Pharmacists in Alaska turned out to support HB 259, complaining of abusive PBM audit practices. Utah legislation, HB 76, also focuses on these audit practices. The Mississippi Board
of Pharmacy is now implementing its PBM law passed last year.

House Bill 4122 is pending in Oregon, and PBMs have gone on the warpath with a big advertising buy and heavy lobbying. HB 4122 would require PBMs be regulated by the Oregon Board of Pharmacy, and force them to provide insurers and the Oregon Health Plan with information about the rebates and contracts the PBMs enter into with drug manufacturers. The transparency is intended to ensure that PBMs are passing on the savings they generate onto insurers and, eventually, health care consumers. The bill has bipartisan support, and is backed by the Oregon State Pharmacists Association, the Oregon Society of Health-System Pharmacists, and the National Association of Chain Drug Stores.

Bipartisan PBM legislation is also pending in Washington state - HB 2303 and SB 6096. These bills are quite comprehensive and have much in common with the Maine PBM law enacted in 2003 but recently repealed by the new Republican majority there. Unlike in Maine, though, PBM legislation has bipartisan support in most of the country, with Republicans and Democrats alike sponsoring the legislation.

Vermont is also considering PBM legislation, HB 674, posted here: http://www.leg.state.vt.us/docs/2012/Bills/Intro/H-674.pdf

Specialty Drug Costs Drive Legislation Capping Out of Pocket Insurance Costs

States across the country are considering legislation that would limit out of pocket costs for super-expensive specialty drugs for chronic diseases such as hemophilia, multiple sclerosis, and Crone's disease. These drugs can cost as much as $20,000 - $100,000 or more per year, and some insurance plans have started charging co-insurance of 50%. The experiences of patients can be very persuasive to legislators considering bills to cap such costs or otherwise regulate specialty tiers.

Pending legislation in Vermont, Senate Bill 221 which is sponsored by NLARx Board Vice Chairman Senator Kevin Mullin, would cap out of pocket prescription drug costs, including for specialty drugs, at $1,000 per insured individual and $2,000 per insured family. Vermont previously passed a moratorium on specialty drug tiers in insurance effective July 1, 2012 in order to give the Legislature time to consider a longer term solution to the issue.

Maine legislation, LD 1691, that would bar specialty drug tiers was amended in committee and voted out 9-4 in favor. The amended bill may still face an uphill battle on the floor. As amended, the bill would require specialty prescription drugs to be included within any cap on out of pocket spending in an insurance policy executed or renewed on or after January 1, 2013. The provision is similar to language in the Affordable Care Act that would become effective January 1, 2014. This and other legislation is being brought forward by the drug manufacturers; in the Maine instance by Pfizer, according to bill sponsor Rep. Stacy Fitts.

A bill analysis prepared last month by the nonpartisan legislative staff found that specialty tier legislation has also been enacted in New York (Chapter 536, NY Laws 2010), was killed in Maryland, and is pending in California (AB 310), Connecticut (Raised Bill 1084), Kansas (HB 2136), Nebraska (LB 1017) and Washington (HB 1876). Read the staff analysis here.

Read all of the NLARx February 29, 2012 Newsletter