Lawmakers keep PBM reforms alive

• The primary goal is to address the rising cost of prescriptions in Mississippi.

The Mississippi Senate revived their version of a bill to regulate pharmacy benefit managers (PBM) this week by introducing a strike-all to the House’s version of a similar bill. 

Senate Public Health and Welfare Committee Chair Hob Bryan (D) said that moving the bill forward was an effort to address a small part of a bigger problem. 

“We have all manner of people involved in the healthcare world who are not making people well and not keeping people well,” Bryan said, referring to accountants, lawyers, managed care corporations, politicians, insurance companies and PBMs. 

He added that no other industrialized country in the world is dealing with this problem except the United States. 

As previously reported, PBMs were designed to reduce prescription drug costs for consumers. Because they work in conjunction with pharmacy networks that buy drugs in bulk, PBMs maintain leverage to negotiate lower prices and rebates with drug manufacturers. They also create “formularies,” which are approved drug lists designed to identify low-cost, preferred options for treating certain conditions.

According to the Pharmaceutical Care Management Association (PCMA), a trade association that represents PBMs, more than 275 million Americans have health insurance that includes PBM administered prescription drug plans, ranging from commercial health insurance to Medicare and Medicaid.

PCMA estimates that PBMs negotiation of lower drug prices will save health plan sponsors and consumers more than $1 trillion on prescriptions over the next ten years. That works out to $1,040 annually for each patient and their insurance provider.

The Mississippi House of Representatives introduced HB 1123 in an effort to put controls in place for PBMs.

READ MORE: Pharmacy benefit managers under Legislature’s microscope

On Wednesday, the Senate introduced a strike-all to the bill to include language from SB 2677 and make several other changes, namely ensuring the state health plan was included throughout the bill. It also changed reimbursement times from 7 days to the pervious provision of 60-90 days and included pricing language that went back to the “gold standard.”

Senator Rita Parks (R) also clarified that the self-insurers, including Employee Retirement Income Security Act (ERISA) plans, will not be excluded from the spread pricing section of the bill.

Spread pricing occurs when a PBM negotiates a lower rate for a prescription, but charges an insurance company a higher amount than the negotiated rate. The PBM’s compensation for negotiating the lower rate is the “spread” between the two amounts.

Parks said that Ingalls Shipbuilding in Pascagoula specifically was concerned about that section of the measure due to a provision which states, “this section shall not apply to facilities licensed to fill prescriptions solely for employees of a plan, sponsor, sponsorer, or employer.” Ingalls has a medical facility used by

During discussion of the bill, Coast Senator Jeremy England (R) asked if the bill would lead to increased costs to the state’s health insurance plan and if a fiscal note is available to reflect the impact.

When Parks said a fiscal note was not needed because the state health plan has been part of the original law for more than two decades, England pressed further, adding that he feared if a pharmacist determined they were losing money on a drug and could provide proof, the Board would recoup the loss by making everyone pay the same price. Such a move could lead to increased costs to the state while impacting businesses the state would like to attract in its ongoing economic development efforts.

“Business leaders are telling us that if we pass this legislation that costs are going to go up for employers that provide those plans and the state of Mississippi is one of those employers that provides one of those plans,” England said.

Parks said the same system has been in place for decades.

“So, you’re warning me to do away with something that has been in place for 20 years?” Parks asked. “In the last 48 hours we have begun to hear the noise, and to me that just reins in that the PBMs are alive and well and now they are feeling threatened and it’s our turn to take our stand here today.”

Before passage of the bill, England introduced two amendments, one to request a fiscal note and a second to exclude ERISA plans.

“I have talked with many of our manufacturers, our job creators, the people we have in this state that are signing the front of the checks that are paying Mississippians and this is very important to them,” England elaborated while discussing the second amendment. “Many of our largest employers stand to lose tens of millions of dollars under this bill. Those are job killing numbers. This amendment would remove them from that and prevent that from happening.”

Senator David Parker (R) spoke against the second amendment, stating he has seen firsthand through his optometry business how federal insurance companies use ERISA as a shield at the federal level.

“I think we can make decisions at the state level that are good for the state, and I think by adopting something like this, it’s not good for economic development, it’s not good for independent pharmacists,” Parker added.

Parker also took to social media to elaborate why he objected England’s amendment.

“The challenge today on the Senate floor was that the PBMs and some employers tried procedural moves to actually make the bill worse and to shift control to the federal government under the ‘ERISA’ language,” Parker posted on his Facebook page.

Parks also opposed England’s amendment, saying it would impact the patient the most when drugs such as cancer medications are no longer available due to PBM influence on manufacturers, particularly concerning the types of drugs sold.

“How many of you want to go back and tell a loved one that may be suffering today that they will no longer be able to get that drug or the cost of that drug is so expensive?” Parks asked.

Both of England’s amendments failed by way of voice votes. 

The legislation passed the Senate as amended with a vote of 46 to 4. It now heads back to the House for either concurrence or conference.