Business Alliance urges Senators to oppose PBM reform amendment

• The Mississippi Business Alliance warns lawmakers that mandating high dispensing fees will contribute to already skyrocketing health care costs.

The Mississippi Business Alliance and its members have come out in opposition to the strike-all amendment to HB 1665, which passed the Senate Public Health Committee last week. 

HB 1665 is the House’s Pharmacy Benefit Manager reform bill authored by State Rep. Hank Zuber (R). It is the only measure alive this session to put forth PBM reforms.

READ MORE: PBM reform bill passes in House, aims to bring down prescription costs

Last week, the Senate Public Health Committee adopted a strike-all amendment to the bill that removed steering prohibitions. As previously reported, State Senator Rita Parks (R) told Magnolia Tribune that her strike-all amendment did remove steering language from the House’s version of the bill, meaning PBMs would still be permitted to steer patients to affiliate pharmacies. In exchange, independent pharmacies would receive a new payment methodology.

READ MORE: Senate removes steering prohibition from PBM reform bill

State Senator Jeremy England (R) expressed concern that the strike-all amendment did not address steering. 

“If we pass this strike-all, Senator Parks, I’m worried that we’re in the exact same spot we were in last year with the exact same issues that we were in last year,” England said, also adding his concern that the new language would adversely affect the State Health Insurance plan. 

The Legislative Budget Office provided a fiscal note to Senator England on Tuesday, noting that the strike-all amendment to HB 1665 would result in a $34 million impact to the State Health Insurance plan.

As for the new payment methodology in the Senate amendment, the Mississippi Business Alliance says the business community has made a good-faith effort to work with the Legislature for the past three years, “and we have supported meaningful legislation to support independent pharmacists.”

“We have agreed compromises on fair and accurate reimbursement models, eliminating clawbacks, spread-pricing, steering, clean claim timelines, licensing of PBMs and PSAOs, appeals, and disclosure,” MSBA stated in a release. “We have been clear from the very beginning that we will oppose any legislation mandating an increase in dispensing fees.”

The original House bill stated that the reimbursement to a pharmacist or pharmacy by a PBM or PSAO for the dispensing of a prescription drug and other products and supplies “shall be a net amount not less than the pharmacy acquisition cost.” Senator Parks’ strike-all amendment changed that language. The Senate amendment regarding dispensing fees now states, “Reimbursement to a pharmacist or pharmacy by a pharmacy benefit manager or PSAO for the dispensing of prescription drugs and other products and supplies shall be a net amount not less than the greater of: (a) The total reimbursement paid to its pharmacy benefit manager affiliate; or (b) The total reimbursement paid by the Mississippi Division of Medicaid in its pharmacy reimbursement methodology.”

MSBA went on to state that PBMs and insurance companies will not absorb these costs.

“Mississippi businesses and employees covered by self-insured and group health plans will bear the brunt. Some Mississippi businesses may shoulder some of these costs. However, the overwhelming number will be forced to pass the increased costs on to their employees or eliminate their employee health plans altogether,” MSBA stated. “Pharmacies play an important role in serving consumers and providing access to prescription drugs, but the free market should determine contract terms and reimbursement without government rate-setting mandates. The bottom line is that mandating high dispensing fees will contribute to already skyrocketing health care costs.”

Signing on to the letter of opposition from MSBA were groups such as the Mississippi Healthcare Collaborative, Mississippi Hospitality & Restaurant Association, Gulf Coast Business Council, Electric Cooperatives of Mississippi, and more.

You can view the letter opposing the Senate strike-all for HB 1665 from MSBA below.