Governor Hutchinson called for a Special Legislative Session to begin March 13 at 9:00 a.m. that includes discussion over Pharmacy Benefits Managers.
Pharmacists have been fighting PBMs since January, claiming they’re not getting fair reimbursement rates, causing them to lose money by filing prescriptions, forcing them to turn away customers, and in extreme cases, putting them in jeopardy of going out of business.
PBMs are the middleman between your pharmacy and insurance company. Their job is to negotiate and set prices.
The bill, sponsored by Representative Michelle Gray (R-District 62), would require PBMs to receive a license to operate in the state. It would give the state's Insurance Commission oversight over PBMs and the authority to create rules and regulations.
“This is designed to level the playing field and put a referee on the field and the refer will the insurance commission,” said Dr. Scott Pace, CEO of the Arkansas Pharmacists Association.
The bill would not control pricing, but it would require PBMs to have an adequate network of pharmacies, meaning they would have to reimburse all pharmacies fairly to help them stay in business.
“That way if they try and pay below cost to try and force the pharmacies out of business, if they try to do that they wouldn’t have adequate network anymore so it forces them to play fairly without dictating payment,” said Gray.
The bill would also strip away gag clauses in PBM contracts, allowing pharmacists to be more open with customers.
CVS Health Communications Director Christine Cramer released this statement:
“We continue to work closely with state legislators and the attorney general on the proposed legislation.
However, language currently being drafted goes well beyond the regulation of PBMs and would eliminate the tools that help lower the cost of prescription drug benefits.
As currently contemplated, these potential PBM regulations directly interfere in the contracts between PBMs and their clients, negatively impacting the ability to effectively manage a pharmacy benefit in the state.As a result, while they may benefit independent pharmacies, these proposed regulations would increase costs for Arkansas consumers as well as payors in the state.”
The governor’s call on PBMs states:
To alter Arkansas code concerning the licensure of pharmacy benefit managers providing services for health benefit plans under the Arkansas Insurance Department; amend applicable definitions; require a reasonably adequate and accessible pharmacy benefits manager network; regulate the conduct of pharmacy benefit managers; authorize the Arkansas Insurance Department to examine and audit pharmacy benefit manager records; establish reporting requirements for pharmacy benefits managers; prohibit deceptive and unconscionable trade practices pursuant to the Deceptive Trade Practices Act, Ark. Code Ann. § 4-88-101 et seq., the Arkansas Pharmacy Benefits Manager Licensure Act, Ark. Code Ann. § 23-92-501 et seq., and the Trade Practices Act, Ark. Code Ann. § 23-66-201 et seq.; and authorize the Arkansas Insurance Department to establish rules concerning the licensing, application fees, financial solvency requirements, network adequacy, prohibited practices, reporting requirements, compliance, enforcement requirements, rebates, compensation, and the listing of plans, by pharmacy benefits managers in the State of Arkansas.