Pa. Lawmakers Explore Ways to Make PBM Pricing More Transparent

Last Updated: Mar 14, 2019

pharmacists-drugs-prescription“We have to view prescription drugs as a public health issue” – That’s the message Pennsylvania Auditor General Eugene DePasquale shared with the House Health Committee on March 13, 2019 during a hearing on the role of pharmacy benefit managers (PBMs) in the commonwealth.

The auditor general spoke to lawmakers about reports he recently issued on PBMs, the third-party companies who negotiate prescription drug prices for health insurers. His reports are available online:

Why Increased Transparency for PBMs Is Vital for Pennsylvania Health Care

Pennsylvania Medical Society (PAMED) members have told us this issue is of high importance to them, and we are pleased to see the auditor general taking action. Patients should be able access safe, effective medications without having to worry about excessive costs or a lengthy preauthorization process.

“If your doctor has ever prescribed you a new medication and, when you got to the pharmacy, you were told a “preauthorization” was required, you’ve bumped up against a PBM,” said auditor general DePasquale in his special report on the role of PBMs.

PAMED policy supports evidence-based collaborative policy to address drug shortages and drug prices and calls on PAMED to advocate for effective implementation of legislation to prohibit pharmacist gag clauses.

The PBM reports make several recommendations including:

  • Banning “gag” rules that prohibit pharmacists from telling patients if they could be paying less for a medication
  • Legislation that increases transparency into PBM pricing practices

While PAMED always analyzes each piece of legislation on its own merits to determine our involvement, we strongly support the tenets listed above.

The auditor general found that, based on Department of Human Services data, Pennsylvania taxpayers paid $2.86 billion to PBMs for Medicaid enrollees in 2017 – an increase of more than 100 percent in four years. And, because PBMs are subcontractors of Medicaid managed care organizations (MCOs) rather than direct contractors of the state, their contracts are not required to be open to any entity, such as the Department of the Auditor General, for review.

“We need to find a way to bring more transparency to the system,” said Auditor General DePasquale at the hearing.

PAMED anticipates that legislation concerning PBMs will be introduced during the state’s 2019-2020 legislative session. We will share any updates with members as they become available.

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