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New legislation seeks ‘transparency’ in prescription drug pricing, pharmacy process

A bill proposes audits and increased scrutiny.

A bill from a House subcommittee would bring “transparency” to the oft-opaque realm of patent drug prices, focusing on contracts and pharmacy benefit managers’ roles.

The measure began as a proposed committee bill in the House Health Market Reform Subcommittee. Rep. Alex Andrade filed it (HB 7045) Monday.

The bill would require manufacturers to disclose more about price hikes.

Drug makers would be compelled to give 60 days advance notice of price hikes, and annual reports every April of those hikes would be due to the Department of Business and Professional Regulation and the Office of Insurance Regulation.

The bill also makes provision for so-called “pharmacy audits,” which scrutinize pharmacy billing for potential discrepancies and irregularities in charging, with pharmacy benefit managers  (PBMs) in the potential crosshairs.

PBMs are pharmacy middlemen established to facilitate claims approval for medications that require authorization in real-time.

As well, the bill requires contract reporting, with scrutiny added toward “administrative fees” (paid from the insurer to the pharmacy benefit manager), “rebates” (paid from drug makers to PBMs), and “spread pricing” (overages received by the PBM that exceed what was paid out for the drugs).

The reporting requires both aggregate totals and accounts of what money did not make it past the PBM.

The bill would be effective July 1, and insurers would have a year from that date to submit a report to the state.

HMOs would also have similar requirements.

This legislation addresses ongoing concerns about alleged price-fixing by PBMs.

There are similarities here to a Senate bill (SB 1338) moving through committees, though the enforcement mechanisms and language have key material differences that would require reconciliation.

Andrade’s bill is a watered down version of another by Rep. Jackie Toledo (HB 961.) Toledo’s bill addresses the pricing disparity between how much PBMs charge insurance providers compared to how much they reimburse pharmacies, paying self-owned pharmacies more than other pharmacies or steering patients to pharmacies they own. It also addresses PBMs not passing along savings from third-party rebates.

Critics of Andrade’s bill, which includes pharmacists, pharmacist students and small pharmacy owners and operators, argue his bill does not go far enough. Among other reasons, they say the 60-day price hike requirement should also apply to notifying consumers. Those critics prefer Toledo’s bill, but it looks unlikely to advance with lawmakers seemingly more in favor of Andrade’s tiered approach to the problem.

Andrade argues his bill, which would require new data to help identify solutions, is a first step toward solving a problem for which the state currently lacks information.

Despite her misgivings about Andrade’s version of PBM reform, Toledo voted in committee to move the measure forward with hopes that it can be beefed up through the committee process.

Meanwhile, the scrutiny of PBMs comes as Republicans have pushed to lower drug prices by sidestepping American manufacturers altogether.

In 2019, Gov. Ron DeSantis embraced a proposal to bring in import drugs from Canada and other countries.

The details of that, especially regarding the federal rule-making process, are still being worked out.

Following the affirmative vote, the Pharmaceutical Research and Manufacturers of America (PhRMA) issued a statement outlining its opposition to the bill.

“America’s biopharmaceutical companies are committed to working with Florida policymakers and stakeholders on real reforms that put patients first — solutions that ensure patients have access to affordable medicines and the information they need to make informed health care decisions — while preserving our ability to find new and better treatments for diseases,” PhRMA spokesperson Tiffany Haverly said.

“HB 7045 misses that mark entirely. Manufacturers already disclose a range of information, including information on costs and sales. Publishing proprietary, drug-specific information will neither benefit patients nor decrease health care costs and will undermine competition. The proposal does nothing to address how much consumers ultimately pay for a medicine; an amount determined by insurers, not biopharmaceutical companies.

“It’s time to move beyond creating new, costly bureaucratic programs that don’t make a dent in patients’ costs for medicines and look towards proposed solutions that will lead to immediate savings in out-of-pocket costs,” Haverly concluded.

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