Watered down bill to regulate prescription middlemen draws pushback

Clawbacks became a point of contention during a Tuesday committee hearing.

A bill to add oversight to pharmacy benefit managers (PBM) cleared its first committee Tuesday, but changes made to the legislation left neither PBMs nor pharmacists completely satisfied.

PBMs are middlemen between health care plans and pharmacies that are often blamed for raising prescription drug prices. They help determine which drugs insurance plans will cover and negotiate on behalf of insurers to secure discounts from drug manufacturers. When a claim is filed, PBMs collect money from those plans, then pass money to pharmacies through different methods.

Sen. Tom Wright‘s bill (SB 390) would clarify that the Office of Insurance Regulation can examine PBMs, like it does other entities, to audit potential cost-cutting areas. The Senate Banking and Insurance Committee ultimately advanced the bill unanimously, but the legislation nearly didn’t make it out of the committee.

Originally the New Smyrna Beach Republican’s legislation would have stabilized prescription prices to their values at the time an insurance claim is made, ending “clawbacks” in which PBMs charge more for drugs than they initially quoted a pharmacy. The process allows PBMs to pay one price to a pharmacy, but later revise the fee, causing business uncertainty.

However, Wright scrapped part of that change with an amendment filed Monday afternoon at some groups’ requests. The amendment removed part of the revised definition of “maximum allowable costs” from the legislation.

PBMs, who opposed the original bill, supported the change. But pharmacists and pharmacy groups who have been pushing for years for the underlying bill rose in opposition.

“The ability for an insurer or PBM to pay one price to a pharmacy and then later revise that price or otherwise change the cost that they pay after the remittance is something that makes it very difficult for us to do business,” said Kevin Duane, a pharmacist from Jacksonville.

Former Lt. Gov. Jeff Kottkamp, speaking on behalf of Small Business Pharmacies Aligned for Reform, was one who said the amendment would limit the Office of Insurance Regulation’s ability to monitor PBMs.

“What this amendment does is takes out the ability to challenge that kind of activity, especially in arenas where we’re talking about taxpayer dollars, Medicaid, even the state employee claim,” Kottkamp said.

St. Petersburg Republican Sen. Jeff Brandes asked Wright if he would consider postponing the bill to allow more time to review the amendment. Wright nearly conceded before promising to revisit it after unsettling both pharmacists and senators.

“The amendment was put together yesterday to try and take care of some issues some people had,” Wright said. “We probably missed the mark on that.”

Before lawmakers cast their votes, committee Chair Jim Boyd acknowledged PBMs are often confusing, but thanked Wright for trying to find middle ground between both sides of the provision.

“Often times, this process, when everybody on both sides are a little bit uncomfortable, we might be getting toward a pretty good policy decision,” Boyd said.

Wright’s bill next heads to the Agriculture, Environment, and General Government Appropriations Subcommittee, its second of three committee stops. The House companion bill (HB 1155), sponsored by Tampa Republican Rep. Jackie Toledo, has yet to be scheduled for a hearing in its first of four committee stops.

Renzo Downey

Renzo Downey covers state government for Florida Politics. After graduating from Northwestern University in 2019, Renzo began his reporting career in the Lone Star State, covering state government for the Austin American-Statesman. Shoot Renzo an email at [email protected] and follow him on Twitter @RenzoDowney.


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