Pharmacy benefit managers (PBMs) who don’t register with the state can face a $10,000 fine under a bill that cleared the Legislature this Session.
PBMs negotiate with drug manufacturers on behalf of insurance companies to purchase drugs at reduced prices or promise additional rebates.
They have been pejoratively referred to as “middlemen” due to “spread pricing” — a term describing the practice of charging an insurer one price for a drug and paying the pharmacy a lower cost while pocketing the difference.
In 2018, lawmakers approved limited regulations on PBMs, requiring them to register with the Office of Insurance Regulation. However, that law did not include any mechanisms to enforce the requirement.
HB 357, sponsored by Rep. Jackie Toledo, gives the requirement teeth by allowing the Office of Insurance Regulation to levy a $10,000 fine against anyone working as a PBM who has not registered with the state.
The Tampa Republican has fought for more oversight of PBMs for several Legislative Sessions, arguing they drive up the cost of prescription drugs for all Floridians. When pitching a slimmed-down regulation bill last year, she said PBMs “prey on families and patients in their most vulnerable state, and profit off the backs of everyday Floridians.”
Toledo’s bill also expands upon the 2014 Florida Pharmacy Act, which enumerates the rights pharmacists have when under audit, including one week’s notice before an onsite audit and the right to reimbursement for claims denied due to a clerical error.
But, like the PBM registration requirement, the method of enforcing those rights was limited. If signed, HB 357 would transfer enforcement powers from the Department of Health and the Florida Board of Pharmacy to OIR.
The bill also amends the law to allow the findings of a PBM audit to be appealed through the Statewide Provider and Health Plan Claim Dispute Resolution Program.
The bill cleared both chambers with unanimous votes. If signed by the Governor, it goes into effect on July 1.