Proposed Florida legislation targets pharmacy benefit managers

Rep. Jackie Toledo held a news conference Tuesday to announce a proposal (HB 961) that would create a new law called the “Prescription Drug Cost Reduction Act” and make clear that certain practices, such as directing patients to pharmacies owned in whole or in part by pharmacy benefit managers should be prohibited.

The 53-page bill was lauded by the Florida Pharmacy Association, which maintains that so-called PBMs are driving independent pharmacies out of business. But it was criticized by the managed care industry, which calls it a “misdirected attack.”

Pharmacy benefit managers work with health plans and serve as sort of middlemen between drug manufacturers and pharmacies. Toledo’s bill, which is co-sponsored by Rep. Randy Fine, R-Palm Bay, would substantially amend the state’s pharmacy laws to define pharmacy benefit managers and allowable practices.

Michael Jackson, executive vice president and CEO of the Florida Pharmacy Association, pointed to a need to lift the “fog behind the PBM industry.”

“Nearly every prescription provided to residents in this state must come through a pharmacy benefit manager or PBM. There is not much known about this industry which also means there is a lot of confidential information related to prescription drug costs that the public does not have access to,” Jackson said in a statement to The News Service of Florida.

“In the beginning, PBMs were simply claims processors. They are now medical decision makers by determining which medications are covered and which are not,” Jackson added.

Toledo was joined at Tuesday’s news conference at a Tampa pharmacy by Fine, Sen. Jose Javier Rodriguez, D-Miami, Rep. Kamia Brown, D-Ocoee, and Rep. Mike Beltran, R-Lithia.

In addition to the prohibition on steering patients to pharmacies, the bill would make clear that PBMs are not allowed to engage in what’s known as “spread pricing,” or charging insurance companies or other payors more than what the PBMs pay pharmacies or pharmacists that fill the prescriptions.

Among other things, PBMs would be banned from imposing registration or permitting requirements for pharmacists that are more stringent than federal or state requirements

PBMs that violate the law would be subject to $10,000 civil penalties and could have their certifications revoked by the state.

Moreover, PBMs that repeatedly violate the law could be prosecuted under the Florida Deceptive and Unfair Trade Practices Act.

The Legislature last year took steps to try to control skyrocketing costs of prescription drugs by authorizing drug importation from Canada and other countries for state programs and consumers. A staff analysis of the drug importation law noted that about $333.4 billion is spent on retail prescription drugs, with 14 percent paid out of pocket by consumers.

But the drug importation programs require federal approval as well as new rules and regulations, which Florida Agency for Health Care Administration Secretary Mary Mayhew has conceded could take upward of two years.

As of Tuesday afternoon, a Senate version of Toledo’s bill had not been filed. But Senate Banking and Insurance Chairman Sen. Doug Broxson, R- Gulf Breeze, held a lengthy meeting on the role of pharmacy benefit managers in November and said his committee would revisit the issue during the 2020 legislative session, which begins in January.

While the Florida Pharmacy Association backs the bill, the Florida Association of Health Plans is critical of it.

Audrey Brown, president and CEO of the Florida Association of Health Plans, said the insurance industry uses pharmacy benefit managers to reduce the cost of drugs to patients and employers.

“Ultimately, the legislation seeks to undermine pharmacy benefit drug-cost management tools, which, in turn, will increase costs to Florida taxpayers, businesses and patients through premium increases to pay for drug manufacturers’ price hikes,” said Brown, whose group represents HMOs and managed care plans.