Press "Enter" to skip to content

House considers bill to increase pharmaceutical industry transparency

  

JEFFERSON CITY, Mo. — A bill seeking to increase transparency between the pharmaceutical industry and its customers is making its way through the lower chamber this session. 

Pharmacy benefit managers (PBMs) operate as a go-between for manufacturers, pharmacies, and insurance companies and manage drug benefits for insurers. Under Rep. Dale Wright’s HB 834, PBMs would be required to file annual reports detailing the previous year’s rebates to the Missouri consolidated health care plan and the General Assembly starting in 2023. Wright told the House Health and Mental Health Policy Committee Monday the bill would increase transparency and pass savings along to consumers.

“When a plan sponsor hires a PBM to manage a prescription plan, they expect the PBM to act in the sponsor’s best interests,” Wright said. “For PBMs, that means negotiating the lowest possible rates with manufacturers and pharmacies and passing those savings along to the plan’s sponsor and individual consumers. However, PBMs typically hide from their clients what they pay for prescriptions and often fail to disclose appropriate information about the rebates they negotiate with manufacturers.”

Wright noted that other states had passed similar laws in recent years, with Arkansas’ plan upheld by the U.S. Supreme Court last year. 

Jorgen Schlemeier testified in favor of the bill on behalf of the Missouri Pharmacy Association, saying the regulations would be part of the national conversation on spread pricing, the process of charging insurance holders a higher amount than a pharmacy to make a profit.

“A few years ago, then-President Trump began to talk about these rebates, and now President Biden is talking about the exact same thing,” he said. “This bill hits straight on what has really been the focus of a lot of attention from these studies, and that’s what they call the spread on the rebates.”

While two others spoke in favor of the bill, they were outnumbered by the five witnesses speaking in opposition. Shannon Cooper testified against the bill on behalf of advocacy group America’s Health Insurance Plans, decrying the bill’s attempt to add more government control over the process. Brian Grace spoke for health service organization Cigna, positing that the bill would increase prices and further complicate the process.

“If you pass this bill, you would increase drug prices,” he said. “You would destroy the networks the PBMs have built to contract with pharmacists for their services, and you would also remove our ability to crack down on bad actors within that network because they would all be forced to be allowed to operate within our systems.”

Committee Chairman Mike Stephens noted the complexity of the issue and said the discussion would continue to evolve during the bill’s time in committee. No executive action was taken on Wright’s bill Monday.