Calling out Pharmacy Benefit Managers, or “PBM’s” for predatory business practices, a bipartisan group of lawmakers that includes Republicans Jackie Toledo and Randy Fine, Democrat State Rep. Kamia Brown and Democrat State Senator Jose Javier Rodriguez, unveiled new legislation this week designed to increase Floridian’s access to prescription drugs while lowering costs. The proposal would limit the practice of forcing patients to get their prescription drugs from pharmacies owned by pharmacy benefit managers. At a news conference announcing the plan, the lawmakers were joined by patients, doctors and pharmacists and small business owners who say PBM’s are pocketing most of the alleged savings they are able to procure.
“PBMs aren’t medical doctors, and they shouldn’t be making medical decisions. Yet time and again we see them deny, delay, or obstruct the treatment plans that have been carefully considered and approved by patients and their physicians,” said Dr. Brandon Konkel, an oncologist from Tampa with the Florida Cancer Specialists. “PBM profits should not come before the patients, that’s why it’s essential for Florida to join the growing number of states that are pushing to reform this broken system.”
Nearly one-third of all Americans already get their drugs through one of three middlemen PBMs. And these three are all linked to major insurance companies, like UnitedHealth, Aetna (which also owns CVS drug stores), and the largest of all, Cigna, which owns ExpressScripts.
These top three PBMs control approximately 85% of the market, owning their own mail order, specialty and retail pharmacies. And they use their market power to “steer” patients to those pharmacies that will generate the greatest profit for themselves, not necessarily save the patient any money. These anti-competitive processes have reduced consumer choice and had a devastating effect on neighborhood pharmacies across the state. Over the past three years, the number of independent pharmacies in Florida has fallen by 15% and it continues to drop.
More than 30 states have already taken action to reform the PBM industry by addressing some of their predatory business practices, including copay “clawbacks” that result in additional after-the-fact payments for PBMs. Others have targeted the practice of spread pricing, the difference between what a PBM charges a pharmacy versus what it charges its parent insurance company. In 2018, Florida lawmakers passed legislation prohibiting PBMs from including “gag orders” in contracts that restrict pharmacists from informing patients about lower-cost alternatives.
PBMs claim to negotiate savings for patients and drive prescription drug costs down for consumers. However, other states have conducted audits of PBM practices and found mixed results. Last year, a report from the Ohio Auditor of State found that “PBMs collected $208 million in fees on generic Medicaid prescriptions, or 31.4 percent of the $662.7 million paid by managed care plans on generics during the one-year period April 1, 2017 through March 31, 2018.”
Florida lawmakers are looking for ways to avoid similar costs in Florida.
“Our priority is advocating for Floridians who have felt the pinch in their wallets because profit-driven policies by PBMs are robbing patients of savings that should rightly be theirs,” said Rep. Toledo. “Consumers need to know that their state lawmakers are fighting for their best interests, and our legislation will help put the power back where it belongs: with the patient.”
“PBMs don’t prescribe drugs, they don’t manufacture drugs, and they don’t dispense drugs – but somehow they have figured out how to make billions of dollars off the drug marketplace at the expense of patients,” said Loretta Boesing. “As a caregiver and patient, I think it’s about time we start getting the benefits we’re entitled to without having to navigate the complex hurdles that PBMs require everyone to jump through.”
The bill, HB 961, does not yet have a committee assignment yet, but is expected to be taken up once the legislature reconvenes in January.