Eight pharmacy benefit manager examinations “impeded.” Five tied up in litigation. Nearly $500,000 in unpaid regulatory invoices.
That’s the snapshot from a now-month-old report from the Florida Office of Insurance Regulation’s first-ever examinations of the state’s Pharmacy Benefit Managers (PBMs). And those findings matter now because lawmakers must decide whether to further tighten PBM oversight this session.
For those blissfully unfamiliar with the acronym: a Pharmacy Benefit Manager is the middleman that manages prescription drug benefits for insurers and large employers. These massive PBMs determine which drugs are covered by insurers, what patients must pay out-of-pocket, which pharmacies are in-network, and how much those pharmacies are reimbursed. They are not pharmacies. They are not insurers. But they sit in the financial command center of the prescription drug supply chain.
And the timing of the OIR report was not incidental.
In the House, legislation backed by House Speaker Daniel Perez (HB 697) proposes a drug pricing model that would benchmark certain prescription prices to international markets. In the Senate, SB 1760 would create a Joint Legislative Committee on Medicaid Oversight aimed in part at strengthening PBM regulation and enforcement.
In other words, the Legislature is actively considering expanding regulatory authority over an industry that regulators say is already pushing back hard against the law passed two years earlier. In 2023, Florida passed SB 1550, promising transparency and accountability. The law required PBMs to obtain a Certificate of Authority and submit to biennial state examinations beginning in 2025.
This year’s report represents the first full compliance cycle under that framework, and the results suggest a rocky start, to say the least.
Of 38 PBMs subject to examination, 34 reviews remain active. Eight exams are officially categorized as “Exam Impeded,” because regulators have run into a brick wall put up by the PBM being examined. State officials say they cannot finalize their exam due to a “failure to provide necessary documents or access to systems.” Five others are in “Settlement Litigation.”
Additionally, OIR reports that 20 PBMs collectively owe $487,701.35 in unpaid examination costs – expenses they are required by statute to pay. Some invoices date back months.
To be clear, not every PBM is out of compliance. Three examinations have been finalized; one found no statutory violations. Two resulted in administrative penalties totaling $80,000.
But the broader picture is unmistakable: oversight is underway, but it is being resisted by many – though not all – of the PBMs.
Independent pharmacy advocates argue the report confirms longstanding complaints about the lack of transparency and delay. PBM trade associations, meanwhile, have challenged aspects of OIR’s rulemaking in administrative court, a common strategy when new regulatory regimes are imposed.
The larger question for lawmakers now is whether Florida’s 2023 reforms are functioning as intended, or whether additional enforcement mechanisms are necessary. While SB 1550 promised transparency, the Florida Legislature now has to decide the next phase of PBM policy, while the regulators’ own report suggests they have a long way to go.
