- The Florida Senate unanimously passed a bill aimed at improving transparency measures in the state’s healthcare marketplace.
- The bill targets pharmacy benefit managers (PBMs), requiring them to obtain a certificate of authority for an administrator and implement anti-steering measures.
- Under the measure, manufacturers and nonresident prescription drug manufacturers are mandated to disclose any increases of 15 percent or more of the wholesale acquisition cost during the preceding 12 months, or 30 percent or more of the wholesale acquisition cost during the preceding three calendar years.
- The bill’s passage was lauded by pharmacy associations statewide.
On Wednesday, the Florida Senate unanimously passed a significant piece of legislation aimed at improving transparency measures in the state’s healthcare marketplace. The bill now awaits approval from the House, and if passed, will advance to the desk of Gov. Ron DeSantis for his signature.
The legislation, introduced by Sen. Jason Brodeur, takes aim at pharmacy benefit managers (PBMs), requiring the entities to obtain a certificate of authority for an administrator under the Florida Insurance Code.
Brodeur’s bill also mandates that manufacturers and nonresident prescription drug manufacturers disclose any increases of 15 percent or more of the wholesale acquisition cost during the preceding 12 months, or 30 percent or more of the wholesale acquisition cost during the preceding three calendar years, with an additional requirement that the information will be published on the Florida Health Finder website.
The measure also implements anti-steering measures, which prevents the enforcement of a pharmaceutical network that only includes PBM- affiliated pharmacies. Further, it would prohibit PBMs from requiring patients to use mail-in pharmacies.
“For patients, I cannot tell you what a difference this is going to make in transparency, in the ability to get their prescriptions where they choose to get them,” said Sen. Gayle Harrell, who sponsored the bill. “And for pharmacists, who will not have various customers steered towards chain pharmacies, this is a major, major endeavor.”
The bill’s passage was lauded by pharmacy associations statewide, including EMPOWER Patients, which works to scale back the role of PBMs in the prescription drug supply chain.
“This is a momentous milestone for both patients and independent and community pharmacists, as we are now one step closer to implementing meaningful pharmacy benefit manager reform in Florida,” said EMPOWER coalition member and executive Vice President and CEO of the Florida Pharmacy Association Helen Sairany. “[We] remain cautiously optimistic that this landmark legislation will continue to receive favorable support until it becomes law, codifying long-overdue provisions to rein in predatory PBMs, as well as life-changing consumer and small business protections.”
Earlier this year, the House Health and Human Services Committee paneled a series of pharmacy owners and doctors, where it was stated that just three PBMs control 80 percent of the prescription volume market.
Speakers in favor of regulation against the pharmacy “middlemen” explained that consolidation of negotiating power by three large-scale PBMs — OptumRx CVS, Caremark, and Express Scripts — shuts out smaller pharmacies.
Looking deeper into the trio of PBMs, Caremark controls 33 percent of the market, Express Scripts 26 percent, and OptumRx CVS 21 percent, according to statistics shown by Kristen Pardy.
Moreover, Manufacturer Price Concessions to PBMs reached $236 billion in 2022, more than doubling since 2012.
“There’s been significant consolidation in vertical integration over the last several years, where we hear the promise of increased access and lower costs, but we see the opposite,” Publix Director of Pharmacy Administration Katie Scanlan told the committee. “The PBMs, through the contracting processes, restrict the services that community pharmacies like Publix can offer.”
Last July, DeSantis laid the groundwork for regulatory legislation by issuing an Executive Order directing all executive agencies to include provisions in future contracts with PBMs to implement the prohibition of spread pricing, prohibition of reimbursement clawbacks, and instructions for all state agencies to include data transparency and reporting requirements.
A 2020 Florida study found that major healthcare companies using PBMs positioned themselves to pocket millions of dollars from the state’s Medicaid system which was intended to lower costs for millions of low-income Floridians.
The study found that despite processing less than half of one percent of all pharmacy claims, specialty pharmacies affiliated with PBM’s managed to collect 28 percent of the available profit margin from dispensing prescription drugs.
According to the study, vertically integrated healthcare companies – companies where the health insurance company and PBM also control their own pharmacies – have a significant advantage in prescription drug pricing and reimbursement rates over smaller pharmacy operations that only focus on dispensing prescription drugs.