DeSantis targets 'middlemen' to lower drug prices
Calling for “long overdue reforms,” Gov. Ron DeSantis outlined proposed legislation that would target pharmacy benefit managers to try to lower prescription drug costs.
Pharmacy benefit managers, or PBMs, are often described as “middlemen” in the health care system. Working with insurers and other health plans, they play key roles such as negotiating with drug manufacturers, paying claims and building pharmacy networks.
Florida lawmakers in recent years have repeatedly considered proposals to place more regulations on PBMs, at least in part because of complaints by small pharmacies. Lawmakers have passed relatively modest changes, but DeSantis on Thursday indicated he will make the issue a priority during the 2023 legislative session, which will start in March.
“What we’re going to be doing is we’re going to protect consumers and increase accountability,” DeSantis said during an appearance in The Villages.
The announcement came amid a series of efforts in Florida and nationally that supporters say will lower prescription drug prices. Congress and President Joe Biden, for example, passed measures last year that will allow Medicare to negotiate lower drug prices and capped insulin costs for Medicare beneficiaries.
Also, DeSantis and state lawmakers in 2019 approved a plan to import cheaper prescription drugs from Canada for government programs such as Medicaid, prisons and facilities run by the Department of Children and Families. The U.S. Food and Drug Administration, however, has not signed off on the program, drawing criticism and a lawsuit from the state.
Pharmacy benefit managers are major — if little-known — players in the health care system. An industry group, the Pharmaceutical Care Management Association, said on its website that the companies administer prescription-drug plans for 266 million people in the U.S.
The industry says it helps lower prescription costs through such things as negotiating rebates with drug manufacturers and discounts from pharmacies.
“Using innovative cost-saving tools and technologies, PBMs are working every day on behalf of patients and payers to increase affordability and access to prescription drugs,” the Pharmaceutical Care Management Association website said.
But the National Association of Chain Drug Stores and the Coalition of Independent and Community Pharmacies issued statements Thursday criticizing PBMs and praising DeSantis’ proposal.
“‘PBM’ should stand for 'pharmaceutical benefit manipulation' because middlemen and payers are profiting at Floridians’ expense,” Steven C. Anderson, president and CEO of the National Association of Chain Drug Stores, said in a prepared statement. “Patients deserve more affordable access to medicines. Patients deserve the best value of care from the pharmacy and pharmacist they choose.”
As of early Thursday afternoon, detailed legislation had not been filed. But DeSantis said the proposal will include:
- Preventing what DeSantis called “spread pricing,” which involves PBMs keeping the difference between what they are paid by health plans and what they pay to pharmacies.
- Preventing a practice known as “clawbacks” by PBMs that can reduce money for pharmacies.
- Barring PBMs from mandating that consumers use certain mail order pharmacies.
Lawmakers during the 2022 session passed a measure (HB 357) that sought to increase oversight of PBMs, in part by giving the state Office of Insurance Regulation more authority over the companies.
As an example, PBMs in the past were required to register with the state, but the Office of Insurance Regulation did not have power to enforce the registration requirement. The bill allowed the Office of Insurance Regulation to fine PBMs for violations of the requirement.
DeSantis in July also issued an executive order that, in part, required audits of PBMs that provide services in the state’s Medicaid managed care program and the state employee health insurance program.
The executive order also required state agencies to put certain stipulations in new, renewed or extended contracts that involve pharmacy benefit managers. For instance, one of those stipulations would prevent clawbacks.
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