Earlier this year, Kentucky lawmakers introduced House Bill 457, focused on curtailing the powers of pharmacy benefit managers (PBMs) in the state. The legislation follows a 2020 law enacted by the legislation that cut PBMs out of the state’s Medicaid prescription drug program after many complaints from pharmacists that PBMs were profiting at their expense.
PBMs act as a middleman between health insurance companies and pharmacies and are meant to keep costs down by negotiating the best price for consumers. However, as alluded to above, pharmacists and other industry representatives say that is not what all PBMs do.
HB 457 would prohibit PBMs from mandatory mail-order drugs and allow pharmacists more ability to negotiate contract terms. It would also stop PBMs from pushing patients toward pharmacy chains that are affiliated with the PBMs. For example, CVS Health operates one of the nation’s largest pharmacy chains and runs a major PBM business. Therefore, as one might imagine, CVS is opposed to HB 457. “We urge the Senate to reject HB 457,” the company said in a March 21 statement, the day the legislation passed the House. “We should protect consumers from increased health care costs, and lawmakers should focus on the high prices set by big drug companies.”
HB 457 enjoyed unanimous approval in a House committee and passed the House earlier in March 2022, with vote of 88-3. However, it is now in the Senate Appropriations and Revenue Committee, which has a reputation for being a “dead-end for legislation.”
Supporters are Concerned Over the Timeline
Supporters of the legislation are concerned that time might be running out for such a well-supported bill. “This doesn’t make sense,” said Representative Steven Sheldon, a pharmacist and business executive. “How does it fall out of favor in a lickety-split?” Sheldon has joined with a coalition of healthcare organizations that are lobbying the Senate to continue to advance the bill.
The coalition sent a letter on March 23, 2022, to all of Kentucky’s senators that noted “These profit-driven PBM practices are bad for patients, bad for employees of our businesses and bad for Kentucky,” and went on to say, “For far too long, PBMs have played an outsize role in the delivery and cost of health care — often dictating what Kentuckians pay at the pharmacy counter, which medications they can access and the amount pharmacists are reimbursed for their critical services.”
Cathy Hanna, president of the Kentucky Pharmacists Association, told the House Health and Family Services Committee on March 10, “Unfortunately, the services that the local pharmacists provide remain under constant threat from the harmful actions of major players in the health care system,” including PBMs, she said.
Ron Poole, an owner of five independent pharmacies in Western Kentucky, expressed his frustration with PBMs, taking issue with the fact that pharmacists often must go through them to fill prescriptions. PBMs decide how much to pay pharmacists and boost their profits by cutting reimbursement to drugstores, he said. “We continue to have to deal with the middlemen who control the majority of the money,” he said.