Bennett Bill Would Hold Pharmacy Benefits Managers Accountable

DOVER – Legislation filed Monday from Rep. Andria Bennett aims to shine a light on pharmacy benefits managers, increasing oversight and transparency of the vastly unregulated third-party drug administrators.

Pharmacy benefits managers act as intermediaries between health plans, pharmaceutical manufacturers and pharmacies, managing coverage, negotiating discounts and savings, and processing pharmaceutical claims. They manage commercial health plans, as well as Medicare Part D plans, among others. In fact, two-thirds of the 6 billion prescriptions that are written each year in the United States are processed by a PBM.

Despite their prevalence, PBMs are generally unregulated and have been known to pocket drug savings instead of passing them on to consumers. This lack of transparency reveals a host of problems, ultimately resulting in limited choices for consumers and increased cost in medication.

“High prescription drug costs can debilitate a person’s finances, hindering how they save and plan for daily and long-term expenses. We owe it to consumers to fight for their best interests, increasing access and affordability to needed medications,” said Rep. Bennett, D-Dover South. “Pharmacy benefits managers offer a service that should put the consumer first, not profit. With this legislation, we are increasing transparency and oversight so that everyday Delawareans are not taken advantage of in such a vulnerable way.”

House Bill 194 would require PBMs to register with the Delaware Insurance Commissioner and permits the office to examine their affairs, issue cease-and desist orders based on certain fraudulent acts or violations, and impose fines and action plans if needed. It also requires PBMs to maintain records of services provided and updates existing law to establish a more transparent appeals process for pharmacies if they are not reimbursed correctly. 

“As Insurance Commissioner, one of my highest priorities is to address the high cost of prescription drugs that many Delawareans face. For too long, PBMs have negotiated prescription prices on behalf of consumers and insurers yet operated with little regulatory oversight and minimal transparency,” said Delaware Insurance Commissioner Trinidad Navarro.

“This act will address these issues by requiring PBMs to be open and transparent about their practices by mandating that they be licensed by and examined regularly by the Department of Insurance. This is an important first step as we begin to look more closely at PBMs and prescription drug pricing on a state level. I am grateful to Rep. Bennett and Sen. Paradee for their leadership on this issue and I look forward to working with them on seeing this through.”

At least 20 states require PBMs to be registered within a state agency. HB 194 was assigned to the House Economic Development, Banking, Insurance & Commerce Committee.

“So many of our constituents worry about how they will afford their prescriptions as it is. It is outrageous to think that anyone would have to also deal with fraud, clawbacks, or any other unfair practices along the way,” said Sen. Trey Paradee, D-Dover.

“This bill is built on a pretty simple premise – allowing pharmacy benefits managers to operate in an opaque, unregulated part of the prescription process is needlessly risky and leads to patients getting cheated. We already have an Insurance Commissioner who is willing and able to step in on behalf of consumers, and I’m proud to work with Rep. Bennett to make that happen.”

 

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