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New Legislation Addresses Unfair and Deceptive Pharmacy Benefit Manager (PBM) and Insurer Practices

posted: March 20, 2020

In order to reduce drug costs and improve patient access to treatment, OAR believes increased transparency and appropriate oversight of how PBMs operate in Ohio should be of high priority for lawmakers.

House Bill 396 was introduced which sets forth requirements for all PBMs to submit aggregate data on a quarterly basis to the Department of Insurance (DOI). Provisions in the bill require PBMs to report the amount of rebates received by the PBM from the manufacturer, the amount of rebates distributed to health plans, and the amount of rebates passed on to beneficiaries of each health plan that reduced the cost of their prescription drug at the point of sale. The current rebate system allows for pharmacy benefit managers (PBMs) to reap profits on the backs of health plans and patients. OAR applauds the sponsor, Representative Tavia Galonski (D-35), for introducing this legislation.

Currently, HB 396 has had one hearing in the House Health Committee. OAR submitted letters of support and will continue to monitor the bill as it moves through the legislature.

In January, House Bill 469, a bill seeking to ban co-pay accumulator programs was introduced and assigned to the House Health Committee. The legislation addresses the PBM and insurance industry practice of not counting copay assistance toward a patient’s deductible or out-of-pocket cost. Under the provisions in the bill, insurers would be required to apply all payments made by the patient or on the patient’s behalf through an assistance program, to be applied to their cost-sharing obligation.

In 2019, four states passed accumulator adjustment reform legislation: Arizona, Illinois, Virginia and West Virginia. In addition to Ohio, Florida, Georgia, Kentucky, New York, Pennsylvania, and Oklahoma have introduced legislation in 2020 to combat this discriminatory practice. Representatives Susan Manchester (R-84) and Thomas West (D-49) are the bills’ sponsors and OAR looks forward to working with the coalition that has been formed to reform this unfair PBM and insurer practice.