PBM Bashing at the State Level

Fins to the left of me…… fins to the right….. and I’m the only PBM in town….(with apologies to Jimmy Buffet)

What we are really talkin’ about here is the ongoing attacks on PBMs now coming from the left… and the right…. politically speaking. Even conservative, right-wing politicians, as noted in the article below, are piling on the PBM bashing movement.

Specifically, Florida Gov. DeSantis is using his executive powers to require that state agencies impose new, rigorous policies managing contracts with PBMs. The aim is to correct onerous PBM practices that frequently generate unreasonable profits for the PBMs while shortchanging independent pharmacies.

The profit squeeze is easy to understand. The PBM jury riggs prescriptions to their owned pharmacies that are then reimbursed at maximum profit margins. By comparison, independent specialty pharmacies typically end up with less than 30% of available profit…. often as a result of clawback practices. This would be prohibited by the new executive orders along with other practices.

As we’ve been saying in the past several reports, the bull’s eyes on the backs of the PBMs seem to be growing larger by the month.

DeSantis issues executive order in attempt to lower prescription drug costs

by Caden DeLisa | Jul 8, 2022

Gov. Ron DeSantis issued an executive order that aims to lower prescription medicine costs for Floridians

The order directs state agencies to amend contracts with Pharmacy Benefits Managers

Prior studies indicate that health care companies utilizing Pharmacy Benefit Managers tend to pocket more money

Gov. Ron DeSantis issued an Executive Order today aimed at increasing transparency in prescription costs for Floridians. The order ensures changes to keep Pharmacy Benefits Managers (PBMs) accountable when administering prescription drug benefits for insurance companies are implemented.

The executive order directs all executive agencies to include provisions in all future contracts and solicitations with PBMs including the prohibition of spread pricing for all PBMs, the prohibition of reimbursement clawbacks, instructions for all state agencies to include data transparency and reporting requirements, including a review of all rebates, payments, and relationships between pharmacies, insurers, and manufacturers, and directs all impacted agencies to amend all contracts to match the new requirements.

“Florida continues to lead the nation in ensuring accountability in the health care industry and in introducing reforms to combat rising prescriptions costs,” said DeSantis. “This executive order requires accountability and transparency for pharmaceutical middlemen when doing business with the state, thereby reducing the upward pressure on prescription drug costs.”

A 2020 Florida study found that major health care companies using PBMs positioned themselves to pocket millions of dollars from the state’s Medicaid system that 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 health care 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. These organizations use their leverage and contracts with the state to squeeze dollars from their competitors by requiring patients to go to pharmacies where they have a financial interest.

This process frequently involves rewarding their own pharmacy operations with significantly higher reimbursement rates from Medicaid, according to the study. The study provided an example of this situation where Sunshine Health directed 95 percent of all claims for generic cancer drug Gleevac to Acaria, its wholly-owned specialty pharmacy. It reimbursed this specialty pharmacy an average of $4,399 above the national average cost for the drug.

“For far too long leaders have chosen the path of inaction, rather than action, and fallen victim to a pharmaceutical system driven by drug companies rather than consumers,” said Agency for Health Care Administration Secretary Simone Marstiller. “Fortunately, Governor DeSantis leads with principle, always putting Floridians first and today’s actions will further this commitment by providing insight into the FDA’s review process and all agency health care contracts through the end of the decade.”

Florida has previously taken steps to reduce drug costs for residents, but the federal government has yet to take action on the proposal. According to DeSantis, the FDA has been reviewing the state’s Canadian Prescription Drug Importation program for approximately 600 days.

In response to the federal government’s inaction, DeSantis granted AHCA officials the power to negotiate pricing for pharmaceuticals that are not eligible for importation, such as insulin and epinephrine.



Read More

Limited Distribution Deals Announced

Announcements for newly approved specialty drugs often state that the product will be available through specialty pharmacy in limited distribution. However, the press releases rarely

Send Us A Message

This website uses cookies to ensure you get the best experience on our website.