House leaders act to rein in PBMs
GOP to introduce legislation to bring transparency to prescription drug pricing, increase PBM and Medicaid CMO oversight, and carve prescription drug benefits Medicaid CMOs
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The story has been picked up by local press:
And you can view a video of the hearing itself by clicking here.
In a rare pre-session hearing, leaders of the Georgia House of Representatives heard from pharmacists, physicians, and patients about how PBMs are flaunting Georgia law, hurting patient care, and driving smaller pharmacies out of business.
The issue
In 2019, Georgia passed HB 233, which prohibited most PBM “steering” of patients to their own pharmacies. Unfortunately, PBMs chose to ignore the law, requiring, for example, that patients use the mail-order pharmacies that the PBMs themselves own.
How can they do that? In other states, PBMs have claimed that they are not subject to state laws — that only the federal government has the right to regulate them.
Patients complained to their pharmacists and physicians. Pharmacists — led by GPhA — and physicians went to their legislators. And legislators decided to act.
What just happened
On January 7, a week before the opening of the 2020 legislative session, the Georgia House convened a Joint Special Committee on Access to Health Care and Insurance. It heard testimony from pharmacists, physicians, and their patients how the PBMs and Medicaid managed care organizations “rig the system” and end up hurting patient care.
GPhA members Nikki Bryant (owner of Adams Family Pharmacy in Preston) and Jennifer Shannon (owner of Lily’s Pharmacy in Johns Creek) were among those who testified.
“They don’t care about patients nor do they care about improving their disease states,” Shannon said about PBMs. “This local pharmacist does.”
Bryant lashed out at Medicaid MCOs: “Government contracts in this state that my taxpayer dollars are going to,” she said, “are working to put me out of business.”
What comes next
Immediately after the hearing, the House GOP — led by Georgia Representative David Knight — announced its intention to introduce legislation that Knight said (via a press release) would tackle those issues head on and “Reverse Corporate Takeover of Georgia Healthcare.”
Building on HB 233, this new legislation, Knight said, will “bring true transparency to the prescription drug market; while at the same time closing loopholes in existing laws that MCOs, PBMs, and even state-contracted PBMs use to continue to engage in practices that harm patients.”
Notably, the soon-to-be introduced bill will look to carve out prescription drug benefits from Medicaid managed care. In other words, it would pay Medicaid managed care organizations separately for prescription-drug benefits, allowing the state to better monitor and regulate the spending. (Knight pointed out that West Virginia implemented such a plan “and an actuarial study showed that the carve out saved over $50 million dollars while at the same time paying community pharmacies fairly.”)
The bill would also increase state oversight of both PBMs and the Medicaid managed-care organizations that contract and subcontract with the state.
Obviously it’s too soon to know the full details, but GPhA will have a close eye on what happens and will be keeping you informed. In the meantime, if you haven’t already, please visit the announcement on the Georgia House of Representatives’ Facebook page and add your name to the “Likes.” And share the news and press release wherever you can.
The 2020 General Assembly session opens next Monday, January 13.
