PBM Reform Legislation Progresses in Michigan

A new legislation recently passed by the Michigan’s House of Representatives would require reforms to many pharmacy benefit manager (PBM) reimbursement practices in the state.

The bill passed the state’s House in a vote of 97-10. The bill had previously passed the Health Policy Committee, chaired by Rep. Bronna Kahle, in a vote of 18-1, and now heads to the Senate for consideration.

The Michigan Pharmacists Association and National Community Pharmacists Association (NCPA) lauded the House Bill (HB) 4348 in a joint statement. NCPA previously issued a letter in support of the bill. In the letter, Matthew Magner, JD, director of state government affairs, wrote that the legislation would offer “greater protections for patients regarding their prescription drug benefits programs and establish greater oversight of the [PBMs] that administer those benefits.”

The provisions listed in HB 4348 would prohibit PBMs from reimbursing pharmacies affiliated with the PBM more than non-affiliate pharmacies; prohibit patient steering to PBM-owned pharmacies; prohibit retroactive clawbacks; require reimbursement be based on the National Average Drug Acquisition Cost; and establish fair audit procedures for community pharmacies.

“HB 4348 would put a stop to some of those opaque practices that are threatening patient access to community pharmacies services and raising costs for patients and plan sponsors,” Magner wrote in the letter.

Magner noted that these reforms would lead to lower out-of-pocket costs for patients and address a lack of pharmacy reimbursement transparency. In addition to helping pharmacies, the provision would also save plan sponsors costs by prohibiting “spread pricing.”

“The majority of states have laws on the book to curb drug costs by regulating PBMs, whether by outlawing patient steering, requiring the PBM to be licensed by the state, banning gag clauses or through other reforms,” Anne Cassity, NCPA vice president of federal and state government affairs, said in a statement. “Independent neighborhood pharmacies and their patients are eager to see Michigan implement PBM regulations as well. We’re grateful to Reps. Calley and Kahle, to Speaker Wentworth, and to their colleagues for joining them in supporting this important legislation.”

References

1. PBM Reform Advancing in Michigan with House Passage of HB 4348. News release. National Community Pharmacists Association; March 24, 2021. Accessed March 26, 2021. https://ncpa.org/newsroom/news-releases/2021/03/24/pbm-reform-advancing-michigan-house-passage-hb-4348
2. Magner M. RE: National Community Pharmacists Association Support for HB 4348. March 10, 2021. Accessed March 26, 2021. https://ncpa.org/sites/default/files/2021-03/MI_HB4348MACAuditNetworkAdequacy.pdf