Magazine article Drug Topics

Managed Care Groups Upset over Bill to Regulate PBMs

Magazine article Drug Topics

Managed Care Groups Upset over Bill to Regulate PBMs

Article excerpt

A bill to usher in new rules for pharmacy benefit managers, now in the final stages of becoming law in Georgia, has given new hope to other states poised to introduce or pass similar legislation.

Once signed by Gov. Roy Barnes, this landmark legislation, known as H.B. 585, will make Georgia the first state to license and regulate PBMs. A similar drive is under way in Alabama, Illinois, Iowa, Maryland, and Missouri, where attempts to clip the wings of PBMs have been ongoing for some time.

If the Georgia bill passes, it would give the state pharmacy board a predominant role in regulating PBMs, according to Oren J. (Buddy) Harden Jr., executive vp. of the Georgia Pharmacy Association. In fact, he said, the new law basically levels the playing field for Georgia's pharmacists, who have long been subject to rules that have not been applied to PBMs.

"There were two standards in force in that PBMs were being allowed to perform functions such as medication management without licensure or oversight, while pharmacists were required to be licensed and to comply with certain laws," explained Harden. The bill in fact spells out that every PBM or managed care company providing services in Georgia that constitute the practice of pharmacy must now be licensed to practice as a pharmacy in the state and must comply with the provisions of these regulations.

The clear intent, according to Harden, is not to stop these companies from performing these acts but to ensure that they do so in compliance with the laws of Georgia. As a condition for licensure, PBMs must now allow inspection of their premises by agents of the board, regardless of location in or out of state.

For PBM companies none of this is good news. In fact, LaVarne Burton, president of the Pharmaceutical Care Management Association, which represents PBMs, contends that there is already sufficient oversight both at the state and federal levels. She thinks additional regulations could lead to duplication and contradictory rules. In the end, she said, this makes the system more inefficient and costly for the ultimate payer, the consumer.

Another argument PCMA has made is that the bill contains some legal flaws, so it should not be passed. The organization has hired a lobbyist to try to talk the governor into vetoing the measure. The association believes it has a 50-50 chance of derailing the legislation. …

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