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A sweeping package to reform how pharmacy benefit managers operate in Illinois was signed into law Tuesday by Gov. JB Pritzker.
Provisions in the proposal include a ban on spread pricing, or the practice of PBMs charging more to a health plan than they pay to a pharmacy for a drug, as well as a ban on “steering consumers” to larger pharmacies.
It also establishes a user fee of $15 per PBM user. The first $25 million collected will be used for a grant program to support community pharmacies in rural and underserved communities, as well as those with high Medicaid populations.
Per the state spending plan, any additional funds generated will go to the general revenue fund.
Another provision requires PBMs to submit annual audit reports to the Department of Insurance. The agency will also perform a market conduct examination every five years on the top three pharmacy benefit managers.
It also establishes a standard definition of specialty drugs, which supporters said will prevent PBMs from limiting an individual’s access to a drug from a pharmacy.
Another provision requires PBMs to return 100 percent of pharmacy rebates to individuals or sponsoring organizations. And it increases fines on PBMs for violations from $1,000 per day to $10,000 per day.
Pritzker, who made PBM reform a legislative priority this spring, said during the bill signing at OSF HealthCare in Peoria that “for too long, our healthcare system has been infected by profit-seeking middlemen and predatory actors looking to make an extra dime at the expense of Illinois patients.”
“Family businesses like independent pharmacies have had to shut their doors,” he said. “Today, affordability is our watchword for the state of Illinois.”
Pharmaceutical Care Management Association, the trade group that represents PBMs, said they are disappointed by the “misguided” law. Along with new fees that’ll raise healthcare costs, they said the law removes choices for employers that provide health benefits by dictating how they can contract with their PMBs.
“Unfortunately, the legislation does nothing to address the fact that Big Pharma sets the price of the prescription drugs — and the price is the problem when it comes to some Illinoisans facing difficulty affording their prescription drugs,” they said.
Garth Reynolds, executive director of the Illinois Pharmacists Association, said the law is the culmination of years of work from stakeholders, but that more work is needed.
“We’ve got to continue to look at reimbursement parity,” he said. “We’ve got to continue to look at all the other ways that PBMs will not be compliant with this act, and hopefully the state will hold them to account quickly.”
Officials like Sen. Dave Koehler, D-Peoria, said Tuesday’s bill signing is the “end of the beginning” on the issue of PBMs.
However, Pritzker said they are not considering going as far as states like Arkansas, which passed legislation this year to ban PBMs from owning or operating pharmacies.
“Because of the transparency and accountability that’s built into this bill, we believe that (PBMs) can be regulated,” he said. |
