On Sept. 20, Gov. Roy Cooper signed legislation that will impose tighter regulations on pharmacy benefit managers and protect local pharmacies and consumers from extra or unknown pharmaceutical fees.
Senate Bill 257 — entitled the Medication Cost Transparency Act — is set to take effect Oct. 1.
“In the pharmaceutical world, there is a middle man between the insurance company and the patient called a pharmacy benefit manager — a PBM,” said State Sen. Jim Perry, R- Lenoir, Wayne.
Perry said pharmacy benefit managers control something called a formulary — a list of specific drugs on someone's insurance plan. With this control, PBMs are able to take advantage of local pharmacies.
“There is a real big issue called spread pricing," Perry said. "This is where the PBMs negotiate with the insurance companies to pay, say $10, and then when it comes to the pharmacy to dispense it, they will only pay the pharmacist $5 and then keep that spread."
Under the new law, PBMs must now apply and obtain a license from the Commissioner of the Department of Insurance, who now has more authority and a greater ability to regulate spread pricing.
Pharmacy benefit managers are required to pay an initial application fee of $2,000 and annual renewal fees of $1,500 to maintain this license. In addition, they can no longer prevent pharmacies from allocating a certain drug.
Additionally, the legislation allows the Commissioner of the Department of Insurance to petition a court order at any time to request that PBMs pay restitution to pharmacies if they violate the order.
“PBMs are hammering local pharmacists,” Perry said. “In many instances, they were reimbursing the pharmacist less than what the pharmacist paid for the drug.”