Regulatory Spotlight: The Practices of Pharmacy Benefit Managers

The practices of Pharmacy Benefit Managers (PBMs), the third-party administrators of prescription drug coverage for insurers and employers (with an estimated value of $386.3 billion in 2018), have come into focus in recent years. More specifically, the often invisible contractual clauses within the agreements between the pharmacy and PBMs such as ‘gag clauses’ and ‘co-pay clawbacks’ have come to light. State and Federal lawmakers have taken notice and are passing legislation to begin curtailing these practices. In 2018, two Federal bills were signed into law both addressing ‘gag clauses.’The Federal “Patient Right to Know Drug Prices Act” prohibits insurers and PBMs from restricting pharmacies from providing drug price information to customers even when the cash price is less2. The “Know the Lowest Price Act” provides the same protection for individuals covered by Medicare Advantage and Part D plans. Additionally, 33 states have enacted laws prohibiting ‘gag clauses.’ While there is no Federal law prohibiting PBM ‘clawbacks,’ efforts to address the practice are underway at the state level. As of May 2019, at least 20 states have enacted ‘anti co-pay clawback’ provisions. Several more states have pending legislation to address both the aforementioned provisions.ScriptPro’s Regulatory team reviews a wide range of regulatory issues throughout the pharmacy landscape, including matters related to PBMs such as ‘gag clauses’ and ‘clawbacks.’ While legislators are beginning to act, there are still many moving parts in this complex environment and navigating it requires consideration and optimized tools. More on PBMs and how ScriptPro can help:

https://secure.pancan.org/site/TR/PurpleStride/PurpleStride?fr_id=1951&pg=entry

‍https://www.grandviewresearch.com/industry-analysis/us-pharmacy-benefit-management-pbm-market

‍https://www.pharmacytimes.com/conferences/ncpa-2018/lawmakers-unanimously-approve-bills-to-prohibit-gag-clauses-for-pharmacists