Coalition asks lawmakers to scrap pharmacy benefit manager bill

Lawmakers should scrap a bipartisan bill increasing transparency and oversight of middlemen between pharmacists, insurance companies and drugmakers, a coalition of healthcare groups said Monday.

But bill author Rep. Michael Schraa, R-Oshkosh, said that regulation around pharmacy benefit managers is needed as the industry has “gotten way out of control.”

“Bottom line is we’re going to get this bill passed,” he said. “They are going to be regulated and there’s going to be transparency. I’m not going to stop until it actually happens.”

The bill would require pharmacy benefit managers to register with the state’s insurance department. They would have to submit an annual report identifying the rebates they receive from drug makers and the percentage they retained.

The bill also bars contracts from having gag clauses that ban pharmacists from informing patients of lower cost options. Under the proposal, pharmacy benefit managers couldn’t charge a copay greater than the amount charged by a pharmacy for patients not using insurance.

The coalition of 25 groups, which include pharmacy benefit managers, health plans, health systems, as well as statewide and regional chambers of commerce, asked lawmakers to “set aside” the bill and work with “all stakeholders.”

“The PBM bill puts government directly in the middle of private contracting, and will increase costs by imposing onerous and unnecessary government rules,” they wrote. “The bill creates duplicative regulations, and even establishes rules that directly conflict with federal law and government programs.”

The bill would limit competition between pharmacies and increase costs by “undercutting” health plans’ and pharmacy benefit managers’ ability to negotiate for better discounts, they wrote. They also noted that federal legislation passed last year bans gag clauses in contracts.

Schraa disputed the letter, saying the proposal would lower drug costs in the long run and that pharmacy benefit managers are hurting independent pharmacies. He said lawmakers have asked the coalition’s members how they can improve the bill and hope to still work with the industry.

“It’s just unfortunate that they’re blatantly trying to mislead my colleagues,” he said.

Schraa said the coalition opposes the bill because they “benefit by keeping the status quo.” He noted that the bill has more than 90 legislative co-sponsors.

Danielle Womack, vice president of public affairs at the Pharmacy Society of Wisconsin, said similar legislation has passed in more than 30 states.

She said the proposal “will provide transparency and accountability to the practices of pharmacy benefit managers and will ensure patients have access to pharmacies they choose to use.”

“We look forward to continuing to work with the groups that have expressed concerns about the legislation to create the strongest bill possible for our patients,” she said in a statement.

This article first appeared in the Wisconsin Health News daily email newsletter. Sign up for your free trial here.