As states begin to address the heretofore unchecked practices of pharmacy benefit manager (PBMs) middlemen amidst a rash of publicity and legislation, Georgia has quietly introduced and passed legislation that could change the game for Georgia patients and serve as a model for other states looking to protect patient choice and access to care. This legislation - HB 233 by Rep. David Knight - awaits Governor Brian Kemp’s signature before passing into law May 12th.
While most state legislation, including HB 323 in Georgia, looks to rein in problematic PBM practices, Georgia’s HB 233 takes a new tact – regulating pharmacies that are owned/affiliated with PBMs and insurers through the elimination of patient steering practices.
HB 233 specifically prohibits pharmacies owned by PBMs and insurance affiliates from receiving self-dealing referrals and from engaging in data mining for commercial (non-patient care) purposes. The bill also requires pharmacies to disclose affiliates to the Board of Pharmacy and contemplates Georgia Board of Pharmacy oversight.
“Though often overshadowed by issues such as DIR fees and spread pricing, PBM-owned pharmacies have been able to engage in patient steering on the grandest of scales, to the point it has become a core business strategy,” says Georgia state representative David Knight. CVS says as much in a statement from CEO Larry Merlo in their 2017 Annual Report:
“Over time we have developed new plan designs that save our clients money while simultaneously moving share into our channels. For example, the new plan members we enrolled over the past three selling seasons will contribute an additional 40 million prescriptions to the enterprise in 2018.”
Frustratingly, PBMs often take the position that state law requiring regulation is preempted by federal law, thus limiting the scope and impact of many previously-passed state laws Yet pharmacies are subject to significant state regulation. What makes HB 233 unique -- and apparently gives PBMs pause -- is that it targets the very point at which PBMs ARE subject to state regulation - their pharmacies.
“It’s a simple yet brilliant strategy that may change the game and provide patients the broadest possible protections. For patients who have been forced into mail order or other PBM-owned pharmacies, there are few issues more important in healthcare than patient steering,” says Scott Newman, PUTT president. “Steering, whether into mail order or a PBM-owned brick-and-mortars impacts the most vulnerable patients. PUTT applauds the State of Georgia for recognizing the need to stop the practice all together.”
HB 233 had more than 90 co-sponsors and enjoyed near unanimous support. However, despite the grassroots support, the PBM lobby is currently exerting tremendous pressure in the hopes of getting a veto by May 12, which is the state deadline for Governor Kemp to veto 2019 legislation. In the meantime, the pharmacists and their patients wait, hopeful that patient mandates and steering will soon be a thing of the past.