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Pharmacists on Track to Win Better Protection from PBM Abuses

House Bill 2388 will strengthen the existing regulation of pharmacy benefit managers by giving the Department of Consumer & Business Services the ability to investigate complaints and cancel a company’s registration if the PBM commits fraud or fails to pay civil penalties.
February 17, 2017

Pharmacists appear poised to add significant teeth to the state law regulating pharmacy benefit managers, persuading the Legislature to make the first changes to the law since it was enacted in 2013.

“(House Bill) 2388 will clearly determine the enforcement ability of the Insurance Division over PBMs, giving them the same powers and flexibility to investigate complaints and bad practices that they have over all the other entities they have in their purview,” said Niki Terzieff, a lobbyist for the Oregon State Pharmacy Association.

Anne Murray, a pharmacy owner with stores in Heppner and Condon in eastern Oregon, said she has continued to have trouble with fair payment from PBMs, losing up to $70 on a prescription of common drugs like a generic for Tamiflu.

As Rep. Rob Nosse, D-Portland, the chief proponent of HB 2388, explained, PBMs began as third-party administrators to help health insurance companies handle the thousands of pharmacies and millions of prescriptions that an insurer would otherwise have to handle by itself. But the companies have grown in size and influence to become some of the largest and most lucrative for-profit corporations in the healthcare industry.

“With that growth and influence, there should be a clearer regulatory framework that provides a regulatory vehicle for pharmacists and pharmacies if there are problems,” Nosse testified before the House Health Committee on Wednesday.

Nosse said he had an amendment to HB 2388 that he felt all sides could live with, giving the Department of Consumer & Business Services the authority to oversee complaints with PBMs, and charging fees to the companies that will cover the cost of the regulators’ salaries. “This kind of regulation does not seem unreasonable to me, and they are regulations that insurance companies or really any company has to abide by when they operate in the health insurance space of our state’s economy.”

Terzieff said the state has lost a few more of its local pharmacies in the past four years, and those that remain are still being hit with excessive audits over technical and administrative discrepancies.

Lobbyists for the pharmacy benefit managers sounded amenable to the legislation outlined in HB 2388, which avoids creating new controls over the reimbursements that pharmacy benefit managers must make to pharmacists -- a request that pharmacists made the past two years in bills that failed to pass out of a committee.

“DCBS should have regulatory and enforcement authority,” said Kelsey Wilson, the lobbyist for the Pharmaceutical Care Management Association, a trade group representing PBMs. The Department of Consumer & Business Services oversees the state Insurance Division, now known as the Division of Financial Regulation. “If there are bad actors, they need to follow the law.”

Nosse’s amendment outlines a litany of incidences when the state can pull a PBM’s registration and block it from doing business in Oregon, including evidence of fraud or the failure to pay civil penalties wagered against the company for violating the law.

Chris can be reached at [email protected].