Lawmakers are considering a bill that would require pharmacy benefit managers to be more transparent in contracting with the Public Employee Insurance Agency.
The primary aim of Senate Bill 453 is to ensure transparency from pharmacy benefit managers contracting with PEIA, specifically regarding pricing and payments for drugs and to pharmacies.
By imposing reporting requirements and contractual guarantees, the bill aims to enhance accountability and fairness in pharmaceutical transactions, ultimately benefiting the healthcare consumers covered by PEIA. The bill is set to undergo further consideration in the Committee on Health and Human Resources.
Pharmacy benefit managers (PBMs) are companies that act as third-party administrators of prescription drug programs for commercial health plans, self-insured employer plans, Medicare Part D plans, the Federal Employees Health Benefits Program, and state government employee plans like the Public Employees Insurance Agency.
PBMs often face criticism for how they reimburse pharmacies for prescriptions, including a lack of transparency in sharing data.
Leading up to this year’s legislative session, lawmakers heard testimony repeatedly in interim committee meetings from individuals and organizations representing the state’s pharmacies who testified that smaller pharmacies are suffering, even to the point of closure, because of poor reimbursement rates from the state’s pharmacy benefit manager.
What the bill would require
Senate Bill 453 would mandate that any PBM entering into a contract with PEIA provide comprehensive transparency in sharing data related to pricing and payments for drugs and to pharmacies.
Under the proposed legislation, PBMs would be required to submit quarterly reports to PEIA, detailing:
Total amount charged for all claims processed
Reimbursements paid to pharmacy providers
Details of claims where reimbursement differs from the amount charged
Comprehensive information on pharmacy claims, including costs, dispensing fees and related details
All data provided by PBMs would be required to be kept secure and confidential. PEIA would be obligated to maintain the confidentiality of proprietary information, and only designated agency employees would have access to such data.
The PEIA would be required to contract with networks to provide care for out-of-state members. Additionally, requests for proposals and contracts with PBMs would be required to include guarantees based on the total pharmacy program cost, with an at-risk administrative fee model if guarantees are not met.
Also under the bill, PBMs would be required to use a national average drug acquisition cost-based pricing source for charging PEIA and reimbursement source for reimbursing pharmacies, and 100% of drug manufacturer rebates would be passed to PEIA.
Additionally, PBMs must offer network participation to all licensed West Virginia pharmacies and specialty drugs must be dispensed or administered by a West Virginia pharmacy.
Finally, the bill mandates that PEIA issue a request for proposal for PBM services, effective July 1, 2025, and at least every three years thereafter.
The bill is currently pending review by the Senate Health and Human Resources Committee.
Roger Adkins covers politics. He can be reached at 304-348-4814 or email radkins@hdmediallc.com. Follow @RadkinsWV on Twitter.
