The Problem
Many PBMs adopt a series of discriminatory arrangements to favor certain pharmacies over others, either because the PBM owns and operates their own mail-order pharmacy or because the PBM has favorable contract terms with certain pharmacies. As a result, PBMs have been known to steer patients towards their own mail-order pharmacies by refusing to deal with independent pharmacies, reimbursing independent pharmacies at a lower rate, or otherwise erecting barriers to using other pharmacies with a patient’s insurance.
The Solution
States can adopt laws to require that PBMs honor fair contractual terms with “any willing pharmacy” that meets the requirements of a patient’s healthcare plan. These provisions will bar PBMs from cutting other pharmacies out of an insurance plan’s coverage or otherwise providing unfairly favorable terms to certain pharmacies, ensuring that patients are able to use their preferred pharmacy.
Model Legislation
N.J. Stat. § 17:48-6j, a 2017 New Jersey law, requires that pharmacy benefit managers and distributors sell to “any willing pharmacy” that meets the requirements of a health insurance plan. This means that PBMs can’t do business exclusively to pharmacies they either own or have discriminatory contractual relationships with.[1]
Notes
[1] N.J. Stat. § 17:48-6j, https://codes.findlaw.com/nj/title-17-corporations-and-institutions-for-finance-and-insurance/nj-st-sect-17-48-6j.html.