ALEXANDRIA, Va., May 7 /PRNewswire-USNewswire/ -- The Iowa General Assembly has unanimously passed legislation that would force pharmacy benefit managers (PBMs), the largely unregulated corporations that administer the prescription drug benefit portion of health insurance plans for employers and unions, to end their deceptive business practices and provide better safeguards for patients. A growing number of states are enacting PBM bills, such as S.F.512 in Iowa, to require these drug middlemen to disclose certain business practices that have been the subject of investigations and prosecutions. PBMs influence 80 percent of drug coverage in the United States, which is why states such as Iowa are taking steps to bring transparency to the business practices of these corporations. PBMs receive billions of dollars in rebates from drug manufacturers in return for dispensing higher-cost brand-name drugs. The majority of those rebate savings are not passed along to their clients -- such as private health plans and the Medicare Part D program. PBMs also limit patient treatment options by offering shrinking and shifting formularies, or lists of drugs that are covered for specific groups in a health insurance plan, and by requiring burdensome pre-authorizations in order to obtain refills or formulary- restricted medications. These bureaucratic policies discourage patients from obtaining their medications. "The National Community Pharmacists Association wants to see statutes that protect both the employers who provide drug benefits for employees and retirees, and the consumers who pay the premiums," said NCPA Executive Vice President and CEO Bruce Roberts, RPh. "The PBM reform bill passed by the Iowa General Assembly contains much-needed provisions that provide for the type of transparency and accountability that PBMs owe their customers and the public as a whole." "Everyone in the drug delivery system is highly regulated and scrutinized, except for pharmacy benefits managers. Given the history of investigations, litigation, and prosecution of the giant PBMs; consumers and policy makers should be asking why PBMs alone should be exempt from government oversight," said Roberts. "If PBM's expect to participate in public and private prescription drug plans, they owe a fiduciary responsibility to patients and taxpayers -- not just to their shareholders. The General Assembly's legislation requires PBMs to be certified as a third-party administrator and to disclose any conflict of interest issues. It also prohibits PBMs from substituting a medication unless it is made for medical reasons that benefit the beneficiary or result in financial savings to the employer. The legislation gives the Insurance Commissioner the ability to adopt rules regarding timely payment of pharmacy claims and establish an adjudication process for complaints and disputes between PBMs and pharmacies. After those initial regulatory steps are undertaken, an interim study commission will be created to assess additional disclosure, auditing, and enforcement issues. "Iowa's new PBM regulation law offers essential protections for pharmacies, payers of health care benefits, and most importantly consumers," said Thomas Temple, executive vice president and CEO of the Iowa Pharmacy Association. "In particular, the new law provides for needed regulatory oversight of PBMs by the Insurance Commissioner's Office, standards of fairness in PBM-pharmacy contracting practices, and safeguards for consumers relative to drug substitution activity." Temple added, "The new law also will establish a process for resolving disputes between PBMs and pharmacies and creates an Interim Legislative Study Committee to address issues related to PBM transparency. The PBM regulation bill-a major legislative priority of the Iowa Pharmacy Association-received support and endorsement from the Iowa Attorney General, organized labor, the Iowa League of Cities, the Health Buyers Alliance of Iowa, and several corporate employer groups." The bill is currently awaiting a signature from Gov. Chet Culver. The National Community Pharmacists Association, founded in 1898, represents the nation's community pharmacists, including the owners of more than 24,000 pharmacies. The nation's independent pharmacies, independent pharmacy franchises, and independent chains dispense nearly half of the nation's retail prescription medicines.
SOURCE National Community Pharmacists Association