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
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
After those initial regulatory steps are undertaken, an interim study
commission will be created to assess additional disclosure, auditing, and
"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