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Senate Co-Sponsorship Memoranda
Senate of Pennsylvania
Session of 2013 - 2014
Regular Session
MEMORANDUM
| Posted: | March 26, 2015 05:53 PM |
|---|---|
| From: | Senator Richard L. Alloway, II |
| To: | All Senate members |
| Subject: | Pharmacy Benefit Manager (PBM) Transparency Legislation |
| Please join me in co-sponsoring legislation I will be introducing in the near future, which would require PBMs to be more transparent to plan sponsors, patients, and pharmacies. PBMs provide a useful service in managing prescription drug benefits; however, sometimes their activities go beyond their original purpose. Frequently, plan sponsors (payers including insurance, companies, and government) may not be fully away of all the specifics of contract terms and may be paying more due to the lack of information. An example of this lack of transparency is when PBMs create a “spread” between the prices charged to the payer and the price reimbursed to the pharmacy, which is never disclosed to the payer. My legislation would establish some required practices, such as requiring PBMs to provide, upon request by the Department of Health or other covered entity, claims-related financial and utilization information, including the national drug code numbers used as submitted by the pharmacy for payment, the price paid to a pharmacy, and the price charged to a payer for the same, not including any separate administrative fee. PBMs also would be required to disclose rebates received from a pharmaceutical manufacturer, upon request. In addition, this legislation would prohibit certain conduct, including the prohibition of PBMs from mandating any consumer to use a specific retail pharmacy, mail-order pharmacy, or other pharmacy, if the PBM has an ownership interest in that pharmacy. PBMs also would be prohibited from requiring that a pharmacy participate in a network managed by the PBM as a condition to participate in another network managed by the same PBM. Lastly, as confidentiality of a patient’s personal healthcare information is very important, my legislation would require PBMs to notify a plan sponsor if they intend to sell utilization of claims data possessed by the PBM. Payers and patients would be given the opportunity to opt out of the sale of their data. |