PBM Transparency Legislation? How's Bayou?

  • by: Peter Pitts |
  • 05/18/2018
Louisiana is leading the nation in smart drug pricing transparency legislation. Last year, as in many other states, the issue was pharmaceutical manufacturer pricing. But many have learned that, by focusing on just one part of the ecosystem, partial transparency results in unhelpful opaqueness.
Bravo to the Bayou State for understanding that real pricing transparency requires real transparency by all concerned. Consider two pieces of legislation that just passed both houses of the Louisiana legislature by unanimous votes:

Senate Bill 283 calls for PBMs to make their rebate data (in aggregate form) available on a public website. Bill 283 requires that pharmacy benefit managers  “provide for internet publication of formularies; to provide for transparency reporting; to provide for certain reportable aggregate data; to provide for internet publication of the transparency report; to provide for definitions; to provide for the duties of the commissioner of insurance relative thereto; to provide for confidentiality; and to provide for related matters.”

Translation – show us the money.

The second piece of legislation, Senate Bill 282, requires PBM reporting of “Excess Consumer Cost Burden.” According the bill, this means “an amount charged to an enrollee for a covered prescription drug that is greater than the amount that an enrollee’s health insurance issuer pays, or would pay absent the enrollee cost sharing, after accounting for rebates, or where an enrollee is subject to a paid for as medical care under any hospital or medical service policy or certificate, hospital or medical service plan contract, preferred provider organization, or health insurance organization offered by a health insurance issuer.”

In other words – show us the money – and how it impacts the price patients’ pay at the pharmacy.

As more legislators recognize the value of ecosystem transparency, these two pieces of legislation are likely models of what other states will propose. This is also in keeping with Secretary Azar’s call for PBMs to pass along 30% of their rebates to Medicare and Medicaid patients in the form of lower co-pays, deductibles, and co-insurance. No one understands better than the people of Louisiana that it’s “the price at the pump” that matters most to the average Joe.

To paraphrase the Kingfish, former Louisiana Governor Huey Long, PBMs are going to get real transparency - and they aren't going to like it.

Center for Medicine in the Public Interest is a nonprofit, non-partisan organization promoting innovative solutions that advance medical progress, reduce health disparities, extend life and make health care more affordable, preventive and patient-centered. CMPI also provides the public, policymakers and the media a reliable source of independent scientific analysis on issues ranging from personalized medicine, food and drug safety, health care reform and comparative effectiveness.

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