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DeSantis announces plan to crack down on pharmacy benefit managers

DeSantis speaking at a podium with the sign: Lower Drug Prices
Gov. Ron DeSantis
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Calling for “long overdue reforms,” Gov. Ron DeSantis outlined proposed legislation that would target pharmacy benefit managers to try to lower prescription-drug costs on Jan. 12, 2023.

Gov. Ron DeSantis outlined proposed legislation that would target the health care "middlemen" to try to lower prescription costs. He said his plan will increase transparency and help small drug stores.

Florida Gov. Ron DeSantis is proposing legislation to crack down on pharmacy benefit managers, also known as PBM's.

“What we’re going to be doing is we’re going to protect consumers and increase accountability,” DeSantis said during an appearance Thursday in The Villages.

PBMs are the pharmaceutical middlemen, the companies that administer insurers' drug plans, negotiate discounts and rebates from drugmakers, and work with pharmacies.
DeSantis said his plan will increase transparency and help small drugstores.

Florida lawmakers have repeatedly considered proposals to place more regulations on PBMs, at least in part because of complaints by the small pharmacies. Lawmakers passed relatively modest changes, but DeSantis indicated he will make the issue a priority during the 2023 legislative session, which will start in March.

Among other things, the proposal would bar prescription benefit managers from forcing consumers to use mail programs for prescription drugs.

“What we're going to say is, ‘You’re free to use the mail-in pharmacy that they're telling you to use, but you do not have to use that,” DeSantis said. “You have the ability to make your own decision if it's best for you.'”

Prescription benefit managers will also have to provide more information when registering with the state, including any pharmacies they're affiliated with and any other companies under their umbrella, DeSantis said. In addition, drug manufacturers would need to issue a report each year justifying price increases.

DeSantis also wants to end surprise billing and "clawbacks."

"Over the Christmas holiday, you know," he told the crowd of about 150 mostly senior citizens, "I have some kids that are under the weather. The first lady was a little under the weather. So she sends me out to fill a prescription. So I go. And this guy is telling me these PBMs are killing his business. And I'm like, 'We're gonna do something about it. Don't worry.' "

A Publix representative was at the event to speak in favor of DeSantis' plan.

"We feel that this is a critical first step to ensure that Floridians have access to their medications at the lowest price possible and at the pharmacy that they choose," said Katie Scanlon, senior director of pharmacy administration at Publix.

The PBM trade association opposed a similar bipartisan federal bill - the Pharmacy Benefit Manager Transparency Act - in June. The Pharmaceutical Care Management Association called it "anti-competitive and harmful to patients" and said that PBMs reduce drug costs.

Lawmakers during the 2022 session passed a measure (HB 357) that sought to increase oversight of PBMs, in part by giving the state Office of Insurance Regulation more authority over the companies.

As an example, PBMs in the past were required to register with the state, but the Office of Insurance Regulation did not have power to enforce the registration requirement. The bill allowed the Office of Insurance Regulation to fine PBMs for violations of the requirement.

The announcement came amid a series of efforts in Florida and nationally that supporters say will lower prescription drug prices. Congress and President Joe Biden, for example, passed measures last year that will allow Medicare to negotiate lower drug prices and capped insulin costs for Medicare beneficiaries.

Also, DeSantis and state lawmakers in 2019 approved a plan to import cheaper prescription drugs from Canada for government programs such as Medicaid, prisons and facilities run by the Department of Children and Families. The U.S. Food and Drug Administration, however, has not signed off on the program, drawing criticism and a lawsuit from the state.

DeSantis in July also issued an executive order that, in part, required audits of PBMs that provide services in the state’s Medicaid managed-care program and the state-employee health insurance program.

The executive order also required state agencies to put certain stipulations in new, renewed or extended contracts that involve pharmacy benefit managers. For instance, one of those stipulations would prevent clawbacks.

Information from the Associated Press and News Service of Florida was used in this report.

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