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Pearson’s bill to address unregulated Pharmacy Benefit Managers receives public hearing

With the cost of health insurance increasing year after year, Rep. Kirk Pearson introduced legislation he believes will lower prescription drug costs and ensure locally-owned pharmacies can keep their doors open. House Bill 2303, which would create greater transparency for Pharmacy Benefit Managers (PBM), received a hearing Jan. 25 in the House Health Care and Wellness Committee.

"As with most issues surrounding our health care system, PBMs are complicated," Pearson explained.

By way of background, PBMs are middlemen that design, negotiate and manage prescription drug benefits for a variety of health insurance plans. The bulk of income PBMs generate is derived from pharmaceutical manufacturers that provide rebates and discounts to PBMs as a type of reward system for promoting their brand-name drugs to drive usage in health insurance plans. This creates a system where the consumer is forced to purchase more costly brand-name drugs, which benefits PBMs financially.

"I normally don't wade into health care issues, but because several local pharmacists brought the issue to my attention, I began to look into it further. My concern is two-fold. First, are consumers getting the best deal possible on their prescription drugs, and second these middlemen in our health care system are the only group that is unregulated," said Pearson, R-Monroe. "I'm not asking that we dismantle the entire system, but consumers need to know their interests are being looked after."

Pearson is also concerned PBMs are taking the personal connection out of the pharmacist-patient relationship and adding to job losses in the community.

"There are some instances where these benefit managers contract with local pharmacies to provide services, but the payments made to the pharmacy are significantly lower than the cost of the service," Pearson said. "In addition, PBMs mandate mail-order prescriptions for many patients, which is hurting our local pharmacies. Not only do those pharmacies serve a vital community service, the pharmacists are often times the people who can tell if a patient is having trouble with a medication, spots a dosage issue or a deadly drug combination. This is critical for patients, particularly those who are taking medications for complex health conditions."

The Federal Trade Commission is currently looking at PBM operations and a possible merger of two of only three PBM mail-order drug companies.

"Some big drug manufacturers object to my bill because they claim it would reveal their 'trade secrets' to the rest of the industry," Pearson added. "The fact is, this is truly a simple transparency bill that would give consumers more information to make good financial choices with their health care options. There's nothing controversial in the bill and more than twenty other states have put in place the same, or even stricter, oversight of PBMs into law."

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