Comparison of State Pharmacy Benefit Managers Laws
In 2018, 21 states passed 32 bills to shed light on the opaque business practices of pharmacy benefit managers (PBMs). States took varied approaches to curb prescription drug costs by regulating PBMs. The chart below details the PBM practices each state tackled, and how their approaches compare with NASHP’s PBM model legislation.
|State||Bill Number||Bans gag clauses that prevent pharmacists from sharing lower-cost options||Requires PBMs to be licensed by the state||Permits or mandates disclosure of a drug's out-of-pocket costs with and without insurance and availability of generic options||Limits patient cost-sharing||Prevents price spreading, when PBMs charge plans more than what a pharmacy is paid||Requires PBMs to report pricing and rebate information to promote transparency||Miscellaneous Provisions|
|NASHP||Model||✓||✓||✓||✓||This measure stipulates that a PBM has a fiduciary duty to a health carrier.|
|AR||SB 2||✓||✓||✓||✓||This measure prohibits PBMs from using untrue, deceptive or misleading solicitations or advertisements.|
|AR||HB 1010||✓||✓||✓||This measure prohibits PBMs from using untrue, deceptive or misleading solicitations or advertisements.|
|KY||SB 5||This measure requires the Department of Medicaid to directly administer all outpatient pharmacy benefits and prohibits pharmacy benefits in Medicaid managed care contracts.|
|NH||SB 481||This measure establishes a committee to study the impact of PBM operation costs, administration and distribution of prescription drugs.|
|NH||HB 1791||✓||This measure limits consumers' out-of-pocket drug costs to the lesser of: the cost-sharing requirement, the amount the insurer or PBM will reimburse the pharmacy for the drug, or cash price.|
|SC||HB 5038||✓||✓||This measure prohibits a PBM from restricting pharmacy delivery services.|
|Total states: 21||Total Bills Enacted||32|
1. Bills that ban gag clauses prohibit a contract between a PBM and a pharmacy from including provision that prohibit pharmacists from telling consumers about lower-cost options or when drug costs less without insurance. Several states banned gag clauses prior to 2018 (e.g., Connecticut enacted SB 445 in 2017).
2. Bills with licensure/registration language require PBMs to be licensed by the state.
3. Bills can also permit/require pharmacists to disclose information about generically equivalent drug products and/or whether insurance cost-sharing obligations exceed the actual retail price for a prescription.
4. These bills typically prohibit a PBM from requiring a covered person to pay above a certain cost-sharing threshold for a drug.
5. Spread pricing occurs when a PBM charges an insurance plan more for a drug than what the pharmacy is paid. Bills barring spread pricing stop PBMs from collecting copayments that exceed the total charges submitted by a network pharmacy.
6. Bills with transparency requirements require PBMs to report certain cost information about rebates or pricing methodology.