In May Florida Governor Ron DeSantis signed SB 1550 into law. The move enacted new guidelines for pharmacy benefit managers or PBMs. A pharmacy benefit manager’s role is to act as an in-between for insurance companies, pharmacies, and drug manufacturers. PBMs work to lower the cost of drugs for insurers and insurance companies. This is done by negotiations with the pharmacies and drug makers. PBMs claim that they help to lower prescription costs through their negotiation of rebates and discounts.
The new law requires PBMs to be transparent in their negotiations and drug prices. It’s designed to give Florida consumers more information to make the best decisions for the type of prescriptions they choose to purchase. Lawmakers believe that the way the PBM industry has operated no longer serves consumers. Some say that PBMs have too much leverage in the market.
Breaking Down the Changes
Gov. DeSantis has now given the state’s Office of Insurance Regulation more oversight over PBMs and their practices. The OIR now has the power to limit the activities of PBMs and prevent them from requiring patients to receive prescriptions by mail. The law also prevents what is known as “spread pricing.” Spread pricing occurs when PBMs get reimbursed a certain amount for a drug by an insurer or employer but pay pharmacies a lower price to distribute the drug.
For years, independent pharmacies have asked the state to make changes in how PBMs operate. The bill was based unanimously by the Florida House and Senate. According to the bill’s history, it was originally filed in early March. It took about two months before the bill reached DeSantis’ desk and by a stroke of his pen, it became law.
The Upside to PBMs
There are lots of benefits to PBMs and the roles they play. Generally, they are thought to save consumers money with their negotiations. They can also help consumers with receiving their medication in convenient forms, like through the mail. PBMs can also offer clinical services as well as review claims. This can help them figure out which consumers are eligible for reimbursement.
The Downside to PBMs
However, for the consumer, there can be a downside to PBMs as well. Some believe that PBMs have the power to restrict access to certain medications. They can do this by limiting the options available to consumers and by increasing prescription costs. They can control costs by limiting the discounts offered. Before the law was passed, PBMs did not have to be open about their dealings with drug manufacturers. This left many consumers in the dark about why their medications were priced the way they were.
Prioritizing the Healthcare Benefits Your Employees Want
Let Alltrust Insurance be your first choice for delivering the best employee benefits for your workers. We know that the cost of healthcare is a top concern for many. That’s why we’ll use our relationships with insurance providers and our expertise in the insurance industry to help your company select the best benefits package.
Please contact us to get started! We look forward to working with you and helping your business reach a new level of success.
