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Lawmakers consider bill aimed at reducing prescription costs

February 1, 2019

HELENA, Mont. (AP) — Montana lawmakers are considering a bill aimed at reducing prescription drug prices for people who buy their health insurance through the marketplace, although companies that sell individual health insurance plans argued Friday it would actually hamper their efforts to negotiate favorable contracts for administration of their prescription benefits.

Supporters, including state Auditor and Insurance Commissioner Matt Rosendale, argued pharmacy benefit managers are pocketing too much money in their role as a middle-man between pharmaceutical companies and health insurers and choose the types of drugs they’ll cover based on how much of a rebate they’ll receive from manufacturers. He said the bill would give insurance companies the regulatory backing they need to negotiate more favorable contracts with pharmacy benefit managers.

Rosendale said drugs travel a complicated path between manufacturer and consumer with each entity raising the price along the way.

“We have zeroed in on the pharmacy benefit managers being the biggest beneficiary in that process,” Rosendale told the Senate Business and Labor Committee.

Lobbyists for drug manufacturers expressed support for the bill.

Opponents, including insurance companies that sell policies on the federal exchange, say they already dictate the terms of their pharmacy administration contracts and the proposed law would actually eliminate some of their options for negotiating better deals.

The bill would require that the amount a health insurer pays for a prescription drug be the same amount the pharmacy receives and requires that all rebates from drug manufacturers be returned to health insurance companies and be used to reduce premiums.

Richard Miltenberger, the chief executive officer of the Montana Health Co-Op, which offers health insurance policies through the marketplace, said his organization has a pharmacy benefit management contract that does not allow spread pricing and includes a complete pass-through of drug rebates.

The bill regulates pharmacy benefit managers through the insurance companies, which could be fined for violations, which Miltenberger called unfair.

Jennifer Hensley with Pacific Source Health Plans said: “We’re already able to do many of the things that this bill purports to do for us,” adding that drug manufacturers have “done a fantastic job nationwide in turning our lens toward” pharmacy benefit managers.

Pacific Source uses PBM’s for claims processing and price negotiating power, she said.

“If you really want to help,” she told the committee, “let’s dig into some pharmaceutical manufacturer transparency.”

The committee did not act on the bill Friday.

Congress and other states are also trying to develop solutions to address increasing prescription drug prices, from investigating manufacturers to proposing importing lower-priced drugs from Canada. President Donald Trump signed a law in October that prohibits clauses in pharmacy contract that prevent pharmacists from telling consumers when the cash price for a drug is less than their co-payment.

Another bill moving its way through the state Legislature seeks to protect pharmacies from “take it or leave it” contracts with pharmacy benefit managers that include sometimes unexpected, retroactive fees and that prohibit pharmacies from operating a mail order businesses.

“There are good actors in this game of being a pharmacy middle man,” Sen. Al Olszewski, a physician and Republican from Kalispell, said last week in support of the pharmacy contract bill, which passed the Senate 49-0. “The good actors are doing what’s already in this bill. But there are bad actors that are not.”

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