Louisiana Senate Bill SB143

Louisiana 2012 Regular Session

• Introduced: 3/12/12
• Refer: 3/12/12

Caption

Requires local sales tax due on the distribution of prescription drugs by a pharmacy in the state on behalf of a pharmacy benefit management company to be collected from the pharmacy benefit management company. (7/1/12) (OR -$125,000,000 LF RV See Note)

Impact

The introduction of SB 143 is likely to have significant implications for the way pharmacies and PBMs operate within the state. By defining PBMs as dealers responsible for tax collection, the bill could potentially ease the burden on pharmacies, which previously may have been tasked with handling sales tax on these transactions. This could lead to a more organized approach to tax compliance in the pharmaceutical sector; however, it may also result in increased financial responsibilities for PBMs, impacting their business operations and profit margins.

Summary

Senate Bill 143 aims to modify the taxation framework concerning the distribution of prescription drugs in Louisiana. Specifically, the bill mandates that local sales tax applicable to the distribution of prescription drugs by a pharmacy on behalf of a pharmacy benefit management company (PBM) should be collected from the PBM itself, rather than the dispensing pharmacy. This change seeks to streamline tax collection processes and clarify the definition of who should be considered a 'dealer' in these transactions, thus affecting statutory tax obligations.

Sentiment

The sentiment surrounding SB 143 is mixed among stakeholders within the healthcare and pharmaceutical industries. Proponents of the bill, including pharmacy associations, argue that it simplifies tax compliance and reduces administrative burdens, which is beneficial in the fast-paced healthcare environment. Conversely, some critics express concerns about the potential for PBMs to pass on additional costs to pharmacies or to underfund local budgets, thereby impacting the resources available for healthcare services in communities.

Contention

One of the primary points of contention regarding SB 143 revolves around the definition and scope of responsibilities assigned to pharmacy benefit management companies. Opponents of the bill worry that transferring tax collection duties to PBMs may lead to unintended consequences, such as delays in tax remittance or resistance from PBMs concerning compliance. Additionally, there is debate over whether this legislative change adequately addresses broader concerns about transparency and fairness in the operation of pharmacy benefit management in Louisiana's healthcare system.