Pharmacy Benefits Managers - Definitions of Carrier, ERISA, and Purchaser
If enacted, SB690 will reshape the relationship between PBMs and various entities involved in drug coverage by eliminating exclusions that currently exist for those connected to ERISA plans. This change is expected to enhance regulation and accountability of PBMs in Maryland, as these entities will now be subjected to state laws that govern their operational practices more uniformly. The intention behind this shift is to mitigate any regulatory loopholes that allowed PBMs to operate outside the state’s reach, thereby improving the management of pharmaceutical benefits for beneficiaries in the state.
Senate Bill 690 aims to modify the definitions applicable to pharmacy benefits managers (PBMs) within Maryland’s insurance laws. The bill proposes the repeal of certain definitions, including 'carrier' and 'ERISA', while also revising the definition of 'purchaser'. This adjustment is intended to ensure that particular provisions designed for regulating PBMs extend to those offering drug coverage under plans governed by the federal Employee Retirement Income Security Act of 1974 (ERISA). Essentially, the bill simplifies the application of state pharmacy benefit regulations to all entities providing prescription drug coverage, thereby increasing oversight.
Notably, the bill may face opposition over concerns regarding the extended regulatory reach and implications for competition within the pharmacy sector. Stakeholders such as pharmacy organizations and PBM representatives might express anxiety over tighter regulations, which they argue could limit operational flexibility and increase administrative burdens. Furthermore, there could be debates surrounding the balance between state regulation and federal law, especially regarding the implications of ERISA, as any significant adjustments could lead to conflicts with federal statutory frameworks.