Regulation of pharmacy benefit managers, fiduciary and disclosure requirements on pharmacy benefit managers, and application of prescription drug payments to health insurance cost-sharing requirements. (FE)
One notable modification introduced by AB773 addresses how PBMs interact with pharmacies involved in the 340B drug pricing program, which provides drugs at discounted prices to eligible healthcare organizations. The bill explicitly prohibits PBMs from imposing unfair conditions on pharmacies connected to the 340B program, including underpayment for drugs dispensed versus those not covered under the program. This is a crucial step in leveling the playing field for pharmacies participating in federal programs dedicated to supporting underserved populations.
Assembly Bill 773 seeks to enhance the regulation of pharmacy benefit managers (PBMs) and the relationship between these entities and pharmacies. Primarily, the bill mandates that PBMs reimburse pharmacies a professional dispensing fee analogous to that provided by the state under Medical Assistance programs, helping to ensure fair compensation for pharmacy services. Furthermore, the legislation prohibits PBMs from charging pharmacies any sort of remuneration that could serve to undermine operational viability, like claim-processing or performance-based fees. These measures aim to protect pharmacies' financial interests and sustain access to prescriptions for patients.
Despite the advantages presented by the new regulations, some concern has been raised regarding potential overreach. Critics argue that while enhancing transparency and fair practices is commendable, the significant restrictions could limit PBMs' operational flexibility and drive up costs for insurance plans. There is ongoing debate among stakeholders, including lawmakers, health benefit sponsors, and healthcare providers, about the implications of these regulations on the sustainability of pharmacy services and the overall cost of healthcare.
The bill also establishes fiduciary duties for PBMs towards health benefit plan sponsors, promoting superior transparency in financial dealings, including detailed disclosures concerning profit margins and relationships with pharmacies. Additionally, strict audit guidelines are mandated to ensure equitable treatment of all pharmacies during audits, designed to mitigate the risk of arbitrary penalties that could financially harm pharmacies without just cause.