HB1354
To Regulate Pharmacy Benefits Managers; To Amend The Law Concerning The State And Public School Life And Health Insurance Program; And To Amend The Law Concerning Certain Health Benefit Plans.
AI-Generated Summary
This bill aims to regulate Pharmacy Benefits Managers (PBMs) in Arkansas. It defines various terms related to PBMs, contracts, and Medicaid. A key provision prohibits state government and public plan sponsors from contracting with PBMs that use national pharmacy contracts that do not comply with Arkansas law. The bill outlines specific prohibited practices for PBMs when contracting with these sponsors. This includes restrictions on using non-Arkansas-specific contract terms, differential payment rates for pharmacies based on ownership of publicly traded companies, and certain fee structures related to drug coupons. It also mandates that PBMs reimburse pharmacies at rates no less than national average drug acquisition costs plus a percentage or a flat amount, and a professional dispensing fee no lower than the Arkansas Medicaid Program's rate. Furthermore, it requires PBMs to pass through savings from manufacturer coupons to patients or sponsors and prohibits passing the cost of professional dispensing fees to beneficiaries. The bill also requires PBMs to disclose compensation practices and makes non-compliant PBMs ineligible for future contracts. Finally, it mandates pharmaceutical manufacturers for Medicaid to pay state plan sponsors rebates at rates equal to or greater than those required by Medicaid.
Potential Impact Analysis
Who Might Benefit?
The primary beneficiaries of this bill are likely to be Arkansas residents who are beneficiaries of state government and public school life and health insurance programs, as well as individuals covered by health benefit plans offered by certain governmental entities. The bill aims to ensure that PBMs contract with pharmacies on terms that are specific to Arkansas law and that reimbursements and dispensing fees are fair and transparent. Pharmacies operating within Arkansas may also benefit from more standardized and potentially higher reimbursement rates, particularly those not affiliated with PBMs. Additionally, state government and public plan sponsors could benefit from increased transparency and potentially cost savings due to the mandated pass-through of manufacturer coupon savings and clearer rebate requirements for pharmaceutical manufacturers.
Who Might Suffer?
Pharmacy Benefits Managers (PBMs) are likely to be the entities most directly negatively impacted by this bill. The legislation imposes new regulations and restrictions on their contracting practices, reimbursement methodologies, and fee structures when dealing with state government and public plan sponsors. Specifically, PBMs will be prohibited from using certain national contract terms, may face limitations on how they structure payments to pharmacies, and will be required to adhere to specific minimum reimbursement rates and dispensing fees. The disclosure requirements and potential ineligibility for future contracts for non-compliant PBMs could also present significant challenges. Pharmaceutical manufacturers for Medicaid could also be negatively impacted if they are required to pay higher rebates or if their appeals to avoid or reduce rebates are denied.