HCS HB 197 Wright, Dale Committee
HCS HB 197 -- PAYMENTS FOR PRESCRIPTION DRUGS
SPONSOR: Wright
COMMITTEE ACTION: Voted "Do Pass with HCS" by the Standing Committee on Health and Mental Health Policy by a vote of 11 to 3. Motion to "Do Pass" failed by the Standing Committee on Rules- Legislative Oversight by a vote of 2 to 6.
The following is a summary of the House Committee Substitute for HB 197.
This bill is related to payments for prescription drugs. Beginning March 1, 2025, and annually thereafter, a pharmacy benefits manager (PBM) utilized by the Missouri Consolidated Health Care Plan shall file a report with the Plan for the immediately preceding calendar year regarding rebates, as defined in the bill. The report shall include:
(1) The aggregate dollar amount of rebates collected from pharmaceutical manufacturers;
(2) The aggregate dollar amount of the rebates that were not passed on to the Plan, and
(3) The aggregate dollar amount of all fees and payments received from pharmaceutical manufacturers.
The Plan shall establish a form for the reporting that minimizes administrative burden and cost. Documents, materials, and other information submitted to the Plan shall not be subject to disclosure or compromise the financial, competitive, or proprietary nature of the information, or allow a third party to identify rebate values for a particular outpatient prescription drug, except to the extent they are reported in the aggregate. The Plan shall annually report to the General Assembly the aggregate dollar amount of pharmaceutical rebates and provide information describing the rebate practices of health carriers utilizing pharmacy benefits managers. The Plan may impose a penalty of up to $7,500 on its PBM for each violation of these provisions (Section 103.200, RSMo).
The bill specifies that certain provisions of law pertaining to pharmacists and pharmacies shall not be construed to prohibit patients' ability to obtain prescription services from any licensed pharmacist "or pharmacy", and repeals language specifying that the provisions do not remove patients' ability to waive their freedom of choice under a contract with regard to payment or coverage of prescription expenses and no PBM shall penalize or restrict a health carrier or enrollees from obtaining services from a contracted pharmacy (Section 338.015).
Additionally, the bill repeals a provision of law specifying that certain PBM regulations shall not apply with regard to Medicare Part D, or other health plans regulated partly or wholly under federal law. Pharmacy benefits managers shall notify health carriers and pharmacies in writing of any potential conflict of interest, including but not limited to common ownership or any other relationship between the PBM and any other health carrier or pharmacy with which the PBM contracts. The bill provides standardized definitions for the terms "generic" and "rebate" applicable to PBMs and health carriers, and specifies that PBMs shall owe a fiduciary duty to the state or any health carrier, health benefit plan, or political subdivision with which it contracts (Section 376.387).
The bill repeals a portion of a definition to specify that certain provisions relating to the maximum allowable cost of a prescription drug are applicable to all pharmacies, rather than only to contracted pharmacies. If the reimbursement for a drug to a contracted pharmacy is below the pharmacy's cost to purchase the drug, the PBM shall sustain an appeal and increase reimbursement for the pharmacy and other contracted pharmacies to cover the cost of purchasing the drug (Section 376.388).
The bill specifies that health carriers or pharmacy benefits managers can not discriminate against a covered entity, as defined in the Public Health Service Act, or a pharmacy licensed under Chapter 338 with which a covered entity has contracted to dispense 340B drugs on behalf of the covered entity. The Director of the Department of Commerce and Insurance shall enforce these rules and impose a civil penalty that shall not exceed $5000 per violation per day on any pharmacy benefits manager that violates these provisions (Section 376.414).
This bill requires that an insurer providing coverage for prescription insulin drugs under the terms of a health coverage plan must limit the total amount that an insured person is required to pay for a 30-day supply of a covered prescription insulin drug to no more than $75. On January 1 of each year, the limit on the amount an insured person is required to pay shall increase by a percentage equal to the percentage change from the preceding year in the medical care component of the Consumer Price Index from the US Department of Labor (Section 376.687).
Before November 2, 2023, the Department of Commerce and Insurance, working in conjunction with the Department of Health and Senior Services and the Department of Social Services, shall make a public report that summarizes each department's findings related to insulin pricing practices; public policy recommendations to control and prevent insulin drug prescription overpricing; and any other information the departments may deem necessary to include. The provisions of this requirement terminate January 1, 2024 (Section 376.689).
This bill is similar to HB 1677 (2022).
The following is a summary of the public testimony from the committee hearing. The testimony was based on the introduced version of the bill.
PROPONENTS: Supporters say that this bill would increase access to necessary medical care for persons particularly in rural areas that may not be serviced by a large pharmacy chain. In addition, for 340B drug pricing, many small-business pharmacy owners must pick which locations would cover their 340B drug pricing. As prescription drug costs continue to rise, 33 states and the last two presidential administrations have conducted investigations into the efficacy of programs such as these, and their findings suggest that consumers will be able to save more readily on costs.
Testifying in person for the bill were Representative Wright; University of Missouri Health Care System; Erica Crane; Jerry Callahan; Joan Twiton, Fordland Clinic; Missouri Pharmacy Association; Karen White, Mo Highlands Health; Lisa Umfleet; and Missouri Hospital Association.
OPPONENTS: Those who oppose the bill say that the pharmacy benefits manager, or PBM, is the only stakeholder in the drug supply chain that seeks to reduce costs; no one is mandated to use a PBM. Opponents also argue that this bill will eliminate cost-savings tools, raise overall costs of medicine, and remove the authority of the PBM to make decisions over certain plan policies, procedures, administrative functions, and so on. Employers rely on PBMs to handle business relating to pharmacy costs.
Testifying in person against the bill were Associated Industries of Missouri; Cigna; St. Louis Area Business Health Coalition; Elevance Health; Missouri Chamber of Commerce and Industry; Navitus Health Solutions; Missouri Insurance Coalition; Mid-America Carpenters Regional Council; Pharmaceutical Care Management Association (PCMA); America's Health Ins Plans; and Blue Cross Blue Shield .
Written testimony has been submitted for this bill. The full written testimony and witnesses testifying online can be found under Testimony on the bill page on the House website.