Support Local Journalism


Subscribe


Health insurers and pharmacy benefit managers continue to voice strong opposition to a bill that aims to lower prescription drug prices for Montanans.

Senate Bill 71, which Sen. Albert Olszewski, R-Kalispell, is sponsoring at the request of State Auditor Matt Rosendale, would regulate pharmacy benefit managers, the companies that work with drug manufacturers, pharmacies and health insurers to administer prescription plans.

The bill passed the Senate 37-13 in late February and is now making its way through the House Business and Labor Committee.

In a hearing on Friday, some praised the bill as a way to protect consumers and ensure transparency in drug pricing. Others said it would regulate the wrong aspects of the industry and ultimately wouldn’t save Montanans money.

The new rules would prohibit pharmacy benefit managers from pocketing the rebates they receive from drug manufacturers for having their drugs covered by an insurance company. Instead of retaining the rebate, a pharmacy benefit managers would have to pass it on to insurance companies, which would use it to lower premiums.

Rebates can be a significant contributor to prescription drug costs, Olszewski said.

The bill also would prevent insurance companies from entering into contracts with pharmacy benefit managers that include spread pricing, which is when pharmacy benefit managers charge insurance companies more for a drug than they pay the pharmacies and pocket the difference.

Supporters of the bill emphasized that it’s based on changes already made to the state health plan, which saved the state $7.4 million, and will bring clarity and accountability to drug pricing.

“It is a step toward practices that will help consumers,” said Diane Fladmo, director of research and collective bargaining for the Montana Federation of Public Employees, the state’s largest union.

Al Smith, of the Montana Trial Lawyers Association, said the bill protects consumers and offers “common sense” solutions to the high cost of prescription drugs.

The bill focuses on insurance companies and how they work with pharmacy benefit managers because federal law makes it difficult for states to regulate pharmacy benefit managers directly.

Sean Slanger, of America’s Health Insurance Plan, called the bill “a clever bit of deception.” He said that because the state is limited in its ability to regulate pharmacy benefit managers, the penalties for violating the new regulations are placed on insurance companies, which would pass them on to consumers in the form of higher premiums.

Cindy Laubacher, of Cigna and Express Scripts, and Eric Douglas, of Prime Therapeutics, said drug manufacturers set prices, which is why regulations need to target drug companies rather than pharmacy benefit managers.

Bill opponents also say that the impact of the regulations will be limited as they apply only to health insurance sold on the individual exchange in the state, which is a small part of the overall insurance market.

The committee did not vote on the bill.

Support Local Journalism

To see what else is happening in Gallatin County subscribe to the online paper.

Support quality local journalism. Become a subscriber.

Subscribers get full, survey-free access to the Bozeman Daily Chronicle's award-winning coverage both on our website and in our e-edition, a digital replica of the print edition.