Shapiro Administration PBM Study Shines Light on Prescription Drug Chain’s Middlemen, Increases Transparency in the Pharmaceutical Market
The Pennsylvania Insurance Department (PID) has released a study on pharmacy benefits managers’ (PBMs) activities across Pennsylvania’s commercial, fully-insured insurance markets. The new PID study delivers important transparency to the prescription drug market and evaluates the potential impact of a uniform approach to pharmacy reimbursement.
In July 2024, Governor Josh Shapiro signed into law the Pharmacy Benefit Reform Act (Act 77 of 2024), a state law that expanded PID’s authority over PBMs to increase fairness and transparency of prescription drug coverage in fully-insured plans. As part of this historic reform, Act 77 tasked PID with studying the scope and impact of steering and spread pricing on prescription drug access and affordability in the Commonwealth. The law also specifically charged PID with evaluating a proposal to require pharmacy reimbursement to be based on the national average drug acquisition cost (NADAC) plus a $10.49 professional dispensing fee. Read PA Insurance Dept. announcement…
Pennsylvania Insurance Department Act 77 of 2024 Impact Study
Editor’s Note: The PPA appreciates the effort of the Pennsylvania Insurance Commission (PIC) to prepare the Pennsylvania Insurance Department Act 77 of 2024 Impact Study. The study is limited to the fully insured commercial market, which represents about 24% of overall healthcare, a small subset of insurances in Pennsylvania. Self-funded employer plans, Medicaid and Medicare are all excluded in this report. Fully-insured plans tend to be more regulated and visible whereas self-funded plans are where PBM contracts are most opaque and where spread, steering and other practices are least regulated and scrutinized.
Several key findings in the report point to the need for more oversight as we work with the Insurance Commission to understand the full scope of the study, what it says about the potential for savings in other 76% of the market that was not included in the study and what legislatively needs to be done to correct what was uncovered.
The PPA will continue to monitor this situation very closely.
