PENNSYLVANIA (WJAC) — Pennsylvania lawmakers pressed state insurance officials for answers on when new pharmacy benefit manager reforms will start producing real transparency, as budget hearings for the Pennsylvania House began with a focus on Pennie and health insurance.
The Department of Insurance and Pennie presented to the House Appropriations Committee, where members questioned officials about pharmacy benefit managers, or PBMs, and the status of the PBM Reform Act signed into law by Gov. Josh Shapiro in July 2024.
The law expands the Insurance Department’s regulatory authority over PBMs and is intended to allow for more transparency.
Insurance Commissioner Michael Humphreys told the committee the reforms are still in the early stages.
He said the law allows for a study of spread pricing required under the legislation, and that the department has contracted with a consulting firm to conduct the study.
Humphreys said the results will be revealed in the next six to eight weeks.
Humphreys also outlined upcoming reporting requirements for PBMs.
He said PBMs will have to fill out their first network adequacy report in April, and in July transparency reports will come into play showing how much PBMs are paying affiliated and non-affiliated pharmacies.
He said the department is actively working with smaller pharmacies through that process and that communication is a major part of those reports.
Rep. Marla Brown raised concerns about how PBMs are affecting small pharmacies in her district, citing what she described as continued financial losses even after the law took effect.
“I have a small hometown pharmacy in my district,” Brown said. “In fact, they’re called hometown pharmacy.”
Brown said Shapiro visited the pharmacy last August and “had expressed, you know, his concern and empathy for what they were going through.”
She said she followed up with the pharmacy since the law took effect and was told that, “pharmacies are still losing a significant amount of money dispensing through managed care MCOs, namely Express Scripts, CVS, and Caremark.”
“The PBM spread pricing still exists,” Brown said. “Variable contract rate pricing is an effect where contract reimbursement rates constantly change.”
Brown also said, “There are countless examples of where patients have unmet deductibles,” and described a pattern in which “the bottom drops out and the reimbursements are much smaller.”
She said she was concerned about small businesses trying to survive in her community and asked, “Have we begun checking or challenging some of these processes?”
Humphreys responded that many provisions of Act 77 did not start until January of this year.
He also said small pharmacies should bring issues they are encountering to the department, and he said they will have a direct line to PBMs to require corrective behavior.