Legislature considers bill to curb drug costs

csimt Uncategorized

By: Perrin Stein

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.

Read more at the Bozeman Daily Chronicle