{"id":12778,"date":"2018-02-20T04:48:42","date_gmt":"2018-02-20T04:48:42","guid":{"rendered":"http:\/\/arknews.org\/?p=12778"},"modified":"2018-02-20T04:48:42","modified_gmt":"2018-02-20T04:48:42","slug":"special-legislative-session-could-make-arkansas-first-to-regulate-pharmacy-benefit-managers","status":"publish","type":"post","link":"https:\/\/arknews.org\/index.php\/2018\/02\/20\/special-legislative-session-could-make-arkansas-first-to-regulate-pharmacy-benefit-managers\/","title":{"rendered":"Special legislative session could make Arkansas first to regulate pharmacy benefit managers"},"content":{"rendered":"
\"\"
Governor Hutchinson<\/figcaption><\/figure>\n

 <\/p>\n

On Monday afternoon, Governor Hutchinson said he would call a special session of the Arkansas legislature to address low reimbursement rates provided to pharmacies by middleman companies called pharmacy benefit managers, or PBMs. The special session will begin after the ongoing fiscal session \u2014 during which the General Assembly typically handles budgetary matters only \u2014 though the governor declined to give an exact date.<\/span><\/p>\n

\u201cOur local pharmacists \u2026 are an integral and critical part of our health care system in Arkansas,\u201d Hutchinson said. \u201cWe\u2019re a rural state. Independent local pharmacists are very important. \u2026 If they go out of business, that\u2019s a problem for our state.\u201d<\/span><\/p>\n

Insurance carriers hire PBMs to negotiate better prices on pharmaceuticals with drug manufacturers. PBMs also handle pharmacy claims; when a patient with insurance fills a prescription at a pharmacy, the PBM reimburses the pharmacy for the drug in question on the insurer\u2019s behalf. But Arkansas pharmacists say those reimbursement rates have recently dropped so low that they are losing money on many prescriptions, forcing them to lay off employees and, in some cases, go out of business.<\/span><\/p>\n

The controversy is focused on CVS Caremark, the PBM used by the state\u2019s largest insurance carrier, Arkansas Blue Cross and Blue Shield. In January, Blue Cross and CVS Caremark made changes that sent pharmacists\u2019 losses skyrocketing, according to Scott Pace, CEO of the Arkansas Pharmacists Association. <\/span><\/p>\n

\u201c[CVS Caremark has] arbitrarily slashed rates ... to where pharmacists aren\u2019t even being reimbursed the cost of their product,\u201d Pace said in an interview last week.<\/span><\/p>\n

Most of the 285,000 beneficiaries of Arkansas Works \u2014 which provides low-income adults with Medicaid-subsidized health insurance through private carriers \u2014 are on Blue Cross plans. That fact has compounded pharmacists\u2019 losses and helped prompt demands for the legislature to intervene, perhaps by giving state regulators oversight authority over PBMs. Both Republicans and Democrats have called for more regulation.<\/span><\/p>\n

Hutchinson said today that \u201cthe quickest remedy\u201d to the problem was \u201ca market-based solution\u201d in which pharmacists, carriers and PBMs hammer out a pricing model without government intervention. But he also said that he approved of giving the Arkansas Insurance Department some authority over PBMs. If Arkansas begins regulating the companies, it could become the first state to take such a step, he added.<\/span><\/p>\n

\u201cI support giving the Insurance Department oversight. \u2026 It\u2019s my understanding that no state has really put PBMs under regulatory authority yet,\u201d the governor said. \u201cI know a number of states are considering it.\u201d Hutchinson said he believed there was general consensus in the legislature about vesting the Insurance Department with such authority, but that \u201cwe still have to develop the language of the specific legislation, and that\u2019s up to the legislative body to do that.\u201d <\/span><\/p>\n

Rep. Michael John Gray (D-Augusta), the chair of the state Democratic Party, said his minority party was \u201con board with fixing this PBM issue\u201d but that the fix had to be \u201cmore than window dressing.\u201d Gray said there were several pieces of proposed legislation being floated. <\/span><\/p>\n

\u201cI think that\u2019s why he\u2019s allowing some time \u2026 to flesh it out,\u201d Gray said, of Hutchinson. <\/span><\/p>\n

When Blue Cross made the recent change to its pricing model that resulted in plummeting reimbursement rates for pharmacists, it did so in part in an attempt to control the cost of Arkansas Works. The program requires insurance carriers to stay beneath<\/span> a certain average per-patient spending cap. Last week, Blue Cross spokesperson Max Greenwood said that the carriers had to drive down pharmacy costs below their 2017 level or risk running over the cap in 2018.<\/span><\/p>\n

That was an \u201cabsolutely\u201d valid concern on the part of Blue Cross, Hutchinson said today.<\/span><\/p>\n

\u201cI put pressure on the carriers to control their costs and keep underneath the caps, and they\u2019ve responded to that. And it\u2019s not just a pharmacy issue \u2026 they\u2019ve reduced costs in other areas.\u201d <\/span><\/p>\n

He also said that PBMs can be effective at saving money for insurers (and, by extension, consumers and taxpayers). It\u2019s not that PBMs \u201cshould be abolished,\u201d Hutchinson said. \u201cIt\u2019s just that you\u2019ve got to make sure that there\u2019s not too much of the margin taken out by the PBMs that is to the detriment of the pharmacists. And so you have to balance that. \u2026 We\u2019ve put pressure on the carriers to control costs, and we\u2019re asking them now to make sure that\u2019s balanced as to who absorbs some of those cost-control efforts.\u201d<\/span><\/p>\n

The Monday announcement was a response to a letter sent to Hutchinson on Friday in which <\/span>Senate President Pro Tempore Jonathan Dismang (R-Searcy) and House Speaker Jeremy Gillam (R-Judsonia) asked the governor to call a special session. Though the legislature may take up nonbudgetary bills in a fiscal session with a two-thirds vote of both chambers, legislative leadership has been reluctant to open the door to such legislation in past fiscal sessions. <\/span><\/p>\n

Asked why he preferred to handle the PBM issue in a separate special session, Hutchinson said it was \u201cmore consistent with the historic view of that constitutional amendment that provides a fiscal session is for budget matters.\u201d<\/span><\/p>\n

The special session call will also include a separate, unrelated issue regarding a correction to a 2017 law regarding open containers of alcohol in vehicles; the change will qualify Arkansas for certain federal highway funds. Hutchinson said it is possible other matters may be added, but it is unlikely recent proposals to revise a 2017 law on firearms will be among them. <\/span><\/p>\n

\u201cThis special session is not about gun legislation, and I don\u2019t expect that to be on the call,\u201d he said.<\/span><\/p>\n

This reporting is courtesy of the Arkansas Nonprofit News Network, an independent, nonpartisan news project dedicated to producing journalism that matters to Arkansans. Find out more at\u00a0arknews.org<\/a>.<\/i><\/p>\n

<\/div>\n
<\/div>\n","protected":false},"excerpt":{"rendered":"

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