Comparison of State Pharmacy Benefit Managers Laws

Earlier this year, 20 states passed 31 bills to shed light on the opaque business practices of pharmacy benefit managers (PBMs). States took varied approaches to curb prescription drug costs by regulating PBMs. The chart below details the PBM practices each state tackled, and how their approaches compare with NASHP’s PBM model legislation.

StateBill NumberBans gag clauses that prevent pharmacists from sharing lower-cost optionsRequires PBMs to be licensed by the state Permits or mandates disclosure of a drug's out-of-pocket costs with and without insurance and availability of generic optionsLimits patient cost-sharingPrevents price spreading, when PBMs charge plans more than what a pharmacy is paidRequires PBMs to report pricing and rebate information to promote transparencyMiscellaneous Provisions
NASHPModelThis measure stipulates that a PBM has a fiduciary duty to a health carrier.
ARSB 2This measure prohibits PBMs from using untrue, deceptive or misleading solicitations or advertisements.
ARHB 1010This measure prohibits PBMs from using untrue, deceptive or misleading solicitations or advertisements.
AZHB 2107
COHB 1284
CTHB 5384
FLHB 351
INHB 1317
KSSB 351
KYSB 5This measure requires the Department of Medicaid to directly administer all outpatient pharmacy benefits and prohibits pharmacy benefits in Medicaid managed care contracts.
KYHB 463
LASB 283
LASB 130
LAHB 436
MDSB 576
MDHB 736
MDHB 1349
MSHB 709
MOSB 826
NHSB 481This measure establishes a committee to study the impact of PBM operation costs, administration and distribution of prescription drugs.
NHHB 1746
NHHB 1791This measure limits consumers' out-of-pocket drug costs to the lesser of: the cost-sharing requirement, the amount the insurer or PBM will reimburse the pharmacy for the drug, or cash price.
SCHB 5038This measure prohibits a PBM from restricting pharmacy delivery services.
SDSB 141
TNHB 1857
TNSB 1852
UTSB 208
VASB 933
VAHB 1177
WVSB 46
Total Bills1971012256
Total states: 19Total Bills Enacted31

 


Footnotes

1. Bills that ban gag clauses prohibit a contract between a PBM and a pharmacy from including provision that prohibit pharmacists from telling consumers about lower-cost options or when drug costs less without insurance.

2. Bills with licensure/registration language require PBMs to be licensed by the state.

3. Bills can also permit/require pharmacists to disclose information about generically equivalent drug products and/or whether insurance cost-sharing obligations exceed the actual retail price for a prescription.

4. These bills typically prohibit a PBM from requiring a covered person to pay above a certain cost-sharing threshold for a drug.

5. Spread pricing occurs when a PBM charges an insurance plan more for a drug than what the pharmacy is paid. Bills barring spread pricing stop PBMs from collecting copayments that exceed the total charges submitted by a network pharmacy.

6. Bills with transparency requirements require PBMs to report certain cost information about rebates or pricing methodology.