In 2018, 21 states passed 32 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.

Notes

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. Several states banned gag clauses prior to 2018 (e.g., Connecticut enacted SB 445 in 2017).
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.