A bill that would have tightened state regulations of pharmacy benefit managers and helped the financial conditions of small pharmacies died last Thursday in the Mississippi House.
This is not a surprise. It’s a difficult topic to begin with, and when you include the obvious dislike that the House and Senate have for each other, agreement on big issues is difficult to find.
Or maybe not.
“What would you say if I told you the bill was not all the way dead?” asked Marty Bigner, a Pike County pharmacist who is a board member of the Mississippi Independent Pharmacies Association.
He said Gov. Tate Reeves’ office spent time this week with independent pharmacy leaders, business representative and lawmakers, trying to find common ground on the PBM bill.
They ran out of time and missed a legislative deadline, but Bigner said he understands that meetings continued Friday in hopes of finding a solution. If that happens, the Legislature could suspend its rules to consider the bill.
The problem, according to pharmacists, is that PBMs are very talented at keeping too large a share of revenue from America’s booming prescription drug business — to the detriment, Bigner says, of independent pharmacies like the ones he runs, as well as the businesses that pay the private insurance premiums.
The specific issue is that the Senate added an $11.29 per prescription “dispensing fee” to the legislation, which the House opposed. So did Gov. Tate Reeves, said Bigner. And so did large employers in the state, who said paying the fee for their insured employees would increase their costs.
Bigner believes the businesses are overlooking another part of the math.
The pharmacy association wanted reimbursements to be based on the price the pharmacy paid for the medication plus the $11.29 fee. He said pharmacies currently are reimbursed by PBMs at the “average wholesale price” for medication, with a varying fee deducted.
Bigner believes the average wholesale price often is 20% above the actual cost of medication. This means the proposed $11.29 would be added to a noticeably lower price. Bigner believes this would reduce the cost of prescriptions.
I tried to read the bill — and failed, because its language is so complicated. The $11.29 figure is not in the legislation. Bigner said it comes from what Medicaid currently pays pharmacies.
“The bill says we want to be paid the same thing the PBMs are paying the pharmacies they own, or what Medicaid is paying them — the greater of,” Bigner said. “The employers and everybody would actually save on the base amount of the drug.”
Bigner was critical of an email sent out Friday by the Mississippi Business Alliance. He said only two or three of its eight points directly addressed the financial problems small pharmacies face.
He was especially skeptical of a provision that would transfer state oversight of PBMs from the Board of Pharmacy to the Commissioner of Insurance. The House apparently put this in the bill.
He said the pharmacy board is familiar with PBMs, while the insurance office would need time to get up to speed.
Bigner said he’d like to believe the dispute could be resolved before the legislative session ends in a few days. He believes pharmacists have enough support in both the House and Senate to override a veto. But it won’t be easy.
“If we simply continue to ask for a dispensing fee, they’ll never pass it,” he said. “If they want us to accept nothing, the bill is probably going to be dead.
“If they offer something, we’ll have to take that number and see if it will be enough. We already know what enough is: Medicaid says it costs $11.29 to fill a prescription. If it’s less than that, it will be more than we’re getting, but it won’t be enough.
“It will probably cause the pharmacy closures to slow down.”
I mentioned something in an editorial last week that bears repeating. In a country awash with prescription drugs, you would think there is enough money sloshing around for everyone involved to make a living.
But no. Somehow, the division of payments is such that a segment of the system, the smaller local pharmacies, is at risk of being forced to close.
A final point: School choice advocates say all the states around Mississippi have new legislation about education, but Mississippi does not.
Well, when it comes to prescription drugs, Bigner said Louisiana, Alabama and Tennessee reimburse pharmacies on a cost-plus-fee system, but Mississippi does not.
At least we are consistent.
