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Arkansas lawmakers advance bill on regulation of pharmacy managers

By Arkansas Democrat-Gazette Staff and Wire Reports

This article was originally published March 13, 2018 at 2:08 p.m. Updated March 13, 2018 at 4:11 p.m.

With little discussion, an Arkansas House committee unanimously recommended approval Tuesday of a bill that would allow the state to license and regulate pharmacy benefit managers.

House Bill 1010 is a response to cuts in reimbursement provided to pharmacies that took effect Jan. 1 under a contract between Arkansas Blue Cross and Blue Shield and its pharmacy benefits manager, CVS Caremark.

No one spoke against the bill, sponsored by Rep. Michelle Gray, R-Melbourne, during the meeting of the House Insurance and Commerce Committee.

The proposal that would also allow the state Insurance Department to require the pharmacy benefit managers, or PBMs, to license with the state. PBMs run prescription drug plans for employers, government agencies and insurers, among other clients. They use their large purchasing power to negotiate prices.

"Nowhere in here are we saying what the prices are going to be. What we're saying is the reimbursements have to be fair and reasonable to ensure that you have an adequate network of pharmacies," Gray told the panel.

The proposal also would ban PBM "gag clauses" that prevent pharmacists from discussing the total price of a drug or cheaper alternatives. An identical measure is pending in the Senate. Republican Gov. Asa Hutchinson said he supported the measure.

"Our independent, our local pharmacists need to be adequately reimbursed and fairly reimbursed so they can survive and they can serve the patients and members of the community that mean so much to them," Hutchinson said.

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A national group representing PBMs criticized the measure as going too far.

"This legislative mandate would enrich drugstore owners at the expense of patients and the employers that provide prescription drug coverage." PCMA President and CEO Mark Merritt said in a statement.

The anti-tax group Americans for Tax Reform also said it opposed the measure. Grover Norquist, the group's president, sent a letter to lawmakers Tuesday blasting the bill as "a misguided piece of legislation that would unnecessarily insert state government into certain business-to-business transactions."

The House is expected to vote on the proposal Wednesday, and more than three-fourths of lawmakers in that chamber and the Senate have signed on as co-sponsors. Sen. Ronald Caldwell, R-Wynne, is sponsoring an identical version of the bill in the Senate.

Read Wednesday's Arkansas Democrat-Gazette for full details.

Arkansas Democrat-Gazette reporter Andy Davis and The Associated Press contributed to this story.


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1961Feegis says... March 13, 2018 at 4:54 p.m.

It makes sense that the PBM owned by Mega Drug Store chain CVS Caremark would want to short cut small Pharmacy's on their drug reimbursements because if the small pharmacy's don't make money, they close. CVS is planting a store at the corner of Main and Arkansas in my hometown now. Mr. Merritt's comments about enriching drugstore owners is disingenuous at best.

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