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The GAO Report Identifies Key Patterns in State PBM Regulations.

The U.S. Government Accountability Office (GAO) recently presented a comprehensive report to Congress outlining the regulatory landscape surrounding pharmacy benefit managers (PBMs) in five states: Arkansas, California, Louisiana, Maine, and New York. As states increasingly adopt regulations to govern PBMs, the report serves as a critical resource for stakeholders navigating compliance in this complex domain. PBMs play a pivotal role in administering prescription drug benefits for private health plans, managing claims, negotiating rebates from drug manufacturers, and establishing pharmacy networks. Given the limited federal oversight over PBMs, states have taken the initiative to enact their own laws, leading to a diverse regulatory landscape across the country. Furthermore, state regulators emphasized the importance of granting broad regulatory authority and enforcing PBM laws effectively to ensure compliance. As the regulatory landscape continues to evolve and PBM oversight becomes increasingly prioritized, plan sponsors and stakeholders are advised to stay vigilant and monitor developments in state-level PBM regulations to ensure ongoing compliance and alignment with evolving legal requirements. Click here for article.

The GAO's findings underscore several common themes prevalent in the state PBM regulations:

  1. Fiduciary Responsibilities: Four out of the five states have implemented laws imposing a duty of care on PBMs, ranging from fiduciary obligations to acting in good faith and fair dealing. This underscores a growing trend towards holding PBMs accountable for acting in the best interests of the health plans or entities they serve.

  2. Drug Pricing and Reimbursement: All five states have enacted laws addressing various aspects of drug pricing and pharmacy reimbursement. These regulations aim to curb practices such as spread pricing, where PBMs pay pharmacies less than they charge health plans, and limit PBMs' utilization of manufacturer rebates.

  3. Transparency Measures: Enhanced transparency is a key focus across all states, with laws requiring PBMs to obtain licensure or registration and report critical information such as drug pricing, fees, and rebate amounts. These measures are designed to provide stakeholders with greater visibility into PBM operations and financial dealings.

  4. Pharmacy Network and Access: Each state has introduced regulations aimed at ensuring equitable access to pharmacy networks and affordable patient co-pays. These laws prohibit discrimination against unaffiliated pharmacies and establish guidelines for patient cost-sharing, emphasizing the importance of accessibility and affordability in prescription drug benefits.

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