Missouri aims to address medication pricing by reforming pharmacy benefit manager system
This 2018 photo shows bottles of medicine at a mail-in pharmacy warehouse in Florence
ST. JOSEPH, Mo. (News-Press NOW) -- Missouri could join a number of states adding new regulations to pharmacy benefit managers who play a central role in setting patient prescription prices.
Dual legislation introduced in both the Missouri House and Senate by Sen. Jill Carter (R-32) and Rep. John Hewkin (R-120) would modify definitions and regulations to address transparency and pricing disparities tied to pharmacy benefit managers, or PBMs.
Pharmacy benefit managers are a third-party administrator or company that acts as an intermediary between drug manufacturers, pharmacies, and insurance plans, negotiating prices, managing prescription drug benefits, processing claims and creating drug formularies to control drug spending and negotiate discounts and rebates.
In recent years though concerns have grown about a lack of transparency and anticompetitive practices that have led to restricted choices for patients and higher costs for certain prescriptions. Supporters of reform also say the current PBM system leads to financial strain for local pharmacies as well as employers who utilize certain health insurance plans.
In September 2024, the Federal Trade Commission filed a lawsuit against the three largest prescription drug benefit managers: Caremark Rx, Express Scripts and OptumRx and their affiliated group purchasing organizations (GPOs) for engaging in anticompetitive and unfair rebating practices that the alleged artificially inflated the list price of insulin drugs.
“These bills deliver long-overdue transparency and basic accountability in the prescription drug system so families, pharmacists, and employers stop paying more than they should while patients get the care they need,” Sen. Carter said.
SB 984 and HB 1850 modify the definition of "covered person" and "pharmacy benefits manager rebate aggregator", "pharmacy claims data", and "rebate" for the purposes of regulating costs charged to patients.
The act also adds several provisions relating to contracts between PBMs and pharmacies, including providing plan sponsors with pharmacy claims data, submitting documentation of any benefit design that encourages or requires the use of affiliated pharmacies.
"When PBMs control pricing and steer patients to pharmacies that the PBM owns, the fallout hits everyone — patients lose access, employers face higher costs and entire communities are put at risk," Rep. Hewkin said in a release.
The move by Missouri comes after more than 20 states introduced legislation during the 2024 session to regulate pharmacy benefit managers.
The act would also establish a critical access care pharmacy program to ensure the sustainability of critical access care pharmacies in the state. The program would be provided through the the Department of Health and Senior Services.
