Pharmacy benefit managers (PBMs) who fail to register with the state can face a $10,000 fine under a bill that was approved by the Legislative Assembly this session.
PBMs negotiate with drug manufacturers on behalf of insurance companies to purchase drugs at discounted prices or promise additional discounts.
They have been pejoratively called “middlemen” because of “spread pricing” – a term describing the practice of charging an insurer one price for a drug and paying the pharmacy a lower cost while pocketing the difference.
In 2018, lawmakers approved limited regulations on PBMs, requiring them to register with the Office of Insurance Regulation. However, this law did not provide any mechanism to enforce this requirement.
HB 357sponsored by Rep. Jackie Toledoadds teeth to the requirement by allowing the Office of Insurance Regulation to impose a $10,000 fine on anyone working as a PBM who has not registered with the state.
The Tampa Republican has fought for greater oversight of PBMs for several legislative sessions, arguing that they drive up the cost of prescription drugs for all Floridians. When introducing a streamlined regulatory bill last year, she said PBMs “prey on families and patients at their most vulnerable and take advantage of the backs of ordinary Floridians.”
The Toledo bill also extends the Florida Pharmacy Act of 2014, which lists pharmacists’ rights when audited, including one week’s notice before an on-site audit and the right to reimbursement of applications refused due to a clerical error.
But, like the PBM registration requirement, the method of enforcing these rights was limited. If signed, HB 357 would transfer enforcement powers from the Department of Health and the Florida Board of Pharmacy to the OIR.
The bill also changes the law to allow the findings of a PBM audit to be appealed through the state’s provider and health plan dispute resolution program.
The bill was approved by both houses unanimously. If signed by the governor, it comes into effect on July 1.