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Rep. Galonski calls for tighter regulation of pharmacy benefit managers

January 14, 2020
Tavia Galonski News

COLUMBUS— State Rep. Tavia Galonski (D-Akron) today provided sponsor testimony for House Bill (HB) 396, which was originally introduced on Nov. 5, 2019. HB 396 aims to eliminate the ability of pharmacy benefit managers (PBMs) to implement spread pricing techniques. The legislation also outlines different measures PBMs would have to take to be more transparent in regards to the number of rebates received and distributed. 

“We cannot allow for PBMs to continue to operate in this underregulated state. People are legitimately dying because of barriers to their medication while PBMs profit,” said Rep. Galonski. “It is nothing short of appalling the impact this has on the average Ohioan.” 

As defined in the bill, spread pricing is “the model of prescription drug pricing by which a PBM charges a plan sponsor a contracted price for a prescription drug, and that contracted price is different from the amount the PBM directly or indirectly pays the pharmacist of a pharmacy for that drug or the pharmacist services related to that drug.” 

Due to spread pricing, PBMs may be inclined to purchase more expensive drugs but offer the drugs to community pharmacies at a lower reimbursement rate.  As a result, PBMs can make more money off of more expensive drugs despite the drug itself actually being just as effective as a cheaper drug.  Pharmacies have been negatively impacted by spread pricing, which has resulted in closing locations entirely or pharmacies not carrying certain medications.  

“For too long, PBMs have been holding back reasonably priced medications and throwing our healthcare system into crisis mode,” added Rep. Galonski. “HB 396 not only keeps our Ohio promise to ensure that everyone has access to healthcare, but also protects our small business pharmacies.”

At this time, it is unclear when HB 396 will have a second hearing in the House Health Committee.