Gov. DeSantis signs ‘Prescription Drug Reform Act’ targeting pharmacy benefit managers

Gov. DeSantis signs Prescription Drug Reform Act (WJXT)

At a news conference Wednesday morning in Jupiter, Gov. Ron DeSantis signed a bill that will increase regulations on pharmacy benefit managers -- the middlemen of the pharmaceutical industry.

DeSantis was joined at the news conference by Agency for Health Care Administration Secretary Jason Weida and Department of Elder Affairs Secretary Michelle Branham.

The House and Senate unanimously passed the bill (SB 1550), which drew heavy lobbying and could affect a wide range of interests, including patients, pharmacies, health insurers, drug manufacturers and employers.

Pharmacy benefit managers, or PBMs, contract with health insurers, self-insured employers and governments to play roles including negotiating drug prices with manufacturers, establishing pharmacy networks and paying claims.

“It’s a very opaque part of this process but they make huge, huge amounts of money and really help drive the cost of prescription drugs higher and higher,” DeSantis said. “Right now, you have about three of these PBMs that control 80% of the prescription drug market. This really hurts, of course, consumers, but it also hurts neighborhood pharmacies because they have practices that make it more difficult for these folks to stay in business.”

Those independent pharmacies have long called for the state to make changes related to PBMs, which they contend have too much leverage in the market.

But the PBM industry has argued it helps lower prescription costs through such things as negotiating rebates with drug manufacturers and discounts from pharmacies.

Gov. DeSantis signs Prescription Drug Reform Act (WJXT)

According to the Governor’s Office, Senate Bill 1550 institutes regulatory best practices for PBMs operating in Florida and provides the Office of Insurance Regulation (OIR) the authority to examine and investigate PBMs and review possible violations of rules, as is done with all insurers in the state of Florida.

PBMs will also have to disclose all organizations affiliated with the applicant, including any affiliated pharmacies or companies within their corporate umbrella.

“This legislation builds a foundation of transparency for pharmacy benefit manager practices and drug prices in Florida, allowing consumers to make the best choices for their own health,” DeSantis said in a news release. “PBMs and Big Pharma have managed to escape the public eye and work in the shadows for far too long. I’m proud to sign a bill that takes the reins back from these health care monopolies while empowering consumers.”

The bill institutes a series of patient protections within the insurance code, including prohibiting a PBM from forcing someone to restart a medication they know doesn’t work when they switch insurance companies.

The bill also requires pharmaceutical companies to disclose price increases for price hikes of 15% within a calendar year or 30% within a three-year period.

The bill will also:

  • Prevent PBMs with affiliated pharmacy businesses from only having affiliated pharmacies in their pharmacy networks
  • Require the Division of Consumer Services of the Department of Financial Services to designate an employee as the primary contact for consumer complaints involving PBMs
  • Provide a grandfathering provision for certain PBMs operating as administrators
  • Prevent PBMs from requiring patients to receive prescriptions by mail

“If you want to do the mail (order prescriptions), that’s fine. You should have that option,” DeSantis said at the news conference. “But you should not be forced to do the mail just because they’re going to be making more money if you do it that way.”

About the Authors:

A Jacksonville native and proud University of North Florida alum, Francine Frazier has been with News4Jax since 2014 after spending nine years at The Florida Times-Union.

Jim has been executive editor of the News Service since 2013 and has covered state government and politics in Florida since 1998.