Florida senate brings prescription drug bill — cost analysis says it will increase medicine by $29 billion

A bill has been introduced in Florida that would require drug manufacturers to report price hikes, and alter rules on how pharmacy benefit managers (PBMs) can operate.

SB 1550, filed by Republican Sen. Jason Brodeur earlier this month, requires drug manufacturers to notify the Department of Business and Professional Regulation of any 15 percent increase or more in wholesale acquisition cost during the prior 12-month period, or any increase of 40 percent or more during the preceding 3 calendar years of a course of therapy.

In a release from the Pharmaceutical Care Management Agency, they claim that the bill would cost the state of Florida over $29 billion in increased prescription drug costs, stating that "The proposed Florida legislation will seriously undermine the ability of PBMs to control drug costs and manage their pharmacy networks, and as a result drug spending in Florida will soar."

"PBMs require pharmacies to compete on service, price, convenience, and quality to be included in preferred networks. Pharmacies that agree to participate in such arrangements are designated as ‘preferred’ and become members of a preferred pharmacy network. These types of networks have gained traction among plan sponsors and deliver tangible out-of-pocket savings for patients," the release states.

In notifying the epartment of Business and Professional Regulation, drug manufacturers are required to include on their form "a statement regarding whether a change or improvement in the prescription drug necessitates the reportable drug price increase. If so, the manufacturer must describe the change or improvement."

The bill would also require PBMs to obtain a certificate of authority to operate in the Florida marketplace. According to Florida Politics, PBMs previously had to spend just $5 and register with the state Office of Insurance Regulation.

The outlet explains, "PBMs are companies that contract with health insurers, self-insured plans and government health care programs to process and pay prescription drug costs. PBMs also negotiate drug costs and discounts with manufacturers and assemble pharmacy networks. They often are referred to as 'pharmacy middlemen.'"

Those PBMs without a certificate by January 1, 2024 are subject to a fine of $10,000 per violation per day.

PBMs under this bill would be required to disclose any ownership affiliation with any pharmacy, whether directly or indirectly, within 60 days of the change occurring.

All contracts executed, amended, adjusted, or renewed on or after July 1, 2023 between PBMs and a Pharmacy Benefits Plan or Program must use a pass-through pricing model, a payment model in which the payments made by the benefits program to the PBM for outpatient drugs are equivalent to the payments the PBM makes to a dispensing pharmacy, with these payments under the bill needing to be equivalent to payments made by the PBM to a dispensing pharmacy and are passed through in their entirety by the benefits plan or PBM to the pharmacy.

Networks will not be limited to affiliated pharmacies under the bill, and those covered persons will not be required to receive a prescription drug through the mail.

In a release from the Pharmaceutical Care Management Agency, they claim that the bill would cost the state of Florida over $29 billion in increased prescription drug costs, stating that "The proposed Florida legislation will seriously undermine the ability of PBMs to control drug costs and manage their pharmacy networks, and as a result drug spending in Florida will soar."

"PBMs require pharmacies to compete on service, price, convenience, and quality to be included in preferred networks. Pharmacies that agree to participate in such arrangements are designated as ‘preferred’ and become members of a preferred pharmacy network. These types of networks have gained traction among plan sponsors and deliver tangible out-of-pocket savings for patients," the release states.

The National Association Of Chain Drug Stores issued a statement in support of the bill, with NACDS President and CEO Steven C. Anderson saying, “For far too long, pharmacy benefit manager middlemen have manipulated our healthcare system, profiting at the expense of Florida families, employers, taxpayers, and pharmacies. HB 1509/SB 1550 will help put a stop to this."

"Patients deserve access to affordable medications, and to the medications that are right for them. Patients also deserve the freedom to choose which pharmacy they use. This legislation will finally hold PBMs accountable and work to restore balance to this broken system," Anderson continued. "Countless patients will benefit from this legislation, and we’re grateful to Gov. Ron DeSantis, Florida Senator Jason Brodeur and Florida Representative Linda Chaney for standing up for Floridians and fighting to put patients first."