Oklahoma Senate Committee Advances Reforms Targeting Pharmacy Benefit Managers

OKLAHOMA CITY — The Senate Business and Insurance Committee, led by Sen. Bill Coleman, R-Ponca City, passed four bills on Thursday to crack down on unfair practices by pharmacy benefit managers and address inequities between PBMs and independent pharmacies.

PBMs are middlemen that manage prescription drug benefits for insurance companies and employers by negotiating prices and reimbursement rates between pharmacies and insurers. Their profit-driven motives can imperil independent pharmacists that are not vertically integrated with PBMs and increase costs for patients. 

Sen. Coleman; Sen. Jerry Alvord, R-Wilson; Sen. Darcy Jech, R-Kingfisher; Sen. Todd Gollihare, R-Kellyville; and Sen. Jonathan Wingard, R-Ada, issued the following joint statement on the bills passed out of the committee:

"Large, out-of-state pharmacy benefit managers are driving independent pharmacists out of business. These reforms to level the playing field are essential to protect local, independent pharmacies, which are a fixture in so many Oklahoma communities. In many small cities and towns, independent pharmacies are the only option for residents. Unfortunately, when one independent pharmacy closes, it creates a ripple effect that disrupts the entire local health care system. PBMs have centered their businesses on unfair billing, reimbursement and other practices that intentionally give their chain pharmacies an advantage over local pharmacists. These bills build on previous reforms passed by the Oklahoma Legislature to defend the local pharmacists who help keep Oklahoma families happy and healthy.”

Senator Coleman added that he commends his colleagues’ hard work on this critical and urgent issue.

The Senate Business and Insurance Committee passed the following bills addressing PBMs:

SB 2074 (Sen. Jerry Alvord) makes several changes, including stipulating that PBMs cannot reimburse providers for a prescription drug or pharmacy service in an amount less than the national drug acquisition cost plus a professional dispensing fee that is no less than the Medicaid rate.

SB 1500 (Sen. Darcy Jech) is intended to level the playing field for independent pharmacies – both urban and rural. It will ensure that these pharmacies are paid in a predictable, transparent, and timely manner. There are penalties that would apply to those Pharmacy Benefit Managers who violate the provisions of the law that would be enforced by the Oklahoma Attorney General’s PBM task force.

SB 1447 (Sen. Todd Gollihare) adds safeguards to the Oklahoma Employee Insurance Plan by enacting restrictions on contracts with pharmacy benefit managers that have a record of being bad actors. This includes a prohibition on awarding contracts to PBMs that have settled a lawsuit, been fined or had to pay a judgment of over $4 million in the last five years.

SB 2007 (Sen. Jonathan Wingard) aims to reduce the time community pharmacies spend negotiating reimbursement rates with PBMs. It requires PBMs to pay an administrative fee to providers if they lower a reimbursement rate within 30 days of a PBM reimbursement increase as a result of an appeal.