Despite ‘dispensing fee’ policy concerns, pharmacy benefit manager reform sent to governor

The final version of a pharmacy benefit manager reform bill received approval from lawmakers — but some raised concerns that a policy in the legislation would increase drug costs for Hoosiers. Senate Enrolled Act 140 allows certain independent pharmacies to charge a dispensing fee for prescriptions.

Sen. Ed Charbonneau (R-Valparaiso) said the bill addresses concerns about PBMs in a variety of ways. But the dispensing fee is meant to keep independent pharmacies open — especially in rural areas.

“We are going to get to the point where we have no independent pharmacists,” Charbonneau said. “Everything goes through a CVS or one of the other PBMs that are vertically integrated. They’re steering people to their own businesses.”

Sen. Mike Young (R-Indianapolis) said he thought the point of passing PBM legislation was to lower drug costs.

“But somebody’s cost — it appears — is going to go up,” Young said. “It’s going to go up in the rural areas, not in the urban areas.”

Charbonneau said the bill tackles those drug costs by addressing PBMs through reforms, but he said independent pharmacies are going out of business at “lighting speed” and doing something to support them right now is critical.

Among other things, the bill includes reforms like requiring PBMs to ensure pharmacy benefits are “reasonably adequate and accessible.” Some reforms were removed from SEA 140, including a policy prohibiting PBMs from having any ownership interests in pharmacies and insurance companies. The policy was meant to encourage competition for PBMs, which would lower costs, according to lawmakers.

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Some lawmakers asked why state-funded health plans, like Medicaid and the state employee health plan, were excluded from some of the policies. Charbonneau said including them would cause the bill to have a fiscal impact.

“I did not want this bill to die because of a fiscal impact,” Charbonneau said. “I think the issues that we’re dealing with are way too important, and we need to take action.”

SEA 140 urges the legislative council to assign a study committee to look into the topic of contracts for pharmacy benefit coverage for state-funded programs.

The bill also requires the state personnel department to either create a PBM or contract with a PBM or other administrator for the state employee health plan. The version of the policy was originally included in legislation authored by Sen. Andy Zay (R-Huntington).

Zay said the goal of the policy is to give the state a seat at the table to negotiate pharmacy benefits for the plan and to increase competition at the “point of contract.”

Abigail is our health reporter. Contact them at [email protected].