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Fox in the henhouse?

Under current law, Mississippi Department of Insurance Commissioner Mike Chaney has the authority to regulate pharmacy benefit managers.

The only problem is, the statute doesn’t provide much actual authority. Neither does a bill that is in conference committee that transfers that same weak regulatory authority to the Mississippi Board of Pharmacy.

The first few thousand words in Senate Bill 2445 extends the repealer of the Board, but afterward includes language that has one organization that represents pharmacy benefit managers and making barnyard-themed accusations.

“Letting pharmacists regulate those who negotiate their payments is a conflict of interest and will increase healthcare costs for consumers and employers,” read a statement from Mark Merritt, president and CEO of Pharmaceutical Care and Management Association, which has unleashed a nationwide advertising campaign aimed at stopping the legislation. If the bill that makes it out of conference contains the transfer language, Mississippi would become the first state in which PBMs are regulated by the Board of Pharmacy. “This ad campaign should give Mississippi legislators second thoughts about passing a law that lets the ‘fox guard the henhouse’ and in turn undermines healthcare cost savings for consumers and employers.”

Technically speaking …

Technically, PBMs are already required to register with Chaney’s office. The issue is with enforcement, because there is no penalty for them not doing so.

“We have no way to regulate them,” Chaney said in an interview last week. “We had four that registered with our department. We have no way to find them. We have no teeth in the law. We wrote a letter (to lawmakers) saying either give us the authority or move it to the Board of Pharmacy. We have no problem with moving it to the Board of Pharmacy, as long as somebody has some real authority to watch over these PBMs.”

Frank Gammill, executive director of the Board of Pharmacy, said the number of PBMs operating in Mississippi ranges from a dozen, to 200, to 400 “depending on who you ask. They have free will to do anything basically. Public health and pharmaceutical care are being compromised.

“It’s so much opportunity for PBMs to circumvent and do things outside of the purview of the Department of Health that (the Department of Insurance) is not equipped to see,” Gammill continued. “Pharmacists know what PBMs do. They know all the little ways of deception. It’s a pharmacy health issue and pharmacists ought to have some purview in what’s being done. As it is now, the Board of Pharmacy has none.”

About who has the power

Chaney

Chaney

For his part, Chaney’s concern lies more with the amount of authority, rather than who has it, in policing PBMs.

“The bill in its current form does not provide any sufficient authority to either us or the Board of Pharmacy to actually regulate these people,” he said. “We’re fine with regulating them here if we had the authority to find them and to make them register with our agency, and then we could do financial examinations that we’re required to do. The intent of the letter was not that we were unwilling to regulate the PBMs. We simply said we don’t have the authority. In my personal opinion, it would be wrong to let the Board of Pharmacy operate it if they don’t do it in good faith. There are real concerns that the bill would increase cost to consumers, and there is no other state where the Pharmacy Board regulates the PBMs. We would be the first one. The bottom line is this: We’re willing to regulate the PBMs if we have the proper authority to regulate them. Right now I can’t do anything to them.”

Gammill called the PCMA’s assertion that the Board of Pharmacy having oversight of PBMs akin to a fox guarding the henhouse “a smokescreen. They have been running free reign in our state, and we’ve called attention to them. They don’t want any part of the Board of Pharmacy because we know what they’re up to and what they do.”

Room for discussion

Rep. Steve Holland, D-Plantersville, whose Public Health and Human Services Committee sent the bill to the House floor and who is one of the bill’s conferees, said last week there was “some room for discussion” as to who would ultimately regulate the PBMs.

“What degree of registration and regulation are we talking about? Bottom line is, we’re in conference and the ultimate outcome will be that the Pharmacy Board will have some regulation and oversight over these PBMs,” Holland said. “We’re just going to haggle over the degree. But the PBMs have been a little egotistical and cavalier about this. They need to let the independent pharmacists know they’re their friends.”

Gammill said if the version of the bill that makes it out of conference does not contain language that penalizes PBMs for not registering and paying the maximum-allowed $2,500 registration fee, and does not provide for penalties for those that don’t submit to financial audits, the Board of Pharmacy would push next legislative session for a bill that does.

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About Clay Chandler

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