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News & Press: State Legislation

UPDATE: ESSB 5857 - Pharmacy Benefit Manager Regulation

Friday, July 17, 2015   (0 Comments)
Posted by: Kathleen Goodner
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After a long hard fight, we have lost ESSB 5857, Pharmacy Benefit Manager Regulation.

Thank you to those who responded to the LRAC Action Alerts asking you to contact your legislators.

Ultimately, we lost the bill due to the PBMs convincing the unions that the bill’s appeal section will increase costs to the Trusts (the entity that negotiates and manages the union’s health care contracts). The unions came in late in the process, not fully understanding the impetus of the bill. Their national Trusts started weighing in due to the efforts from the National Pharmaceutical Benefit Managers Association (PCMA.) The unions are a very powerful force with the House Democrats and because they expressed their opposition, the Democrat leadership dropped the bill.

LRAC has already made efforts to engage the unions and come to a compromise. They have agreed to meet with us to see if we can work on some language that addresses their concerns and gives them protection so that we can move forward in 2016.

LRAC/WSPA and its membership put in a lot of hard work this year on this bill. Due to our efforts, an increased number of lawmakers and the Office of Insurance Commissioner continue to learn more about PBMs and their unfair business practices.

This momentum has also piqued the interest of the Insurance Commissioner. Apparently, more benefit manager issues are popping up. For example, due to their business model reflecting that of the PBM’s, the Radiology Benefit Manager (RBM) has been causing the same issues with Radiologists. However, there was a bill that was introduced this year that is modeled after our 2014 PBM bill. The final product resulted in a simple registration fee for the RBMs that operate in Washington State. There is still a lot of work to be done on the PBM issue, but we are gradually gaining ground.

While our bill did not pass, we did garner enough attention for work to continue during the interim. There was a section in our bill that created a taskforce. The Joint Select Health Care Committee will be looking at interim planning for the next few months and will look into benefit managers as a whole.

Section 6 of 4ESSB 5857: The Joint Select Committee on Health Care Oversight must convene a stakeholder work group comprised of participants in the prescription drug delivery chain, including pharmacy benefit managers, drug manufacturers, wholesalers, pharmacy service administrative organizations, pharmacies, health plans, and other payors.

The work group assignments may include, but are not limited to the following:

  1. Review the entire drug supply chain including plan and pharmacy benefit manager reimbursements to network pharmacies, wholesaler or pharmacy service administrative organization prices to network pharmacies, and drug manufacturer prices to network pharmacies;
  2. Discuss suggestions that recognize the unique nature of small pharmacies and possible options that support a viable business model that do not increase the cost of pharmacy products;
  3. Review the availability of all drugs on the list and list prices for pharmacies;
  4. Review the phone contacts and standards for response times and availability;
  5. Review the pharmacy acquisition cost from national or regional wholesalers that serve pharmacies in Washington, and consider when or whether to make an adjustment and under what standards. The review may assess the timing of pharmacy purchases of products and the relative risk of list price changes related to the timing of dispensing the products.

The Joint Select Committee on Health Care Oversight will meet July 22nd in Olympia for its interim planning session. This PBM issue is expected to be part of their interim activity.

Again, thank you to those of you who took the time to contact your legislators and actively engaged in this year’s sessions. If you are still experiencing significant losses to your pharmacy and your patients are being impacted, please continue to keep your legislator aware. We will be back next year and we need to keep this bill in the forefront of their minds. The 2016 legislative session will be a short 60 days, so the work we do during this interim will pave our way next year.


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