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Pharmacy benefit manager bill goes to governor


FRANKFORT, Ky. (April 3, 2018) – The state Senate gave final passage today to a bill intended to ensure independent pharmacists are fairly reimbursed for filling prescriptions of Medicaid recipients.

Senate Bill 5, as amended by the House, would make the Kentucky Department for Medicaid Services in charge of setting the reimbursement rates for a pharmacist. The rate is currently set by pharmacy-benefit managers (PBMs) hired by the state’s Medicaid managed-care organizations (MCOs).

“As many of you know, the Kentucky legislature has spent an inordinate amount of time over the past several sessions of the General Assembly trying to play the role of policeman between PBMs and pharmacists,” said Sen. Max Wise, R-Campbellsville, who sponsored the legislation. “The (amendment) gives the Kentucky Medicaid department clear authority to police pricing terms and contracts while we are not in session.”

He said Kentucky Medicaid spends $1.7 billion annually on prescriptions and SB 5 would help authorities track that money and determine whether locally-owned pharmacies were being reimbursed fairly.

Another provision would allow the state Medicaid and insurance departments to issue penalties if a PBM fails to comply with the legislation.

“This bill … truly is a very transparent bill,” Wise said, adding SB 5 may become a model for the nation.

Independent pharmacies in several states have claimed in recent months that PBMs owned by national pharmacy chains are not fairly reimbursing them. The dominate PBM in Kentucky, for example, is only paying independent pharmacists a professional dispensing fee of 85 cents per prescription, Wise said. The Centers for Medicare and Medicaid Services states that fee should be around $10.64, plus the cost of the drug being dispensed.

The measure passed by a 37-0 vote.