NCPA Advocates Before Key Insurance Regulators for Transparency, Patient Access

The National Community Pharmacists Association was recently invited to provide testimony to the Regulatory Framework Task Force of the National Association of Insurance Commissioners at their national convention in New Orleans, La.

PRESS RELEASEALEXANDRIA, Va. - The National Community Pharmacists Association (NCPA) was recently invited to provide testimony to the Regulatory Framework (B) Task Force of the National Association of Insurance Commissioners (NAIC) at their national convention in New Orleans, La.

This committee has been charged with considering revisions to NAIC’s Health Carrier Prescription Drug Benefit Management Model Act - Model #22 model legislation.

Many states are currently questioning and debating who oversees Pharmacy Benefit Managers (PBMs), and NCPA’s testimony emphasized the need for oversight and enforcement authority over PBMs by state departments of insurance. NCPA also stressed the need for transparency, patient access, and enforcement provisions in any model legislation.

“State departments of insurance exist to protect consumers, the public interest, and the state’s economy through fair and efficient regulation of the insurance industry,” said Matthew DiLoreto, NCPA Senior Director of State Government Affairs, testifying on behalf of the association. DiLoreto further noted, “

Yet, PBMs—a handful of extremely influential and profitable — but largely unregulated entities responsible for creating, administering and profiting from the prescription drug insurance benefit for roughly 95 percent of all Americans—are somehow not required to register with the department of insurance in many states

.”

DiLoreto emphasized the fact that PBMs effectively control every aspect of the prescription drug benefit while all other impacted parties (providers, plans, beneficiaries) have virtually no transparency or influence into how that benefit is managed. Yet, PBMs continue to operate without having to answer to any regulatory entity.

DiLoreto made the following points:

  • Three large corporations dominate that marketplace: Express Scripts®, CVSHealth®, and OptumRx®. In total, these companies cover more than 180 million patient lives in the United States, or roughly 78 percent of Americans whose pharmacy insurance benefits are managed by a PBM.
  • PBMs are not subject to federal or state industry-wide regulations similar to those that apply to large commercial health insurers.
  • Where limited state regulation does exist, it is more often than not met with endless resistance by the PBM industry.
  • It is important for both plans and providers to know what the PBM is billing and reimbursing for products or services, and whether the plan is being charged a higher amount for the same drug by the PBM than what is being reimbursed to the provider.
  • All beneficiaries should have access to the pharmacy of their choice as long as that pharmacy is willing to accept a network contract’s terms and conditions.

DiLoreto further highlighted PBMs’ lack of compliance with existing state laws stating, “I will simply note that, time and again, the PBM industry has ignored compliance in the absence of real enforcement efforts. It is unfortunate, but the message that the PBM industry is conveying is clear: ‘We will not abide by the law, unless you make us do so.’”

He concluded “ NCPA recommends that NAIC include language in the final amendment to Model #22 Act that would clearly grant departments of insurance with PBM oversight authority, require PBMs to provide additional transparency into the prescription drug benefit programs that they manage, and establish reasonable access standards for PBM-controlled prescription drug programs that protect beneficiaries.”

This testimony follows written

recommendations

NCPA submitted to NAIC in January. NCPA will continue to stay closely involved with NAIC’s development of its updated Model #22 Act and sincerely thanks NAIC for inviting NCPA to voice community retail pharmacies’ recommendations and concerns on this extremely important issue.