A new legislative bill, SB1390, introduced in the Illinois Senate on January 29, 2025, aims to reform the relationship between managed care organizations and pharmacy benefit managers (PBMs) in the state’s public aid system. The bill seeks to ensure fair reimbursement practices for pharmacies, addressing long-standing concerns over transparency and compensation in the pharmaceutical supply chain.

At the heart of SB1390 is a mandate that the Illinois Department of Public Aid cannot contract with any managed care organization that employs a PBM unless the latter adheres to specific requirements. These include using a reimbursement methodology that guarantees pharmacies receive fair compensation based on either the national average drug acquisition cost or the wholesale acquisition cost, plus a professional dispensing fee. Notably, the bill prohibits PBMs from taking a cut of this dispensing fee, aiming to enhance the financial viability of local pharmacies.

The bill also stipulates that PBMs must reimburse pharmacies at the rate effective at the time of claim submission and transition to a transparent pricing model. This model would require PBMs to disclose their administrative fees, fostering greater accountability. Additionally, SB1390 restricts PBMs from imposing new pharmacy administration fees or increasing existing ones beyond inflation rates, and it protects pharmacies from contract termination solely due to the new fee structure.

The introduction of SB1390 has sparked discussions among stakeholders. Supporters argue that the bill is a crucial step toward protecting small pharmacies from predatory practices and ensuring that patients have access to affordable medications. Critics, however, warn that the bill could lead to increased costs for managed care organizations, potentially impacting the overall healthcare budget in Illinois.

As the bill progresses through the legislative process, its implications could resonate beyond pharmacy reimbursement, potentially reshaping the landscape of public aid in Illinois. Experts suggest that if passed, SB1390 could serve as a model for other states grappling with similar issues in the healthcare system, emphasizing the need for transparency and fairness in pharmaceutical pricing. The next steps will involve committee reviews and potential amendments, as lawmakers weigh the balance between cost control and equitable access to pharmacy services.