Committee advances HB 1584 to fund pharmacy benefit manager enforcement unit

The Appropriations - Government Operations Division on Thursday advanced House Bill 1584 as amended, creating a new Pharmacy Benefit Manager Enforcement Fund, authorizing up to $1.2 million per biennium to the insurance commissioner to staff an enforcement unit, and directing an actuarial analysis of the bill’s effect on health insurance premiums and consumer drug prices.

The bill’s appropriations language would authorize up to $1,200,000 per biennium to the state Insurance Department to hire three full-time positions — an attorney, a pharmacist and an investigator — to carry out enforcement described elsewhere in the measure. Section 10 would create the new Pharmacy Benefit Manager Enforcement Fund to receive fees paid by pharmacy wholesalers and virtual wholesalers; section 12 would transfer the balance of the existing Drug Pricing Fund into the new account (the transfer amount was not specified in the committee record); section 13 contains the appropriation for the enforcement unit.

Committee members framed their role as appropriators, not policy drafters, and emphasized that the panel’s focus was funding and administration rather than the broader policy choices in the bill. One committee member said appropriators should avoid “getting into the weeds” on policy and noted that policy disagreements would most likely be handled by the Industry and Business Committee in any conference committee.

Senator Dwyer, who spoke during the debate, said the bill presents “really good arguments on both sides” but that he would vote to move the measure so the Legislature could continue work on it in the appropriations process and on the floor. The committee and staff also discussed uncertainty about how many complaints or what level of resources the new enforcement program might require; members said the new fund could be a source for additional dollars if the emergency budget process is later used to supply more resources.

Committee action included a motion to adopt amendment version 02005 and a subsequent motion to give the bill a “do pass” recommendation as amended. Senator Sickler moved the amendment; Senator Eberly seconded the amendment motion. The committee then approved a do-pass recommendation as amended; Senator Sickler moved the do-pass and Senator Herbley seconded. Both the amendment and the do-pass recommendation passed on unanimous committee votes recorded as 5-0.

Next steps noted in the meeting: the bill will go to the full Appropriations Committee and then to the floor. Several members said policy issues remaining in the bill could require further work in a conference committee, where the Industry and Business Committee would likely participate.

Votes at a glance - Motion to adopt amendment version 02005 (to HB 1584): Moved by Senator Sickler; seconded by Senator Eberly. Outcome: approved by committee (recorded as unanimous Aye votes). - Motion for a do-pass recommendation on HB 1584, as amended: Moved by Senator Sickler; seconded by Senator Herbley. Outcome: approved 5-0.

Background and context: The amendments considered by the appropriations panel start in Section 10 of the bill and deal primarily with funding and administration for PBM enforcement. The bill requires an actuarial study of how the enacted policies would affect premiums and drug prices and relies on fees from pharmacy wholesalers and virtual wholesalers rather than a general-fund appropriation for the initial staffing described in the bill.

The committee adjourned after completing the action; members indicated leadership asked the panel not to release some other budget items at this time and that they may convene again if necessary.