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Senate delays PBM reform bill after pharmacists present appeals, transparency concerns
Summary
Senate Bill 173, aimed at regulating pharmacy benefit manager reimbursements and establishing appeals and dispensing‑fee provisions, was voluntarily deferred after extended testimony from independent pharmacists about appeals workload and transparency; the author agreed to continue negotiations with PBM representatives and the Department of Insur
Senate Bill 173, from Senator Jackson Andrews, which would set requirements for reimbursement rates paid by pharmacy benefit managers (PBMs), was voluntarily deferred by the Senate Insurance Committee on May 21 after extended testimony from independent pharmacists and Department of Insurance staff and a commitment by PBM representatives to continue negotiations.
Senator Jackson Andrews opened the item saying the bill "offers relief for our independent pharmacists" and addresses a dispensing fee and an appeals process when pharmacies are paid below cost. Independent pharmacists described persistent operational pressure from PBM reimbursement practices.
Dana Antoon of Chanel Drugs said pharmacy service administrative organizations (PSAOs) have "zero negotiating power" in many cases and described an appeals process she said can require 10–15 minutes per prescription and occur for roughly 30 prescriptions per day per store. "If the PBM denies that appeal, I then have to go and file a complaint with the Louisiana Department of Insurance," she said, and added that even if an appeal is approved the payment can revert to the prior lower rate the next month, forcing repeated appeals.
Pamela Layton of Layton Family Pharmacy said pharmacies are often "upside down" when reimbursements for certain brand drugs are paid below acquisition cost and urged lawmakers to consider workforce and rural access implications. Don Caffrey of the Louisiana Independent Pharmacies Association described the bill's two principal parts: a dispensing‑fee provision and an appeals/transparency mechanism modeled on a maximum allowable cost (MAC) approach, which would require PBMs to notify similarly situated pharmacies when an appeal results in an updated reimbursement.
Frank Opelka of the Department of Insurance said the agency has been working on rules to smooth implementation and that the broader challenge includes market segmentation: some of the practices pharmacists complain about occur in ERISA/self‑funded and government benefit markets that state law does not directly regulate. Opelka and committee actuaries noted similar reforms in other states have led to premium impacts in the regulated market; the committee's fiscal note reflected an actuarial estimate discussed in the hearing.
Senators asked questions about wholesalers, pharmacy ownership of wholesalers, PSAO consolidation, and whether the bill's dispensing‑fee language was premature without an Office of Group Benefits (OGB) report required by prior law. Don Caffrey and other witnesses said they were willing to work on the dispensing‑fee language and highlighted the appeals/transparency provision (cited in the bill as similar to RS 22:1865 language) as a priority for independent pharmacies.
At the author’s request, and after the sponsor and PBM representatives committed to further negotiation, the committee voluntarily deferred Senate Bill 173 to allow continued discussion and potential agreement before the bill is taken up again.
