Senate OKs bill banning vertically integrated pharmacy benefit managers from owning retail pharmacies

The Georgia Senate passed Senate Bill 91 on March 5, prohibiting pharmacy benefit managers (PBMs) that also own retail pharmacies from participating in state employee health plans unless they separate those businesses or otherwise insulate contracting so affiliated pharmacies are not favored.

Senator Dixon (sponsor, 40th/5th) said the bill targets ‘‘vertical integration’’ by PBMs that can set reimbursement rates to advantage pharmacies they own and disadvantage independent pharmacists. Supporters argued the change would level the playing field and prevent PBMs from both setting benefit rules and profiting from retail pharmacies they own.

During floor questions senators pressed sponsors about procurement and fiscal effects. Supporters said they expected large PBMs to respond by restructuring (a ‘‘Chinese wall’’ firewall) rather than abandoning bids for the state health plan, and argued the state’s large purchasing power reduces the risk that vendors would simply stop bidding. Some senators warned the change could narrow the bidder pool; proponents said the state’s contract size makes it attractive enough that vendors would adapt.

Senators discussed enforcement and whether the law could require PBMs to insulate affiliated pharmacies. Sponsors said the bill gives the state leverage in procurement to require separation or enforceable firewalls.

The Senate approved the measure 52-2. That tally met the constitutional majority required in session rules; the bill moves to the Georgia House for further consideration.

No immediate fiscal note was filed in the floor debate; several senators requested additional procurement analysis before final implementation.