Senate committees pass bill to limit pharmacy benefit manager practices, adopt amendments

A joint hearing of the Senate Committee on Health and Human Services and the Senate Committee on Commerce and Consumer Protection voted to pass Senate Bill 1509, a measure addressing pharmacy benefit managers (PBMs), with amendments after extensive public testimony from pharmacists, patients and industry representatives.

The bill aims to increase transparency in PBM contracting and to ensure patients pay the lowest negotiated price instead of an often higher list price. Supporters described PBM practices such as spread pricing and opaque reimbursement formulas that independent pharmacies say threaten their financial viability.

Core details: the committees accepted a Senate Draft 1 incorporating amendments proposed by the Kauai Pharmacists Association (SD1) and added a defective effective date of Dec. 31, 2050, to continue legislative discussion. Committee leadership announced the chair’s recommendation to pass with amendments and the recommendation was adopted in the committee vote.

Why it matters: Speakers said the measure could prevent patients from paying artificially high copays and help keep community pharmacies solvent. "Unaffiliated pharmacies do face the same reimbursement challenges as independent pharmacies," said Tiffany Ajima of Walgreens, which testified in support. "We do strongly support this measure."

Independent pharmacists described concrete losses. "I may fill a prescription and lose $150 for a 1 month supply for a patient," said Kimberly Mikami of Molokai Drugs, who asked lawmakers to adopt pharmacist-led amendments to establish a reimbursement floor.

Corey Sanders of the Hawaii Pharmacists Association, which offered proposed amendments, testified about PBM practices: "They are operating in a black hole on purpose. . . . Something that they're doing that is being looked at across the country is what's called spread pricing." Sanders urged the committee to require clearer reimbursement rates and to protect independent community pharmacies.

Patient advocates also testified. "No one should ever have to make a decision not to get their medication because of high cost," said Chandra Kim, a Kailua resident, describing the burden for her daughter with type 1 diabetes and urging the committee to "put patient needs over corporate profits."

Opposition testimony was submitted by industry groups, including AHIP and the Hawaii Association of Health Plans, which were recorded as opposing the bill in the hearing record.

The committee record shows the measure drew dozens of written and oral testimonies, including from independent pharmacy owners, patient-advocacy groups, pharmacy associations and insurers. The committee’s action adopts policy language from the pharmacists’ SD1 and leaves a long defective date to allow continued work on technical and policy details.

The committee vote was recorded as passing with amendments; no formal motion maker or seconder was named in the transcript. The committee noted that technical amendments for consistency could be added as necessary.

The transcript does not state the next formal legislative step for SB1509 beyond the committee recommendation and the adoption of the SD1 language with the defective date.