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PBM reform bill draws split testimony: community pharmacies support transparency; insurers and PBMs warn of higher drug costs
Summary
Senate Bill 316, sponsored by Sen. Wynne, would expand oversight and change compensation and reporting requirements for pharmacy benefit managers (PBMs); witnesses from community pharmacies supported transparency while PBMs, health plans and researchers testified the bill could raise premiums and drug costs.
Senator Rochelle Wynne introduced Senate Bill 316 as a measure to expand oversight of pharmacy benefit managers (PBMs), prohibit certain practices and adjust compensation and fiscal practices for PBMs. Wynne said her office worked on amendments intended to remove fiscal impacts for certain public entities and to narrow the bill’s scope.
Support came from community pharmacies and clinician groups. Liz MacMennamin of the Veil Association in Nevada (community pharmacies) said, “we strongly support this bill.” Jennifer Lanahan of the Nevada Pharmacy Alliance and Paige Barnes of the Fratto Company (on behalf of the Nevada Society for Dermatology and Dermatologic Surgery) also testified in support, saying the bill increases transparency and patient protections.
Several industry groups and PBM‑opposed witnesses offered detailed fiscal and economic warnings. Duane Young, state director for government affairs for CVS Health in Nevada and a former DHCFP deputy administrator, said the bill’s elimination of pay‑for‑performance contracting would remove a tool PBMs use to pressure manufacturers and could increase insurance premiums. He cited external economic estimates and estimated a $3–$5 per member per month premium increase for fully insured Nevadans.
Economists and health‑plan representatives amplified that concern. Dr. Amanda Frost (PCMA, Head of Research) and economist Ike Brannon testified that delinking rebates from PBM compensation would likely increase drug list prices and reduce rebates, leading to higher net drug spending for payers and employers and possibly higher premiums. They cited modeling that projects large national impacts and applied analysis to Nevada.
The Division of Insurance testified that implementation would require staff and contractor support; its initial fiscal note estimated roughly $960,000 per biennium for positions and support under an earlier draft. Some municipal entities (city of Henderson, Clark County, Washoe County) told the committee they had modified or removed fiscal notes after sponsor amendments that excluded self‑funded plans and certain local entities.
Committee members asked for clarification of amendments and the sponsor said additional changes had removed many fiscal impacts; the matter remained in committee for further review.
Ending: SB 316 prompted sharply divided testimony: pharmacy owners and medical groups urged transparency and patient protections; PBMs, health plans and economists warned the changes could raise drug costs and premiums if rebate and contracting structures are disrupted.
