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Wide testimony for and against PBM reform bill as Montana committee hears HB 740
Summary
Representative Marta Bertoglio told the Senate Judiciary Committee HB 740 would shift pharmacy reimbursement to an NAIDAC cost-plus model with higher dispensing fees to protect independent pharmacies; dozens of independent pharmacists and healthcare providers supported it while insurers, PBMs, and labor groups warned it would raise premiums and conflict with ERISA and worker compensation law.
Representative Marta Bertoglio opened the committee hearing on House Bill 740, framing it as a response to declining reimbursements from pharmacy benefit managers (PBMs) and closures of independent pharmacies in rural Montana. She asked lawmakers to adopt NAIDAC (national average drug acquisition cost)-based pricing and a higher dispensing fee to make community pharmacies financially viable and preserve local access to medications.
Proponents included many independent pharmacists, Montana Family Pharmacies representatives and rural healthcare providers who cited concrete local impacts: closures of community pharmacies, daily negative reimbursements, and patient-safety concerns when mail-order specialty pharmacies are forced on rural patients. Witnesses supplied petitions, letters of support and studies (including a Washington State study) suggesting employer costs and PBM spread-pricing distortions.
Opponents — including Blue Cross Blue Shield, AHIP, PBM trade association representatives, large insurers, GoodRx, and labor representatives — warned the bill sets minimum reimbursements and dispensing fees that would raise premiums, increase out-of-pocket costs for some consumers, and risk preemption for ERISA self-funded plans. Blue Cross presented quick estimates of added annual costs (tens of millions) and urged data-driven study before major market intervention. PBM representatives and insurers argued many solutions should be negotiated in the interim with stakeholders.
Witnesses and committee members discussed an amendment being drafted to narrow the bill’s scope (for example limiting coverage to independent pharmacies and excluding the state plan or workers’ compensation), and debated whether the bill’s proposed dispensing-fee schedule reflected current Montana Medicaid rates. Fiscal consequences for the state plan and public employers were a major theme; the Department of Administration representative said the bill, as drafted, would affect state PBM contracts and could have fiscal implications unless amended. The committee closed the hearing with sponsor commitment to work on amendments.
