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PBM accountability bill draws wide debate: sponsors seek transparency, industry warns of higher premiums and ERISA conflicts
Summary
SB 478 would ban spread pricing, delink PBM compensation from list price and require confidential plan-level reporting; patient groups and some industry representatives supported the reforms for affordability and clarity, while insurers, PBMs and hospitals warned of legal, operational and fiscal risks and asked for technical changes.
Senate Bill 478 would require significant changes to pharmacy-benefit management practices in New Hampshire: prohibit spread pricing (PBM charging plans more than reimbursing pharmacies), delink PBM compensation from drug list price and rebate magnitude, require confidential reporting to the insurance department, strengthen maximum-allowable-cost (MAC) transparency and protect 340B nondiscrimination.
Sponsor Senator Tim McHugh framed the effort as restoring transparency and directing savings to patients: delinking compensation would ensure PBMs are paid for services rather than as a function of drug list price and rebates. Representative Julie Miles and patient advocacy groups (Epilepsy Foundation, Lupus Foundation) said the reforms would reduce counter prices for essential medications and protect patients who must take multiple high-cost drugs.
Industry witnesses raised multiple concerns: insurers and PBMs warned the proposal could raise premiums if manufacturer rebates or negotiation dynamics change; national PBM groups warned that the proposal could conflict with ERISA (federal preemption) if it reaches self-funded plans; hospitals and 340B participants said additional reporting requirements could be costly and complicate participation. Several witnesses pointed to New Mexico's experience, where similar legislation generated a large fiscal note for the state employee plan based on anticipated changes to rebates.
Regulatory agencies flagged technical drafting issues (definitions, interaction with existing statutes such as RSA 402-N and managed-care rules), and the Insurance Department offered to work with sponsors on precision, reporting cadence and scope (suggesting six- or 12-month reporting windows and clarifying which plans are in scope). Sponsors indicated willingness to negotiate amendments to address preemption and technical problems.
No final committee vote was recorded at the hearing; testimony closed with strong agreement to continue drafting work with the Insurance Department and stakeholders.
