Committee advances pharmacy‑pricing transparency bill after hours of testimony over PBM practices and fiscal shift
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Summary
The committee passed HB 527 (third substitute), a pharmacy‑pricing transparency measure that requires PBMs to provide appeals contact details and price data to pharmacies and gives the insurance commissioner enforcement authority; PBMs and union and pharmacy representatives sharply debated whether the bill improperly shifts costs to state employees and how appeals data should be handled.
Representative Hall told the committee HB 527 (third substitute) responds to concerns from independent pharmacies that pharmacy benefit managers (PBMs) sometimes deny appeals and do not provide sufficient price‑source information to justify reimbursement ceilings. The substitute adds transparency requirements: a contact phone number, email and website for appeals; provision of PBM price lists or cost sources used to set maximum allowable cost (MAC) lists; and an enforcement role for the state insurance commissioner.
Sheldon Birch, owner of multiple independent pharmacies, told the committee that a sample data set of roughly 2,000 appeals produced only about 10 approvals, illustrating what he described as a broken appeals process. "We have submitted almost 2,000 pricing appeals in this data. Ten of them were approved," Birch said.
PBM witnesses acknowledged the problem of imperfect national pricing benchmarks and described steps toward more transparent processes and cost‑plus contracts for some pharmacies. Eric Cannon, representing Scripius (the PBM owned by SelectHealth/Intermountain Healthcare), said his firm has cost‑plus agreements in parts of the state and that PBMs use national purchasing data (NADAC and others) and averaged benchmarks to set MAC lists, which can yield imperfect results for particular pharmacies. Dr. Lougina Mendez Harper of Prime Therapeutics said the amended language provides more transparency and appeals enhancements but warned PBMs lack access to individual pharmacies’ wholesale contracts, which complicates promises to show a specific wholesaler price.
A major point of contention was the bill’s fiscal handling. Sen. Johnson and public‑employee representatives warned that the third substitute shifts cost to PEHP (state employee plan) by directing the plan to adjust premiums rather than specifying an appropriation. PBM witnesses and PEHP representatives argued that directing premium changes by statute is an unprecedented cost shift onto state employees and may obscure the bill’s true fiscal impact. Representative Hall said she was working with the Senate sponsor to address the fiscal‑note mechanics.
After extensive testimony from independent pharmacists, trade associations and PBMs, the committee voted to favorably recommend HB 527 to the full Senate (transcript records the recommendation passed with a 2–1 tally, Sen. Johnson recorded as the no vote). Sponsors said they will continue to negotiate fiscal‑note language and implementation details before floor action.