Florida Enacts Long-Awaited PBM Transparency and Accountability Bill into Law
Florida-based pharmacies and pharmacists have reason to rejoice following the signing of historic pharmacy benefit manager (“PBM”) legislation into law in Florida. Specifically, on May 3, 2023, Governor DeSantis approved Senate Bill 1550 (“SB 1550”), formally enacting the bill into law. Florida joins a host of legislative activity throughout the country both at the federal and state levels, aimed at curbing previously unchecked PBM abuses. Governor DeSantis’s action comes approximately one month after the United States Senate Committee on Finance conducted the bipartisan hearing “[PBMs] and the Prescription Drug Supply Chain: Impact on Patients and Taxpayers” (held on March 30, 2023) and approximately two weeks after Committee Chairman Senator Ron Wyden and Ranking Member Senator Mike Crapo released their Legislative Framework to Address PBMs and Prescription Drug Supply Chain.
Florida’s new law is designed to lower the costs of prescriptions for patients and increase PBM transparency and accountability. Included among the provisions of SB 1550 are three main objectives:
- Protecting patients and consumers,
- Protecting small businesses including independent, community pharmacies, and
- Providing reasonable oversight of PBMs.
SB 1550 addresses concerns arising from PBM conduct in Florida in the following ways:
SB 1550 Helps to Protect Patients and Consumers
- PBMs are prohibited from mandating consumers to use a mail-order pharmacy, but allow consumers to opt-in to this service if, and only if, preferred by the patient.
- PBMs are prohibited from establishing mandatory networks comprised exclusively of PBM affiliated pharmacies.
SB 1550 Protects Small Businesses, Including Independent Pharmacies
- PBMs are prohibited from instituting networks that require a pharmacy to meet more stringent standards than required by state law and federal law.
- PBMs are prevented from imposing surprise fees and clawbacks, including direct or indirect renumeration fees (“DIR fees”) often unilaterally imposed by PBMs.
- PBMs are prohibited from engaging in the practice of “spread pricing” whereby PBMs surreptitiously charge plans one amount (higher) and reimburse pharmacies a separate (lower) amount while the PBM retains the difference.
Licensing Requirements for PBMs with Oversight by Office of Insurance
- PBMs are required to obtain certificates of authority to conduct business in Florida by January 1, 2024.
- PBMs must disclose all affiliated organizations, including affiliated pharmacies.
- PBMs must disclose all complaints, settlements, or discipline to which they have been a party in any state.
- The Office of Insurance Regulation is directed to discipline PBMs that violate state law and hold them accountable.
SB 1550 is a positive and significant development for patients and providers in Florida and represents a significant legislative accomplishment which will help to limit PBMs’ ability to engage in certain improper business practices that cause significant issues for patients and providers throughout the country. Pharmacies, pharmacists, and patients should become familiar with the law which takes effect on July 1, 2023 and learn how the new law can help them to more effectively navigate the complex pharmacy-PBM landscape.
How Frier Levitt Can Help
Frier Levitt represents numerous pharmacies across the United States in challenging PBM audits, network access, reimbursement practices and other complex issues such as DIR fees. Our attorneys have extensive knowledge in all aspects of the pharmacy-PBM relationship. Contact us to speak with an attorney about how your pharmacy can leverage the various applicable laws and protections afforded to pharmacies that regulate PBM conduct.