Illinois recently joined the federal government and a growing list of states taking action against a number of pervasive and abusive Pharmacy Benefit Manager (“PBM”) practices that often result in independent pharmacies going out of business. Earlier in February 2024, Illinois introduced House Bill HB4548, which proposes PBM oversight by prohibiting various forms of unfair practices employed by PBMs including spread pricing, steering, and excessively low or below-cost reimbursement. These unfair practices are commonly used by PBMs as a method to exclude independent pharmacies from the PBMs’ pharmacy networks. To ensure that PBMs are held accountable and to increase transparency into the otherwise opaque world of PBM business practices and PBM-pharmacy contracting, H.B. 4548 applies broadly and directly to PBMs and any affiliated entity acting on the PBMs’ behalf. The Bill aims to expressly prohibit the following PBM business practices:
- Engaging in the practice of Spread Pricing;
- Steering pharmacy patients to PBM-owned or affiliated pharmacies through pricing incentives;
- Reimbursing an independent pharmacy less than what the PBM reimburses its wholly-owned or affiliated pharmacies;
- Reimbursing a pharmacy less than the reported national average drug acquisition cost (“NADAC”) or wholesale acquisition cost (“WAC”) if NADAC is unavailable;
- Payment of a minimum professional pharmacy dispensing fee of $10.49.
This Bill would also require additional annual reporting obligations for PBMs to the State as well as Plan Sponsors. H.B. 4548 was recently amended and referred on April 3, 2024 to the Illinois House Health Care Availability & Accessibility House Committee, where it is presently pending a second reading and short debate. This Bill continues a positive trend of states working to increase reasonable and fair regulation of PBMs and address some of the more concerning business practices employed by PBMs throughout the country. Bills like H.B. 4548 also aim to preserve the dwindling independent pharmacy community which has decreased over the past several years due to unsustainable reimbursement from PBMs and other anti-competitive business practices by PBMs. Independent pharmacies are crucial healthcare providers in numerous communities and numerous states throughout the country have expressed concern over the challenges facing independent pharmacies throughout country, including in Illinois as evidenced by H.B. 4548.
How Frier Levitt Can Help
Frier Levitt represents 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 to an attorney about how your pharmacy can leverage the various applicable laws and protections afforded to pharmacies that regulate PBM conduct.
