Illinois SB 2008 Would Protect Pharmacies and Offer Enhanced Maximum Allowable Cost (MAC) Protections

A bipartisan piece of legislation aimed at regulating Pharmacy Benefit Managers (PBMs) in Illinois is working its way through the State’s legislature. Senate Bill (SB) 2008 was recently up for debate in Illinois and offers significant additional protections to independent pharmacies operating in Illinois including protections against predatory pricing tactics such as excessively low Maximum Allowable Cost (MAC). SB 2008 seeks to bolster current Illinois laws and reflects some of the challenges that independent pharmacies face in dealing with PBMs.

Illinois’ current laws governing MAC reimbursement establish an appeal process by which a pharmacy can appeal PBM reimbursement for a drug subject to MAC pricing. That process includes requirements that if an appeal is “sustained, the [PBM] must make an adjustment in the drug price effective the date the challenge is resolved and make the adjustment applicable to all similarly situated network pharmacy providers[.]” Illinois’ current laws further provide that in the event “an appeal is denied, the [PBM] must provide the reason for the denial” but it falls short of giving a pharmacy meaningful information as to where they can acquire such drugs at a price in line with PBMs’ MAC prices.  

SB 2008 seeks to bolster Illinois’ current laws by amending the laws to require “a reasonable administrative appeal procedure to allow contracted pharmacies to challenge [MAC] and reimbursements made under a [MAC] for a specific pharmaceutical product . . . as . . . being below the pharmacy acquisition cost.” If enacted, the law would further require that in the event an appeal is denied, the [PBM] must provide the reason for the denial and the name and the [NDC] number from national or regional wholesalers operating in Illinois that have the pharmaceutical product currently in stock at a price below the [MAC] list. If the [NDC] number provided by the [PBM] is not available below the pharmacy acquisition cost from the pharmaceutical wholesaler from whom the pharmacy or pharmacist purchases the majority of prescription pharmaceutical products for resale, then the [PBM] shall adjust the [MAC] list above the challenging pharmacy’s pharmacy acquisition cost and permit the pharmacy to reverse and rebill each claim affected by the inability to procure the pharmaceutical product at a cost that is equal to or less than the previously challenged [MAC].

These proposed amendments are significant because they further limit the ability of PBMs to deny MAC appeals for illegitimate reasons or otherwise leave a pharmacy in the dark as to where it can acquire the drugs at a better price. Illinois pharmacies and pharmacists should follow this law and encourage its enactment but also ensure they are taking advantage of the protections afforded under their contracts and current laws, rules, and regulations governing PBMs relationships with pharmacies at both the federal and state level.  

How Frier Levitt Can Help

Frier Levitt represents numerous pharmacies across the United States in challenging PBM audits, network access, reimbursement practices and has extensive knowledge on all aspects of the pharmacy-PBM relationship. Contact us today to speak with an attorney about how your pharmacy can leverage the various laws and protections afforded to pharmacies, including Illinois’ current PBM laws as well as the additional protections provided under SB 2008 if enacted.