TEXAS PHARMACY ALERT: Texas Senate Introduces Bill Prohibiting DIR Fees and Other Practices; Pharmacies Should Contact Senators Immediately

On April 12, 2021, Senator Kolkhorst, along with a bipartisan group of cosponsors, introduced SB 2195, a Bill that prohibits Pharmacy Benefit Managers (“PBMs”) operating in Texas from assessing against pharmacies a variety of different types of post point-of-sale fees, including Direct and Indirect Remuneration (“DIR Fees”) . The bill also mandates greater transparency from PBMs regarding reimbursement under the Medicaid program and prevents PBMs from terminating pharmacies for mailing prescriptions to their patients. Independent pharmacies in the State should call or write their Senator immediately, urging them to pass this important bill.  

More specifically, the bill amends and supplements several provisions in the State’s code, as follows:

  • Requiring PBMs to provide a fee schedule to all pharmacies contracted in Medicaid networks that is easily accessible and reasonably informs pharmacies of their reimbursement for a specific pharmacy benefit;
  • Prohibiting PBMs from directly or indirectly reducing the amount of a claim payment to a pharmacy after adjudication of the claim through use of an “effective rate” (sometimes referred to as “GER” or “BER”), quality assurance program or other DIR Fees;
  • Prohibiting pharmacist or pharmacy accreditation standards or recertification requirements inconsistent with, more stringent than, or in addition to federal and state requirements and disallowing PBMs from prohibiting pharmacies from dispensing any drug, including specialty drugs, unless state or federal law prevents the pharmacy from distributing the drug;
  • Preventing PBMs from requiring enrollees to use a mail order pharmacy;
  • Preventing PBMs from prohibiting pharmacies from mailing or delivering drugs to patients.

Importantly, the accreditation and mail-order provisions outlined above may not be waived in the PBM’s contract with a pharmacy. 

If enacted, the bill will provide independent pharmacies with important additional protections against PBMs’ predatory practices, including putting an end to the harmful effects that DIR (and other post point-of-sale) fees have on pharmacies, as well as other PBM tactics through which they gain a competitive edge for their own pharmacies at the expense of independent pharmacies. Texas pharmacies need to not only be aware of this important legislation but should be proactive in calling and writing their senators to express their support for the bill.

How Frier Levitt Can Help

Frier Levitt has significant experience drafting legislation and working to make sure State legislators understand the dynamics of the marketplace and the oftentimes onerous and unfair terms that PBMs impose upon pharmacies.  If your pharmacy is being subjected to abusive PBM practices, including the recoupment of unlawful DIR Fees, unreasonable and irrelevant reimbursement terms, network access issues, and other unlawful PBM tactics, contact us today.

Click here to access the Texas Senate Directory for your senator’s contact information.

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