How Does the Lack of PBM Regulation Affect Specialty Pharmacies?

Jesse C. Dresser, JD, Partner, Frier & Levitt, LLC, speaks about the regulation of pharmacy benefit managers and how it can impact specialty pharmacy operations.

Jesse C. Dresser: PBMs, unlike health plans, don’t have the same level of state regulation or federal regulation. So, in the federal space, you have Part D plans that are regulated by Medicare. On the state level, insurance plans are regulated by the department of banking insurance in many states. With PBMs, they’re kind of in the middle. They’re these intermediaries that have somewhat of a relationship with either part D plan sponsors or health insurance companies, but many states don’t have their own set of rules that apply to them.

As a result, they’re able to do a lot of things because there isn’t a clear chain of authority, clear jurisdiction over their behavior, and one of the ways that we’ve seen that happen the most is in states that don’t have strong laws that benefit pharmacies, whether they be fair audit laws, whether they be Any Willing Provider or prompt pay laws, for example in Florida, that doesn’t have an Any Willing Provider law, PBMs are able to use that as a basis to deny pharmacies access to the network because they aren’t challenged or checked in some way by the existence of one of those strong Any Willing Provider laws.