Wisconsin Assembly Passes Bill Targeting Drug Prices

MADISON, Wis. (CN) – The Wisconsin State Assembly on Tuesday unanimously passed legislation targeting prescription drug prices and seeking to bolster protections and transparency in the market chain that determines which drugs are available where and at what price.

The bill’s passage through the Assembly is the state’s first step towards answering what has turned into a nationwide chorus calling for mitigation of rapidly increasing drug prices and barriers the sick are faced with in getting their prescription medications.

Of particular focus in the bill, which had over 100 co-sponsors and bipartisan support, are the interactions pharmacies and patients have with pharmacy benefit managers, or PBMs. These managers are essentially middlemen administrating drug benefit programs, which are in charge of, among other things, processing claims and negotiating drug prices for insurance companies and employers.

Under the current health care system, drug companies, health care providers and PBMs all benefit from the meteoric rise in drug prices without much transparency.

Tuesday’s bill requires PBMs to register with the Wisconsin Office of the Commissioner of Insurance and submit themselves to a host of regulatory oversights, including mandatory annual transparency reports to be submitted to the insurance commissioner. Registration lasts one year and can be suspended or revoked after a hearing at the commissioner’s discretion.

The legislation also prohibits gag orders in PBM contracts which prohibit pharmacists from telling customers about cheaper options for obtaining their drugs, such as paying cash if the cost is less than that of their insurance co-pay. 

It also blocks PBMs from retroactively denying a pharmacist’s or pharmacy’s claim unless the original claim was fraudulent or payment of the claim was incorrect, stops health insurance companies from punishing pharmacies that disclose drug prices and alternative options to patients, and requires advanced notice if a PBM switches out a drug for one of higher cost.

Representative Michael Schraa, R-Oshkosh, who authored the bill, called the journey to the bill’s passage “a 12-round kickboxing match,” stating that “it’s been hard fought, but we finally got to a bill that I think will really benefit all of our constituents.”

Wisconsin joined more than 30 other states which have put in place regulations on PBMs when it passed Tuesday’s bill.

The bill did not pass without friction. Before debate began, Representative Debra Kolste, D-Janesville, stated that the bill is “better than we have now,” but lamented that it does not have everything she hoped for.

During the debate, a group of more than two dozen Democratic lawmakers attempted to amend the bill to include a cap on the price of insulin but that move was blocked by Republicans.

Governor Tony Evers, whose office could not be reached for comment Tuesday, has had prescription drug prices on his mind as of late, signing an executive order in August creating a task force on prescription drug prices.

Nick Jurkowitz, an attorney with the Fenton Law Group based in Los Angeles, said in a phone interview Tuesday evening that Wisconsin’s legislation is a win for pharmacies in terms of working with PBMs, which Jurkowitz said “can sometimes be difficult to deal with” in his experience representing pharmacies.

Because PBMs can exert a lot of influence over pharmacies, Jurkowitz said that regulating PBMs and easing the leverage they have will help out pharmacies, which could in turn benefit consumers.

“It seems to me that [the legislation] would overall benefit people who go to pharmacies,” Jurkowitz said, reacting to Wisconsin’s bill. “It certainly sounds like it would allow for better access to drugs.”

Jurkowitz also said it was unique for states to go after PBMs in the way Wisconsin has specifically.

“Generally I’ve encountered that PBMs have pretty broad authority without being controlled or monitored,” Jurkowitz said.

Tuesday’s bill was immediately sent to the Wisconsin Senate. It will have to pass muster there and get Evers’ signature before becoming law.

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