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Mississippi House takes aim at pharmacy benefit managers with transparency bill

The Mississippi House of Representatives passed legislation to prohibit “spread pricing,” the term used to describe when a pharmacy benefit manager hikes the price of prescription drugs when charging health plans or insurance companies.

While pharmacy benefit managers, serving as middlemen between drug manufacturers and insurance companies, use the practice of charging higher rates than what they pay the pharmacy for ingredient costs and to dispense drugs as a way to make a profit, critics of spread pricing argue it leads to higher drug costs for patients since extra dollars are being doled out by insurers. Lawmakers, for the most part, agreed on legislation Thursday to provide transparency into the process.

House Bill 1123, authored by Republican House Speaker Jason White, would implement several regulations aimed at increasing transparency and oversight in drug pricing and pharmacy benefit management. It would not only do away with spread pricing, but it would also require pharmacy benefit managers and drug manufacturers to submit detailed reports to the Mississippi Board of Pharmacy. The Board of Pharmacy would be allowed to subpoena pharmacy benefit managers and other related individuals or entities during audits. If noncompliance is discovered, those subpoenaed would be forced to pay for the audit.

Additionally, the Board of Pharmacy would have the authority to impose monetary penalties ranging from $1,000 to $25,000 on those engaging in spread pricing.

“We’re going to be on the forefront of transparency and sunshine as it relates to drug pricing and how much rebate money these aggregators are keeping,” Republican Rep. Hank Zuber said when presenting the bill on behalf of the speaker.

Even with an eventual 88-8 vote in favor of the legislation, some concerns were raised over a perceived lack of protection for independent pharmacists. While pharmacists are reliant on pharmacy benefit managers to work with insurers, inadequate reimbursements and excessive fees have been blamed for some across the state closing their doors.

Rep. Stacey Hobgood Wilkes, a Republican who did not vote in favor of the bill and has filed an opposing yet similar piece of legislation, believes a

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