ConclusionIn July 2023, Florida passed the Prescription Drug Reform Act (Chapter 2023-29). Now, what is this act? The Prescription Drug Reform Act aims to regulate pharmacy benefit managers (PBMs) and pharmaceutical manufacturers in the state. The primary focus of this act is to bring transparency, accountability, and fairness to the outpatient pharmaceutical system in Florida, especially in relation to PBMs. This blog post breaks down the key aspects of the Prescription Drug Reform Act and how it affects pharmacies in Florida.
Contracts Between PBMs and Pharmacies
The Act introduces new requirements for contracts between PBMs and pharmacies, especially for services provided on or after January 1, 2024. Below is more insight into these requirements:
Reimbursement Information: PBMs must provide pharmacies with reimbursement details at the time of adjudication or reimbursement. This information must include applicable network reimbursement IDs.
No Clawbacks or DIR Fees: PBMs are prohibited from charging or recouping various fees, except in specific circumstances like fraud or erroneous claims.
Contract Changes: PBMs cannot unilaterally change contract terms with pharmacies.
Opt-In Mail Services: Pharmacies can offer mail or delivery services at the discretion of covered persons, with transparent fees.
Transparency in Network Participation: PBMs must provide pharmacies with a list of network plans and allow disclosure of this information to the public.
Electronic Remittance Advice: PBMs must provide claim-level payment adjustments in a standardized format for easy reconciliation.
Appeal Procedure: PBMs must offer an administrative appeal procedure for pharmacies to challenge Maximum Allowable Cost (MAC) pricing.
Contracts Between PBMs and Pharmacy Benefit Plans or Programs
The Act introduces several provisions to the contracts between PBM and Pharmacy Benefit Plans or Programs. Through these provisions, PBM questionable practices are addressed and benefits are provided to pharmacies. Addressed in these changes include:
Equal Treatment: PBMs are now prohibited from favoring their affiliated pharmacies over non-affiliated ones in their contracts with pharmacy benefit plans or programs.
Pass-Through Pricing: Contracts must incorporate a pass-through pricing model, ensuring that funds received for services are used according to the agreement.
Network Adequacy: PBMs must include network adequacy requirements that meet or exceed Medicare Part D standards, offering convenient access to network pharmacies.
Specialty Networks: PBMs can specify specialty networks for drugs requiring special handling or clinical care.
Prohibiting Mail Orders: PBMs cannot require covered individuals to receive prescription drugs by mail unless they are unavailable at retail.
No Promotional Favoritism: PBMs owning pharmacies must ensure they don’t promote their affiliated pharmacies to covered persons or offer incentives for using them.
Non-Conditional Participation: Contracts cannot condition a pharmacy’s participation in one network on participation in another, nor penalize a pharmacy for refusing to join a specific network.
Prohibited Acts by PBMs in Their Relationships with Pharmacies
The Act also outlines what PBMs cannot do in their relationships with pharmacies. Included in this is:
Information Disclosure: PBMs cannot prohibit pharmacies from disclosing necessary information to patients, including treatment alternatives and costs.
Disclosure to Regulators: Pharmacies can freely disclose information to regulatory bodies, provided confidentiality is maintained as required by law.
Cost-Sharing Limit: PBMs cannot impose cost-sharing obligations exceeding plan limits or usual and customary prices.
Limited Data Sharing: PBMs cannot share prescription data with affiliated pharmacies for commercial purposes beyond specific use cases.
Timely Payments: PBMs must pay pharmacies for adjudicated claims promptly, except in cases of fraud or as required by law.
Non-Retaliation: PBMs cannot terminate contracts or penalize pharmacies for disclosing information about PBM practices or exercising their rights under the Act.
When it comes to the PBM changes, there are some practical matters to take into consideration. To note, the Office of Insurance Regulation (OIR) will oversee PBM conduct in Florida. Most changes in participating pharmacy contracts will take effect upon renewal or amendment after January 1, 2024. PBMs may choose to amend all contracts simultaneously to ensure consistency.
In conclusion, the Prescription Drug Reform Act in Florida seeks to level the playing field between PBMs and pharmacies, bring transparency to pharmaceutical transactions, and protect the interests of both pharmacies and patients. These changes should help pharmacies operate more equitably and provide better services to the public. Pharmacies should review the Act with legal counsel to ensure compliance.