(Lansing, Mich.) – Gov. Gretchen Whitmer signed into law today House Bill 4348, pharmacy benefit manager (PBM) reform, just under a year after it was introduced. Michigan now joins 40 other states that are making serious advances in reigning in these powerful healthcare middlemen. The bill was authored by the Michigan Pharmacists Association (MPA) and was considered one of the most comprehensive PBM reform bills in the nation when it was introduced.

The bill saw quick movement through the House of Representatives, where it passed out of committee and was approved two weeks later by a vote of 97-10. The legislation sat for nearly two months before committee hearings began in the Senate.  MPA, the voice of pharmacy in Michigan, was the first pharmacy association to testify in support of the legislation. The legislation was finally voted out of the Senate Health Policy Committee earlier this month and passed by the entire Senate unanimously.

The Senate-passed version of the bill includes nearly 80 percent of the original draft. Some of the important pieces that remain intact include:

• PBM Licensure – any PBM operating in the state must be licensed by the Department of Insurance and Financial Services. The PBMs will be required to make annual reports to the state to help shed light on their deceptive tactics.
• PBM Steering – the bill prohibits a PBM from transferring a patient’s prescription to an affiliated pharmacy without the consent of the patient. Additionally, it protects the patient from paying a higher amount when using a non-affiliated pharmacy.
• Audits and Appeals – PBMs will no longer be able to “take their time” with audits. They will have a 60-day “shot-clock” to get their initial report back to the audited pharmacy. Pharmacies will then be able to appeal the audit and challenge the findings of the audit with help from the state.
• Prohibition on Retroactive Fees – Retroactive fees known as clawbacks, as well as electronic transaction fees, will be prohibited from being collected by PBMs.

“MPA is proud to usher in a new era for patients and pharmacists in Michigan, one marked by reasonable protection and recourse against the unjust and outrageous tactics employed by PBMs,” said MPA CEO Mark Glasper. “While MPA will continue to fight for the elements that did not make it into today’s law, this reform will give patients more freedom, allow pharmacists to practice at the top of their profession and give pharmacies a chance to compete fairly in Michigan.

“I’d like to thank MPA’s members, our stakeholders, legislators and Gov. Whitmer for coming together to make this courageous reform possible. We especially want to thank Rep. Julie Calley for sponsoring this legislation and Sen. Curt VanderWall, Speaker Jason Wentworth and Senate Majority Leader Mike Shirkey for their support in speeding it to the finish line. We look forward to continuing to fight for pharmacy professionals and their patients to achieve even greater fairness when it comes to lowering the cost of prescription drugs.”

The law will take effect Jan. 1, 2024.

Also signed by the governor today and supported by MPA are House Bills 4351 and 4352, part of the same package aimed at lowering prescription drug costs. HB 4351 will require PBMs to reimburse 340B pharmacies the same as a non-340B pharmacies, and HB 4352 will prohibit PBMs from including gag clauses in pharmacy contracts.