In mid-February 2022, Michigan Governor Gretchen Whitmer signed several pharmacy benefit manager (PBM) reforms into law, including bills that prohibit discrimination against pharmacies that PBMs do not have a relationship with solely because of that lack of relationship.
Licensure
House Bill 4348 requires PBMs to have licenses and file transparency reports with state officials to provide information to consumers about the “backend cost and profits of the medications they are prescribed.” The Department of Insurance and Financial Services (DIFS) will be responsible for regulating PBMs licenses.
The new laws also prohibit PBMs from forcing pharmacists to sign “gag clauses” that prevent them from telling consumers that they can purchase drugs out-of-pocket for cheaper than their insurance co-pays.
Additionally, Michigan has become the fifteenth state to ban spread pricing, which is where a PBM drives up costs for reimbursing a pharmacist for prescription drugs.
Discrimination
House Bill 4351 prohibits PBMs or carriers from excluding or discriminating against a pharmacy solely because the carrier does not have a vested financial interest in the pharmacy. PBMs and carriers are also prohibited from discriminating against 340B Program entities that provide medication to Medicaid patients at a discount.
Also included in that bill is a prohibition on PBMs from requiring patients to pay a co-pay that is higher than the selling cost of the drug they are receiving.
PBMs and health insurance carriers third party administrators will also need to maintain a certificate of authority and follow third party administrator conduct requirements.
Pricing
In addition to the aforementioned pricing requirements and restrictions, House Bill 4352 allows pharmacists to actively provide the current selling price of a drug dispensed by the pharmacy and/or compare current selling prices of generic and brand name drugs.
Under the legislation, pharmacists are also prohibited from agreeing to a contract that would disallow the disclosure of drug prices and comparative selling prices of generic and brand name drugs; violate the provisions of House Bill 4351 as they relate to 340B entities and carrier prohibitions; or prevent or interfere with a patient’s right to receive an eligible drug from a 340B entity.