Title of Proposal:

Resolution To Regulate And License Pharmacy Benefit Managers Who Serve Virginians

On behalf of:

Harry L Gewanter, MD, FAAP, MACR

Describe the Idea or Issue:

WHEREAS, Current prices for pharmaceuticals are rising more quickly than other health care costs, and;

WHEREAS, Rising insurance premiums, pharmaceutical copays, and out-of-pocket costs often result in the patient/consumer not being able to adhere to proposed treatment plans, and;

WHEREAS, Pharmacy Benefit Managers (PBMs) currently determine the content of most formularies for health care plans and companies providing health care within the Commonwealth of Virginia, and;

WHEREAS, PBMs also provide the majority of all pharmacy claim processing services, including but not be limited to negotiating drug prices, processing and adjudicating prescription requests, contracting with pharmacists or pharmacies, maintain pharmacy benefits networks, receiving payments for pharmacist services, making payments to pharmacists, negotiating, disbursing or distributing rebates, and handling all appeals, and;

WHEREAS, PBM use of restricted formularies, prior authorization, utilization review and step therapy protocols are resulting in the disruption of the physician-patient relationship and interference in the agreedupon individualized treatment care plans, and;

WHEREAS, PBM contracts with local pharmacies often result in limiting the pharmacist’s scope of care or ability to provide pharmacist services, thereby frequently resulting in increased costs to patients/consumers, and;

WHEREAS, All PBM activities are not currently licensed or regulated by the Virginia Insurance Commisioner; therefore be it

RESOLVED,That the Medical Society of Virginia, in concert and collaboration with local and specialty physician organizations, pharmacist organizations, patient organizations and any other interested and affected parties work to develop and institute appropriate legislative and/or regulatory processes to ensure that the Virginia Insurance Commissioner has authority to appropriately oversee the actions of PBMs providing services to Virginians similar to the recently enacted Arkansas legislation (HB 1010).

Desired Outcome:

PBM's are brought under oversight and held accountable for their actions in the pricing, management and dispensing of medications to their Virginians Advocacy Summit Proposal No. 6 Background/Supporting Information: PBM's currently operate without regulation or oversight by anyone and are significantly responsible for the increasing costs of medications while also limiting the ability of prescribers and pharmacists to fully operate within our scope of practice. It is past time that they be subject to the same oversight as all other participants within the health care arena.

Background information can be found on pages 12-44 of appendix.

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