Empower Wisconsin | Jan. 22, 2020
By M.D. Kittle
MADISON — State Rep. Michael Schraa says he didn’t know much about Pharmacy Benefit Managers (PBMs) until he watched his wife, Christine, spend hours on the phone fighting for an allergy medication that wouldn’t make her sick.
Now, the Oshkosh Republican is leading a legislative effort to rein in the powerful prescription drug middlemen and bring greater transparency to consumers.
“My wife has a lot of allergies and some other health issues. The drugs that the PBM wanted her to try, in place of the one she was on, she is allergic to,” Schraa said.
Christine grew sicker, he said, all for what the lawmaker believes was a “stall tactic.” His insurer’s PBM wanted Christine Schraa to try allergy meds from a formulary, or list of approved prescription drugs covered by the insurance plan before she could get another prescription for the costlier medicine –The drugs that worked, that didn’t make her sick.
The lawmaker started investigating. He said the more he looked the more questions and concerns he had about the practices of PBMs, or third-party administrators of prescription drug coverage for insurers and employers. PBMs earn fees for services they provide, including developing and maintaining prescription drug lists (formularies), processing claims and negotiating discounts and rebates.
Schraa wrote Assembly Bill 114, which requires pricing transparency from PBMs, the end of “gag clauses” that have led to higher prices for patients, and more oversight in general. The bill’s counterpart, Senate Bill 100, was authored by Sen. Jon Erpenbach (D-West Point).
Patient struggles with the prescription drug middlemen are increasingly common. Communityoncology.org tracks what it describes as “Real Horror Stories of How PBMs Hurt Patient Care.” In one case, a 73-year-old man identified as James was battling metastatic, non-small cell lung cancer when he was prescribed a new FDA-approved medication. James’ doctor submitted a request for prior authorization to the benefits manager. The request was denied because the PBM demanded results of blood tests for jaundice. That made no sense to James’ oncologist.
“They resubmitted the request and for the next three weeks waited in vain for the determination, with the doctor occasionally calling for status, only to be disconnected or told to call back,” the web site claims. While his doctor was again on the phone with James’ insurance company, his patients family called to say James had died.
There are many more stories of delays, denials, overcharges and downright incompetence in the system. In one case, a California medical practice received multiple requests from a PBM to initiate a drug refill on a variety of expired prescriptions. Some were for drugs that patients had stopped taking months earlier, others were for patients who had died.
In some cases, the drug middlemen put “gag clauses” on pharmacists, contractually prohibiting them from telling customers that the prescription they need could cost less if they pay out of pocket rather than through their insurance plans.
Schraa’s bill would end the use of the “gag clauses,” bringing greater transparency to consumers. Federal legislation signed last year by President Trump also took aim at the non-disclosure contracts.
AB 114 and SB 100 has a lot of bi-partisan support, with 99 co-sponsors. Health care associations like the Wisconsin Pharmacy Patient Protection Coalition endorse the transparency bills.
PBMs oppose the legislation, as do some business groups who assert new regulations will ultimately increase prescription drug costs. Schraa last week said industry officials have refused to present their ideas on how to improve the bill, but their lobbyists have been making the Capitol rounds.
“The PBMs stakeholders are trying to scare everyone, saying that if they pass this bill it’s going to increase costs,” Schraa said. “I think they are trying to slow roll it to try to kill the bill this session.”
A representative from the Pharmaceutical Care Management Association, which represents the nation’s PBMs, has not returned Empower Wisconsin’s request for comment.
Schraa says Assembly leadership has been a strong supporter of the legislation and a committee hearing on the bill could be held as soon as next week.