ALEXANDRIA, Va. — On Tuesday, the National Association of Insurance Commissioners’ Health Insurance and Managed Care (B) Committee approved a charge for its Pharmacy Benefit Manager Regulatory Issues (B) Subgroup to develop a white paper addressing PBMs’ role in the prescription drug supply chain and examining state provisions addressing various PBM practices.

Additionally, the subgroup will examine PBMs’ relationships with other supply chain entities and the challenges states have had in enforcing PBM regulations to protect consumers. The committee also advanced model legislation to regulate and license PBMs, which next moves before the full NAIC at its summer meeting in August. Among other things, the model bill would require PBMs to obtain a license from the state’s insurance commissioner, permit the commissioner to adopt PBM regulations, and prohibit certain PBM abuses such as retaliating against a pharmacy for discussing PBM compliance issues with the insurance commissioner.

The National Community Pharmacists Association, which applauds this progress, has made it a priority to work with NAIC throughout the years-long process and educate its members on the effects of PBMs on pharmacies, patients and payers/taxpayers. Over the past two years, NCPA presented to members of NAIC on the need for PBM oversight, submitted four letters containing suggested actions (most recently on June 14), and offered oral comments on five separate occasions. Additionally, in 2020 NCPA led a group of 74 pharmacy stakeholders in submitting joint recommendations to help strengthen the model PBM reform legislation.

“Time and time again we see that PBM conflicts of interest and other tactics lead plan sponsors to overpay, patients to lose access to affordable care at the pharmacy of their choice, and small business pharmacies to struggle competing in an anticompetitive environment,” said Karry La Violette, NCPA Senior Vice President of Government Affairs. “PBM policies drive up costs for consumers while decreasing access. Who benefits? The PBMs themselves. We’re grateful that NAIC is continuing to investigate this system and the role of PBMs. We strongly encourage the group to advance the strongest possible model PBM bill and appreciate the opportunity to assist with its development, implementation, and enforcement in the states.”