The Public Employees Insurance Agency is examining the potential financial effect of a bill requiring pricing and payment transparency from pharmacy benefits managers.
That is expected to increase costs for PEIA. The agency is also expecting increased costs from a separate requirement to reimburse providers at 110% of the Medicare reimbursement rate.
“In practical terms, what that means and what we’ve projected is about a $6.2 million hit to the plan,” said PEIA Director Brian Cunningham.
Gov. Jim Justice signed Senate Bill 453 into law this past week. PEIA’s Finance Board discussed its effects Thursday afternoon during a regular monthly meeting.
The bill prohibits a pharmacy benefit manager from reimbursing certain pharmacies or pharmacists less than the national average drug acquisition cost for a prescription drug or pharmacy service.
An aspect of the bill’s requirements is a comprehensive pharmacy business intelligence study and analysis to determine what, if any, changes can be made. The final report is due to legislators by the end of the year.
“We are already working to ensure that every bit of this code is complied with,” said William Hicks, the
general counsel for PEIA.
The policy got a big push after the owner of regional pharmacy chain Fruth demonstrated receiving lower reimbursements through PEIA than what big national chains were getting.
The effects of the bill are meant to apply only to pharmacies registered with West Virginia as their
business headquarters.
On the cost, Cunningham said, “There are a lot of factors that go into that, not the least of which is the portion of specialty drugs that are dispensed at those domestic West Virginia pharmacies. As that portion of specialty drugs increases that are dispensed at West Virginia pharmacies, then that
number also potentially increases.”
He described “a very delicate balancing act. And that balancing act is to keep care, as much as possible in-state — dispense at West Virginia pharmacies. However, the more successful we are at that, the more we risk a financial hit.”
