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The Prescription Drug Affordability Act puts in place new
regulations and imposes new fees on pharmacy benefit managers (PBMs).
PBMs act as third-party intermediaries in the insurance industry
who manage prescription drug benefits on behalf of insurance
plans.
The measure also ends the practice of what is called “spread
pricing,” which is leading to the closure of small town
pharmacies.
“It is when the PBM charges a health plan one price for
medication but reimburses the pharmacy at a much lower amount,”
said the bill’s sponsor, state Rep. Natalie Manley, D-Joliet.
“Quite frankly, it creates an unsustainable business model.”
The legislation also restricts PBMs from profiting from the sale
of drugs to pharmacies and would require them to return 100% of
pharmacy rebates back to the individuals or sponsoring
organizations.
“This really transformational piece of legislation will position
Illinois to lead the nation on the topic of prescription drug
affordability,” said state Rep. Ryan Spain, R-Peoria.
The bill also prohibits PBMs from “steering” insured patients to
their own affiliated pharmacies.
Pharmaceutical industry lobbyists argued many provisions of the
bill, including the fee levied on PBMs, will actually end up
being passed on to insurance plans and consumers.
“Predatory pharmacy benefit managers have been the middlemen
whose business practices too often jack up prescription drug
prices and shut down small, independent pharmacies that are
frequently rural communities’ lone options when people are
seeking medications they need,” Gov. J.B. Pritzker said in a
statement. "I’m grateful for the General Assembly’s broad
bipartisan partnership with me to require pharmacy benefit
managers to become responsible actors and lower prescription
drug prices."
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