PHARMACY WIN: Gov. Abbott Signs PBM Reform Bill into Law

Texas pharmacists applaud Governor Greg Abbott for signing into law yesterday legislation to help protect Texas patients, pharmacies and employers from some of the anti-competitive, anti-consumer practices of middlemen in the pharmaceutical supply chain known as pharmacy benefit managers (PBMs).

Senate Bill 1236 by Sen. Bryan Hughes (R-Mineola) will help address abusive business practices of pharmacy benefit managers by requiring contract fairness and transparency, ensuring compliance with existing PBM laws, and prohibiting unfair fees. The measure was sponsored in the Texas House of Representatives by Rep. Cole Hefner (R-Mount Pleasant).

“The PBMs set the reimbursements for our local pharmacies, which are struggling to stay open,” Hughes said. “They also determine the prices for their own pharmacies. Senate Bill 1236 continues the Legislature’s efforts to make sure that anti-competitive behavior by someone with a lot of bargaining power, that’s been granted to them by the government, is not weaponized in the market.”

Texas Pharmacy Association CEO RoxAnn Dominguez praised Texas elected officials for their support of PBM reform this session.

“We are incredibly grateful to Governor Abbott for making SB 1236 the law in Texas, and to Sen. Hughes and Rep. Hefner for their hard work and dedication to Texas patients and pharmacists,” Dominguez said. “We look forward now to working with the Texas Department of Insurance and the Attorney General’s Office to implement SB 1236 for the betterment of patient care.”

PBMs manage prescription drug benefits for insurers, employers and government payers. They have been widely criticized for abusing that power to increase their profits at the expense of patients and neighborhood pharmacies. Because of PBMs’ questionable practices, scores of neighborhood pharmacies have been forced out of business. At least one Texas pharmacy has closed every week for the past two years.

TPA President Jobby John, a Lakeway pharmacist, said PBMs’ “anti-competitive tactics have threatened our ability to deliver quality healthcare to our communities. SB 1236 will go a long way toward correcting inequities in the system and ensuring transparency and fairness, which will help protect the neighborhood pharmacies that patients trust.”

SB 1236 received unanimous support in both the Texas Senate and Texas House. The bill generated powerful commentary from legislative leaders including from state Sen. Lois Kolkhorst, chair of the state Senate Committee on Health and Human Services.

During a Senate hearing on SB 1236, Kolkhorst noted that the top three PBMs control 80 percent of the drug supply market and questioned, “Who in America thinks that’s a good idea?” noting that “the losers are the pharmacists which are sometimes the only people that people in underserved areas get a chance to interact [with]. . . but the other loser is the patient.”