Texas Pharmacists Applaud Trump Administration, Congress for Landmark PBM Reforms

Legislation will benefit pharmacy access in rural Texas with new "essential pharmacy" designation

Texas pharmacists today applauded passage of landmark reforms to help rein in some of the abusive business practices long used by unregulated pharmacy benefit managers (PBMs) — middlemen in the drug supply chain that are widely blamed for driving up costs for patients and forcing many local pharmacies to close their doors.

The reforms are contained in H.R. 7148, funding legislation passed by Congress and signed into law by President Trump on Tuesday. The measure will increase transparency, preserve Medicare beneficiaries’ access to pharmacies by creating a new “essential pharmacy” designation, and begin to address costs by reforming some of the business practices of PBMs.

"The anti-competitive, anti-patient tactics employed by PBMs have threatened the ability of many pharmacists to deliver quality health care to our communities," said Texas Pharmacy Association President Jason Davis. "This federal legislation will help correct inequities in the system with a healthy dose of transparency and fairness, which can ultimately protect access to the neighborhood pharmacies patients trust.

“While these reforms affect patients in Medicare,” he added, “we look forward to working with the Texas Legislature to enact further meaningful reforms at the state level to address similar concerns for all patients.”

The legislation will also benefit rural Texans through an “essential pharmacy” designation, helping to ensure rural Texans have access to a pharmacy within 10 miles that is not owned or controlled by a PBM.

“Pharmacists are the most accessible health care providers – and often the only health care providers – especially in rural areas. We are the hub, and we do a lot for the community,” said Crystal McEntire, a pharmacist who owns two independent pharmacies in the Texas Panhandle. “Frontline health care in rural pharmacies is saving lives, saving ER resources and keeping care close to home."

The legislation includes the following key provisions:

• Increases transparency for PBM contracts in Medicare. PBMs will no longer profit at the expense of patients when a PBM steers a patient to a higher priced drug.
• Protects patient access to local, neighborhood pharmacies by establishing when a pharmacy is considered “essential.” PBMs and Medicare Part D prescription drug plans will be required to contract with any pharmacy that agrees to their standard, contract terms. This is aimed at reining in PBMs that often steer patients to their affiliated or favored pharmacies.
• Provides the Centers for Medicare & Medicaid Services (CMS) authority to regulate contracts between PBMs and Medicare Part D prescription drug plans. This will help address abusive contract provisions that often undermine neighborhood pharmacies, ultimately hurting patients.
• Shines a light on PBM payment practices by allowing CMS to monitor the way pharmacies are paid by PBMs. This provision will also allow CMS to track which pharmacies are included or excluded from PBM networks, injecting much-needed transparency into the system.

The reforms were contained in appropriations legislation that passed the House by a 217–214 vote and previously passed the Senate by 71-29.

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.