Following up on the earlier success of our powerful PBM reform bill -- HB 1763 -- that is already signed into law, TPBC has delivered a second potent blow for Texas community pharmacies with the enactment of HB 1919, our even more critical anti-steering bill.
HB 1919, by Rep. Cody Harris, R-Palestine (right), targets self-dealing PBM practices that steer pharmacy patients toward PBM-owned pharmacies and use patient-identifiable data to drive their pharmacy marketing efforts. The Senate companion bill, SB 812, was carried by longtime TPBC ally Sen. Charles Schwertner, R-Georgetown. The legislation was supported by virtually all state and national pharmacy groups.
HB 1919 passed the Senate May 24 on a 30-vote. However, the bill was amended in the Senate and was sent back to the House for concurrence with the Senate amendment. That happened in a 124-21 House vote on May 28. The passage of the powerful anti-steering bill comes on the heels of thegovernor's May 26 signing of our HB 1763, an equally far-reaching PBM reform bill that bans almost all retroactive reductions in reimbursement as well as other PBM abuses. That bill passed on a combined 177-0 vote.
HB 1919 takes effect Sept. 1 because the governor took no action on the bill during the 20-day statutory period that followed the Legislature's adjournment on May 31. The bill's provisions apply to PBM actions that take place on or after Jan. 1, 2022.
HB 1919 was enacted despite fierce opposition from the PBM and health plan lobbies, who worked feverishly to kill the legislation even after it reached the governor. The bill strikes at the very heart of self-dealing practices that generate considerable revenue for PBMs at the expense of patients, plan payers and local pharmacies.
TPBC and its allies worked just as hard to shore up support for the bill in the governor's office. Many legislators intervened with the governor at our request, as did representatives of Texas Oncology, TMA, HEB, NACDS, AmerisourceBergen, NCPA, Texas Pharmacy Association and many other groups.
The enactment of HB 1763 and HB 1919 mark the 11th and 12th bills passed by TPBC since its creation in 2009 to spearhead advocacy efforts for Texas independent pharmacies. Our list of successes over the past 12 years includes prompt-payment protections, multiple audit bills, bans on clawbacks and transaction fees, MAC reforms and toughening of criminal penalties for pharmacy thefts and break-ins.
Michael Wright, VP of Government Affairs for American Pharmacies and the leader of TPBC, said HB 1919 is a critical cornerstone in TPBC's ongoing fight to protect independent pharmacies' right to compete on a level playing field and be compensated fairly for medications and services.
"PBMs use the power of their role in benefits oversight to steer business to their own affiliates and to pay themselves more than they pay other pharmacies," Wright said. "This uncurbed self-dealing reduces patient choice, disrupts patient care and financially harms smaller, locally owned pharmacies. This bill is a major win for these pharmacies and their patients. We are deeply grateful to Representative Harris and Chairman Schwertner for championing this legislation and to everyone who supported it."
Wright said passing one major PBM reform bill in a Texas session is difficult enough, but passing two of such major impact is a monumental accomplishment.
"Certainly the passage of two such powerful bills in one session represents some of the most powerful action ever taken in this country to curb PBM abuses," Wright said. "I think that other states will definitely sit up and take notice of this."
CSHB 1919 amends Chapter 1369 of the Texas Insurance Code with the following provisions:
The bill defines what a PBM-affiliated pharmacy is and the activities that constitute an impermissible referral of a patient, such as ordering or influencing a patient to use a PBM-affiliated pharmacy.
A PBM cannot transfer or share prescription records containing patient- and/or prescriber-identifiable data with any PBM-affiliated pharmacy, except for purposes of reimbursement, formulary compliance, pharmacy care, public health activities otherwise authorized by law, or utilization review by a health-care provider.
A PBM cannot accept from an affiliated pharmacy the transfer of prescription records containing patient- and/or prescriber-identifiable data.
A PBM is prohibited from attempting to require a patient to select an affiliate pharmacy or influencing a patient to select an affiliated pharmacy through any oral or written communication, including online messaging or any patient-specific advertising, marketing or promotion.
All PBMs operating in Texas must file an annual disclosure statement with the Texas Dept. of Insurance. TDI must provide PBMs the disclosure form by Dec. 1, 2021.
The provisions of the bill do not apply to hospitals or to referrals for pharmacy services and prescriptions for patients in skilled nursing facilities, intermediate care facilities, continuing care retirement communities, home health or hospices.
The bill applies to PBM activities on or after Jan. 1, 2022.
When the bill was heard March 23 by the House Insurance Committee, sponsor Rep. Cody Harris told committee members that his legislation is essential to protecting free markets and patients in the Texas pharmacy space.
"Competition is the backbone of our capitalistic economy," Harris said. "The goal of the free market is not to establish monopolies, which is what is happening right now. This is a very real issue that is affecting business owners in each one of our districts. And it's affecting patients in each one of our districts. Because they don't have the right to choose."