Feb. 23 2022
MI PBM Bill Signed Into Law;
Sets Stage for Major Reforms
APRx Support in Past Year Vital in Crafting, Moving Bill
A far-reaching PBM reform bill that will substantially curb myriad PBM abuses in Michigan was signed into law today (Feb. 23) by Gov. Gretchen Whitmer.

The bill headed to Whitmer last week after the House voted 101-4 on Feb. 16 to accept Senate amendments in the legislation. The bill won final passage on a unanimous Senate vote on Feb. 15 and was sent back to the House for a vote on concurrence with the Senate's changes.

The bill has an effective date of Jan. 1, 2024.

"We owe so much to our members and the legislative allies who worked so hard to pass this bill," VP of Government Affairs Michael Wright said. "We are certainly gratified that these critical reforms have been enacted, but this is not a one-and-done effort for American Pharmacies. This bill will be the foundation for our future efforts in Michigan."

The comprehensive reform bill was filed Feb. 24, 2021, by Rep. Julie Calley, a close ally of House Speaker Jason Wentworth (shown at center with VP of Government Affairs Michael Wright (L) and General Counsel Miguel Rodriguez), as part of Wentworth's House Bipartisan Healthcare Plan. The bill sailed through the House, clearing the Health Policy Committee on March 10 and the full House two weeks later on a 97-10 vote.

The bill faced a steeper climb and extended deliberation in the slower-paced Senate, where it was discussed in four separate hearings by the Senate Health Policy and Human Resources Committee, the first on June 17. The Committee held a second hearing on a substitute bill on Jan. 27 and again on Feb. 8. The committee passed the substituted bill out on Feb. 9.
American Pharmacies shareholder Austin Brown of Jackson, Michigan, testified on the bill at the Jan. 27 hearing, as did General Counsel Miguel Rodriguez. Brown (at left in photo with Rodriguez) and Rodriguez were the only independent pharmacy representatives testifying at the hearing. American Pharmacies registered in favor of the bill at the next hearing on Feb. 8.

HB 4348 will require the licensing and regulation of PBMs operating in Michigan through the Department of Insurance and Financial Services. The bill imposes requirements on PBMs in four distinct areas: 

  • Licensing & Transparency:  PBMs must register with the state, disclose financial assets and major officers/stockholders, submit pharmacy network adequacy reports and submit quarterly transparency reports.
  • Patient Protections for Payment & Access to Care: The bill protects patients' right to receive information about drug coverage and pricing and to purchase lower-price alternative drugs, does not allow a prescription to be transferred to a PBM pharmacy without their prior consent and protects them from paying more for a drug than the established co-pay or the amount of the pharmacy's reimbursement.
  • Good Faith and Fair Dealing: The bill requires PBMs to exercise good faith and fair dealing in their contractual relationships with network pharmacies.”
  • Pharmacy Reimbursement, Fees and Audits: The bill requires PBMs to publish up-to-date MAC lists and allow appeals of MAC prices, and prohibits transaction fees, retroactive reductions to reimbursement and unfair audit practices.

The bill delivers substantial protections for Michigan independent pharmacies. It prohibits clawbacks and transaction fees, protects patients' right to choose their pharmacy, prohibits retroactive reductions in reimbursements, bans unnecessary PBM-required accreditations and protects the right to deliver and mail prescriptions to patients. It also requires MAC pricing transparency and appeals and establishes major protections for pharmacies in PBM and health plan audits.

Additionally, the bill imposes substantial regulatory mandates in the form of licensure, transparency and network adequacy, while prohibiting spread pricing.

American Pharmacies' Role
Prior to American Pharmacies' engagement, there had never been a meaningful PBM reform bill filed in Michigan. We got involved in 2020, hiring a lobbyist and meeting with key Michigan independents, Rep. Calley and House Speaker Wentworth. Rodriguez provided significant input on bill content. When the bill went to the House Health Policy Committee, Wright and Rodriguez held multiple meetings with committee members and House leaders before the bill was heard. Three APRx representatives testified in support of the bill at the committee's March 10, 2021, meeting: members Grant Brown of Jackson and John Gross of Clare, as well as Rodriguez.

After the bill passed the House, Wright and Rodriguez began meeting with Senate leaders to build support for the legislation. APRx member Austin Brown and Rodriguez testified on the Senate substitute bill on Jan. 27 before the Health Policy and Human Services Committee, the only pharmacy representatives to testify.

Wright and Rodriguez were back in Michigan after the Jan. 27 hearing to provide needed input as the Senate committee revised the bill. American Pharmacies registered in support of the bill on Feb. 9 when the committee voted the bill out.

Over the past year, American Pharmacies has sent out multiple news blasts and action alerts in support of the bill.

American Pharmacies thanks our Michigan members for their support and engagement on this vital legislation. It has been our privilege since we became involved in this effort in the fall of 2020 to work closely with Rep. Calley, Speaker Wentworth, Sen. Curt VanderWall and many other legislators in support of this landmark bill. We commend the Michigan Legislature and Gov. Whitmer for their commitment to the welfare of independent pharmacy and the Michigan patients they serve and we look forward to working with them on future legislation.

"We've been the only independent pharmacy group to consistently back this legislation from its drafting through the final Senate substitute," Wright said. "We didn't back off when the bill underwent revisions, but continued to work with legislators to get a final product that we can be proud of. We have powerful allies in both the House and Senate and we trusted them and the support of our Michigan members. In the end, we protected the lion's share of this bill."