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Texas Attorney General Ken Paxton today issued an AG opinion affirming that two key PBM reform bills passed by American Pharmacies in 2021 are enforceable with respect to ERISA plans and out-of-state health plans operating in Texas.
The opinion allows the Texas Dept. of Insurance to enforce both bills against all PBMs with Texas patients and those processing claims for ERISA plans, giving much-needed teeth to both laws. HB 1763 -- the landmark PBM reform bill -- and HB 1919 -- the anti-steering bill -- were both spearheaded by the Texas Pharmacy Business Council (TPBC), APRx's dedicated advocacy arm in Texas.
HB 1919, by Rep. Cody Harris, R-Palestine, 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 bill was enacted in June 2021 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.
HB 1919 is a critical cornerstone in American Pharmacies’ ongoing fight to protect independent pharmacies' right to compete on a level playing field and be compensated fairly for medications and services.
HB 1763, by House Insurance Chairman Tom Oliverson, R-Houston, was signed into law in late May 2021 after passing the House and Senate by a combined 147-0 margin. HB 1763 prohibits retroactive fees or reductions in payment (except as audit outcomes) and bars restrictions on pharmacy delivery or mailing of medications. It also prohibits PBMs from reimbursing affiliated pharmacies more than they pay non-affiliated pharmacies for the same drug.
This landmark PBM legislation championed by American Pharmacies, is the strongest and most comprehensive ever passed in Texas, made possible by the dedicated testimony of American Pharmacies members, along with EVP and General Counsel Miguel Rodriguez.
"Today, the Texas AG emphatically stated that there are no barriers to enforcement of these two critical laws, even in ERISA plans or health plans sponsored by out-of-state insurers," said Michael Wright, VP of Government Affairs for American Pharmacies. "We thank AG Ken Paxton for his support of Texas retail pharmacy and we're deeply appreciative that our longtime ally --State Sen. Charles Schwertner as well as the Senate Business and Commerce Committee -- requested the opinion for us.”
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