A second powerful TPBC bill targeting PBM abuses cleared its last legislative hurdle yesterday and is headed to the governor.
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 yesterday afternoon. 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.
The bill will take effect Sept. 1 if it is signed by the governor or if he allows it to become law by taking no action during the 20-day period that begins when the Legislature adjourns at midnight on May 31. The bill's provisions apply to PBM actions that take place on or after Jan. 1, 2022.
PBMs and health plans fiercely oppose the bill and are lobbying the governor hard to veto it. It is critical that independent pharmacy owners call the governor's office to voice their strong support for the legislation. Please communicate your support of HB 1919 to:
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."
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."
APRx member John Rogers, chief operating officer for the 7-pharmacy Rogers Healthcare Group based in Victoria, testified at the hearing that PBMs send letters to his patients that either scare or confuse them into switching to a PBM-owned pharmacy. Rogers also said that PBMs use the prescription information they gather to identify which patients are on the most maintenance drugs or which patients have doctors that prescribe the most, then target them with advertising and letters to force or induce them to switch pharmacies.
The Pharmaceutical Care Management Association (PCMA, the PBMs' trade lobby), falsely stated that the bill would prohibit PBMs from creating narrow or preferred networks, that it would take away patient choice and savings opportunities and that it was designed to enrich independent pharmacies.
American Pharmacies General Counsel Miguel Rodriguezrefuted all of PCMA's arguments.
"Nothing in this bill prevents a patient from exercising their right to choose any pharmacy they want," Rodriguez said. "It also does not prohibit or limit -- contrary to others' testimony heard earlier -- the use of preferred networks or limited networks. This bill is exclusively concerned with preventing self-dealing."
