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North Carolina bill targets pharmacy benefit managers

The North Carolina Senate unanimously approved a bill Tuesday to increase consumer protections in the health care industry.

Senate Bill 257 increases state regulation of pharmacy benefit managers. Fiscal analysts said the bill could increase state revenue if it becomes law.

Pharmacy benefit managers are subcontractors that often dictate how much a pharmacy can charge a customer for prescription medications. Health insurance companies and Medicaid pay pharmacy benefit managers to negotiate prices with drug manufacturers on their behalf and maintain medication lists.

Pharmacy benefit managers would be required to get a license to do business in North Carolina under the measure. The initial application fee would be $2,000, and annual renewal fees would be $1,500. The North Carolina Department of Insurance would be administering the licensing process.

The department currently has 32 pharmacy benefits managers as third-party administrators paying $300 a year, according to fiscal analysts. Using the current number of pharmacy benefits managers, fiscal analysts estimate North Carolina could collect $64,000 the first year the bill becomes law and $48,000 each following year.

To manage the new workload, the Department of Insurance would have to hire an insurance regulatory analyst with a $82,010 annual salary and cover other additional operational costs.

SB 257 goes further to protect consumers by blocking overpayment on fees and allowing pharmacies to refuse to fill prescriptions if they believe the prescription is not in the patient's best interest or if there is a question about the validity of the prescription. It bans pharmacy benefit managers from preventing pharmacies from dispensing any drug and from retaliating against pharmacies.

The measure allows the insurance commissioner to petition a court to order pharmacy benefit managers to pay restitution to pharmacies if they violate certain policies. It also stops pharmacy benefit managers from discriminating against health care providers or pharmacies that use the federal 340B Drug Pricing Program.

The Senate unanimously approved the measure, 45-0, on Tuesday without debate. It now heads to the House for consideration.


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