Connecticut Governor Signs Law Regulating PBMs

In a victory for consumers, pharmacists, and advocates for lower drug costs, Connecticut Governor Ned Lamont signed into a law a bill that would better regulate pharmacy benefit managers (PBMs) and combat their misbehavior.

HB 7363 was approved by both the House and Senate, and signed into law on July 12th. It puts major restrictions on PBM clawbacks, or the results of an insurance company assigning expensive copays to a drug leading to a significantly higher price than the value of that drug, along with direct and indirect remuneration (DIR) fees. laces major restrictions on pharmacy benefit manager (PBM) clawbacks, or the results of an insurance company assigning expensive copays to a drug leading to a significantly higher price than the value of that drug, along with direct and indirect remuneration (DIR) fees. Furthermore, it prohibits PBMs and insurance companies from forcing pharmacies to pay back any part of a claim that the PBM or insurance company has already paid. Additionally, the new law prohibits PBMs from penalizing pharmacists if they tell patients about less costly ways to purchase drugs.

The Connecticut Insurance Commissioner also has powers to enforce the bill; she/he can audit PBM contracts to make certain they are compliant with the law.

Connecticut pharmacists supported the bill and hailed its passage. CEO Nathan Tinker praised the new law and said it would "protect pharmacies from predatory practices that kill community pharmacies and drive consumer prices up. But it is just a first step in one state--federal legislators must act nationally to eliminate DIR across the industry and create transparency for patients and consumers."

This is yet another example of a state government enacting laws to regulate PBMs and reduce drug prices. Connecticut therefore follows in the steps of Maine, Minnesota, Montana, New York, and Ohio. This year all these states have either passed PBM reforms, opened investigations into PBM pricing practices and contracts with the state governments, or sued PBMs for overcharging for various services.

It is all the more essential that states pass these laws, given that the Trump administration has withdrawn its PBM rebate proposal. The administration's other proposals to bring down drug costs have also run into obstacles. All fifty states plus Puerto Rico should take matters into their own hands and