Legislative committee examines PBM accountability amid market consolidation and malpractice concerns

In a recent meeting of the North Dakota Senate Appropriations Committee, discussions centered on the growing influence of Pharmacy Benefit Managers (PBMs) in the healthcare landscape and the need for increased oversight and accountability. As the meeting unfolded, committee members were presented with a detailed overview of the current state of PBMs, which control a staggering 80% of the market, often owning both insurance companies and pharmacies.

The speaker highlighted the troubling trend of vertical and horizontal integration among major PBMs, which has raised concerns about anti-competitive practices. Reports from the Federal Trade Commission and various congressional hearings have shed light on these issues, revealing harmful pricing tactics that contribute to rising healthcare costs. For instance, states like Ohio and Kentucky have uncovered significant financial discrepancies, with PBMs allegedly pocketing millions through practices like spread pricing.

In North Dakota, the legislative assembly has previously taken steps to address these concerns, including removing a PBM from Medicaid expansion, which resulted in a $17 million savings for the state. However, challenges remain, particularly regarding the PBM's lack of cooperation during audits, which has hindered transparency efforts.

The proposed House Bill 1584 aims to enhance accountability and oversight of PBMs, building on previous legislation that established a drug pricing fund. This fund, currently holding approximately $2.2 million, is intended to support the insurance commissioner’s office in regulating PBMs. The bill also includes provisions for licensing PBMs, which could generate additional revenue for the state.

As the committee deliberates on the bill, the speaker emphasized the importance of collaboration to refine the proposed measures. With the potential for significant implications on healthcare costs and transparency, the discussions in this meeting reflect a critical moment for North Dakota's approach to managing the influence of PBMs in the healthcare system. The outcome of these deliberations could pave the way for a more accountable and equitable healthcare environment for residents.