Rep. David Knight Announces Legislation to Reduce Prescription Costs, Improve Regulations for Pharmacy Benefit Managers Signed Into Law
ATLANTA – State Representative David Knight (R-Griffin) today announced that Governor Brian Kemp signed House bills 918 and 946 into law this week. Passed during the 2020 legislative session, these two bills seek to reduce the costs of prescriptions for citizens by improving regulations for pharmacy benefits managers (PBMs) that operate in Georgia.
“Through these two critical legislative measures, Georgia will now have some of the toughest laws regarding how pharmacy benefit managers operate,” said Rep. Knight. “These bills help the state ensure that Georgians are receiving their prescriptions at fair and competitive prices, as well as reducing the burden PBMs place on taxpayer funds. I am proud of the Georgia House Majority Caucus’ work to make drastic improvements to better regulate how PBMs operate in our state, while safeguarding Georgians, especially during this economic and public health crisis.”
House Bill 946 seeks to create transparency for prescription drug prices and allow the state to better oversee pharmacy benefits managers. Under this legislation, physicians who are employed or contracted by a PBM can only provide advisement within a specialty that they have worked in for the past five years. Additionally, when the Department of Community Health (DCH) enters into PBM contracts, the department is encouraged to require the use of a licensed Georgia physician for prior authorization, step therapy appeals or determination reviews for contracts and amendments entered into with a PBM. DCH also has authority over PBM audits that affect those enrolled in Medicaid and state benefit plans. These measures also update the PBM price reporting process, which is the heart of this bill. PBMs will be required to submit a report to the Georgia Department of Insurance every four months that details all drugs appearing on the national average drug acquisition cost list that were reimbursed at certain rates, and PBMs will be responsible for the cost of publishing these reports for the public. This bill also requires PBMs to offer contract options to pass on 100 percent of all rebates that it receives from pharmaceutical manufacturers to patient’s health insurance plan. Also included is a provision that will prevent PBMs from “spread pricing” in Medicaid, state benefit plans, as well as county and municipalities. HB 946 also contains significant patient protections including strengthening anti-steering laws, requiring that accepted copay assistance be applied to patient plan deductibles and prohibiting PBMs from withholding coverage for lower cost therapeutically equivalent drugs. HB 946 was signed into law on Wednesday, August 5, 2020.
House Bill 918 amends “The Pharmacy Audit Bill of Rights” to place limitations on the size and frequency of pharmacy audits by PBMs, which PBMs currently use as a way to recapture money from pharmacists around the state. It would also exclude the cost of claims by prescription number as a criterion in determining which claims to audit. These audits will not be allowed to include more than 100 prescriptions per audit, and an entity will not be able to audit more than 200 prescriptions within a 12-month period. More importantly, this bill strengthens Georgia’s steering laws which prohibit a pharmacy affiliated with PBMs or insurers from billing for prescriptions that have been steered by their affiliate PBM or insurer. The definition of “steering” in Georgia law now includes a PBM imposing monetary penalties on a patient when he/she chooses to use a non-PBM affiliated pharmacy. HB 918 was signed into law on Tuesday, August 4, 2020.
For more information on House Bill 918, please click here.
For more information on House Bill 946, please click here.
Representative David Knight represents the citizens of District 130, which includes portions of Henry, Lamar and Spalding counties. He was elected to the House of Representatives in 2004 and currently serves as Chairman of the Appropriations Subcommittee on Higher Education. He also serves on the Banks & Banking, Higher Education, Rules, Small Business Development and Ways & Means committees.