The Mississippi Senate passed its version of pharmacy benefit manager reform legislation Tuesday following a heated debate in which some legislators warned that the bill, which is intended to help independent pharmacists and patients, could come at the expense of business interests. 

Republican Sen. Rita Parks has spearheaded pharmacy benefit manager reform efforts in the Senate for years. The Corinth lawmaker offered an amendment — replacing all of the House’s original language — she said would strengthen House Bill 1665 by adding key provisions requested by independent pharmacists to ensure they are paid fairly and transparently for dispensing drugs to patients. The bill passed the Senate with a vote of 44-7 and will now return to the House for further consideration.  

Parks said the bill ensures that patients in rural communities can access health care from independent pharmacists, who have warned with increasing urgency that their businesses could be forced to close because of low reimbursements from pharmacy benefit managers.

“Can we afford to not do anything as a state?” she asked. 

Mississippi lawmakers have proposed bills to regulate pharmacy benefit managers unsuccessfully for several years as other states have passed laws to increase oversight over the companies. A pharmacy benefit reform bill last year made it further in the legislative process than in years past, but died in the House after a lawmaker raised a procedural challenge. 

Pharmacy benefit managers are the middlemen used by health insurance companies and self-insured employer plans. The managers have increasingly drawn scrutiny from policymakers because of their opaque business practices, concerns that their practices could lead to increasing drug prices with little accountability, and market consolidation.

The Senate’s measure maintains many of the provisions in the House version of the bill. These include measures to increase transparency and prohibit spread pricing, or the practice of paying insurers more for drugs than pharmacists in order to inflate pharmacy benefit managers’ profits. 

It would also require pharmacists to be reimbursed at least as much as an affiliate pharmacy or the Mississippi Division of Medicaid, which covers the cost of the drug and a dispensing fee. Pharmacists have long said reimbursements for filling prescriptions are often lower than the cost to acquire and dispense the medications. 

The language also keeps oversight of pharmacy benefit managers under the Board of Pharmacy, rather than transferring it to the insurance commissioner, as in the House’s bill.

Parks’ proposed provisions faced strong opposition from several lawmakers who argued that the suggested payment structure would harm Mississippi businesses.

Sen. Jeremy England, a Republican from Vancleave and the most vocal opponent of the Senate’s version of the bill, advocated for the chamber to pass the House’s version — which he said would still constitute meaningful pharmacy benefit manager reform — and send it to Gov. Tate Reeves. 

England said the Senate’s proposed text would drive up the cost of prescriptions, which would then be passed on to Mississippi businesses and their employees. He pointed to a letter from the Mississippi Business Alliance that warned rising prescription drug costs could force employers to do away with health plans for their employees altogether. 

Parks said the business community has consistently employed “scare tactics” that discourage legislators from voting for pharmacy benefit reform legislation but have provided little evidence that prescription drug costs will rise if the Legislature passes a bill that requires a specific reimbursement model. 

Parks said data from the Division of Medicaid, which implemented their current reimbursement policy in 2017, generated tens of millions of dollars in savings.

In an attempt to force legislators to continue discussing provisions, England made a failed motion to return language into the legislation that could force the bill into final negotiations between the House and Senate — language he had requested to be added in the Senate Public Health and Welfare committee but was removed by Parks on the Senate floor.

England also argued that having the Board of Pharmacy regulate pharmacy benefit managers presents a conflict of interest, since most board members are pharmacists.

Parks previously said that Insurance Commissioner Mike Chaney told her he believes pharmacy benefit managers should be regulated by the Board of Pharmacy and that transferring those responsibilities to the Mississippi Insurance Department could take at least two years, which would slow down relief for independent pharmacists.

Speaking in opposition to Parks’ language, England presented a memo from the Legislative Budget Office estimating the bill would add $34 million in costs to the State Health Plan. 

He warned that the high cost could impact civil servants covered by the State Health Plan, like firefighters and policemen, and potentially limit the Legislature’s ability to approve a teacher pay raise this session, a topic that has been the focus of intense debate.

“This is bad policy,” England said. “This is going to cost our job creators money.”

Sen. Daniel Sparks, a Republican from Belmont, pointed out that the estimate was provided by CVS, the company that owns CVS Caremark, one of the nation’s largest pharmacy benefit managers. 

Parks said independent pharmacists would be forced out of business without a new payment model that includes the costs of dispensing medications.

“They’re not asking for special treatment, they’re asking for a fair reimbursement system,” she said.