Wisconsin Medical Society / Medigram

Two bills that the Wisconsin Medical Society has been tracking received votes on the Assembly floor this week. The first was the CARES Act (AB 575) which passed on a voice vote on the floor. The version that passed was the amended version that the Society worked on with the bill authors, physician assistants and hospitals. The Society was neutral on this amended version. Information on the parameters of the amended bill can be found here.

The second bill that passed related to pharmacy benefit managers or PBMs (AB 114). Like the CARES Act, the PBM bill that passed was a substitute amendment and involved significant changes to the initial bill after substantial discussions between the PBMs, pharmacies and insurers.

Highlights of the PBM bill include:

• new licensing and registration requirements created for PBMs
• “gag clauses” repealed
• list of audit requirements of PBMs
• transparency requirements
• drug substitution provisions
• cost-sharing limitations

The substitute amendment kept similar language to the original bill regarding prohibitions on gag clauses (which prevent pharmacists from informing patients that a given medication would be cheaper if they paid for it out-of-pocket rather than with insurance). Similar language was also maintained regarding cost-sharing limitations, whereby PBMs would not be able to require patients to pay more than the lower amount of either their copay, or what they would pay had they not used insurance to purchase the drug. There is also language prohibiting PBMs from rejecting a pharmacy claim without due cause.

The two versions differed significantly on the other provisions in the bill. Regarding licensure, the amended bill only requires PBMs to be licensed by the state, but not registered. PBMs would also not have to adhere to a list of rules that would have been created by the Office of the Commissioner of Insurance (OCI). The network requirements also differed in that rather than adhere to stipulations regarding network adequacy and distance, PBMs would only be required to provide pharmacies with a written notice of certification and accreditation requirements. There were also significant differences between the two bills on the audit requirements and processes of PBMs.

On the transparency end, PBMs will be required to submit reports to OCI on the aggregate rebates they received from manufacturers and did not pass through to insurers. These reports will not be made public on the grounds that they are “trade secrets” under the amended bill. Conversely, pharmacies will have to make publicly available the retail price of the 100 most commonly prescribed drugs on a monthly basis.

The PBM passed the Assembly 96-0 on Tuesday and will head to the Senate for its final floor session.

Please contact HJ Waukau with any questions.