(The Center Square) – Governor Gretchen Whitmer on Wednesday signed into law three bills aimed at reducing the price of prescription drugs.
“I am proud to sign this bipartisan legislation that helps us reduce the cost of prescription drugs,” Whitmer said in a statement. “For too long, unlicensed drug benefit managers have been able to engage in practices that increase costs for Michiganders whose lives and health depend on essential prescription drugs like insulin. This bill brings much-needed transparency to our healthcare system and is a testament to what we can do when we put Michiganders first.
Internal Letters (HB) 4348, 4351and 4352 aim to reduce prescription drug costs.
HB 4348 directs the Department of Insurance and Financial Services (DIFS) to license Pharmacy Benefit Managers (PBMs). The bill requires PBMs to file transparency reports and prohibits them from practicing “spread pricing” – raising prescription drug reimbursement costs and signing “gag clauses”.
The PBM must “provide a reasonably adequate and accessible retail network” and would prohibit them from charging a pharmacy to process claims electronically, as well as regulating steps before raising certain drug costs.
HB 4351 will prohibit a PBM or carrier from requiring a patient to pay a co-payment greater than the cost of the drug dispensed.
HB 4352 requires pharmacists to provide the price of a comparative drug or generic drug without being asked.
A Senate Tax Agency report estimates an annual cost of the program at $330,000 – or $110,000 for three additional full-time equivalent DIFS employees to administer the PBM licensing program. However, the exact costs vary. The bill would allow the PBM program to administer fines and fees, but it’s unclear whether those revenues would fully offset the expenses.
Meijer Chairman and CEO Rick Keyes welcomed the passage of the bill.
“Meijer cares about the communities we serve and is proud to support this legislation, which will help reduce the costs of quality medications for our 2.2 million Michigan pharmacy customers,” Keyes said in a statement. “The 2,200 members of our Michigan pharmacy team are working hard to serve these customers, from dispensing 18 million prescriptions to administering 1.8 million COVID-19 vaccines across Michigan. This bill makes pricing practices fairer, increases transparency, and helps our customers afford the medicines they need to live healthy lives.
The Senate dominated by the GOP approved the bill on February 16, 2022.
“In 2017, 32% of Michigan residents stopped taking their medications as prescribed due to cost,” Rep. Julie Calley, the bill’s sponsor, said in a statement. “This impactful new law will directly improve affordability and access to prescriptions. It also adds much-needed transparency to our healthcare system.