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Minutes for SB351 - Committee on Financial Institutions and Insurance
Short Title
Enacting the Kansas pharmacy patients fair practices act.
Minutes Content for Wed, Feb 14, 2018
Chairperson Longbine called the meeting to order and opened the hearing on SB351.
Eileen Ma, Assistant Revisor of Statutes, presented a brief overview of the bill and responded to questions from Senators Givens and Wilborn pertaining to the definition of a "pharmacy benefit manager (PBM)" and whether this bill was similar to one brought two years ago. Ms. Ma explained that a PBM is defined in SB351 in line 18, subsection (5), which also refers to K.S.A. 2017 Supp. 40-3822 and amendments thereto -- generally meaning the PBM is the organization that provides the pharmacy benefits for one's health plan. She also acknowledged that some legislation was brought about two years ago pertaining to PBMs and that SB351 seeks to further advance consumer protections under the law. There being no other questions at this time, the Chairperson called for proponent testimony.
Aaron Dunkel, Executive Director, Kansas Pharmacists Association (KPhA), testified in support of SB351. He told members that this bill would provide protections for patients related to medication costs, alternative medications and their choice of pharmacy providers. He explained that the bill eliminates several practices that historically have been found in contracts provided to pharmacies by PBMs. An example of an historical practice SB351 would eliminate is to restrict patients from the requirement to pay a copay for their medications that is greater than the cost of the total reimbursement to the pharmacy for the transaction. Another practice the bill would restrict would be mandatory mail order, where the PBMs require the patient to use his or her mail order pharmacy for a prescription in order to receive the lowest price on the drug. (Attachment 1)
There being no other questions or proponent testimony, Chairperson Longbine called for opponent testimony.
LuGina Mendez-Harper, Governmental Affairs Principal with Prime Therapeutics testified against passage of SB351. She explained that Prime Therapeutics is a not-for-profit PBM owned by 17 Blue Cross Blue Shield plans including BCBSKS. She told members that her organization is against tying pharmacist reimbursement to what the member pays at the point of sale. She posed that pharmacist reimbursement is a contractual matter between the pharmacy and PBM on behalf of the health plan or employee group. (Attachment 2)
Alysia Heller, Director of Pharmacy Operations at OptumRx in Overland Park, Kansas spoke in opposition to SB351. She explained that UnitedHealth Group is comprised of two business entities, UnitedHealthcare, their health benefits business, and Optum, their health care services business. OptumRX, their pharmacy care services company, uses the most frequent health care consumer touch point -- the pharmacy -- to provide distinctive whole-person care, turning a traditionally disconnected, transactional experience into one that integrates the entire health care experience to improve outcomes and reduce costs. Ms. Heller told members that her employer's evaluation of SB351 shows it will have strong negative impacts and is detrimental to the Kansas health care system because it will:
- undermine PBMs' ability to help control prescription drug costs;
- increase drug cost to State, employers, and consumers;
- interfere in the contractual relationship between a PBM and pharmacy; and
- provide no meaningful benefits to patients.
Ms. Heller opposed the bill as drafted, but stated she would welcome the opportunity to work with the Legislature to advance workable policy solutions to reduce drug costs for Kansans. (Attachment 3)
Larrie Ann Brown, Kansas Legislative Counsel for Express Scripts also presented opposition testimony to SB351. Ms. Brown noted that employers know lower copayments help their members stay on their prescription therapy. However, there are instances, particularly with lower-cost generics, where a pharmacy's price for a medication is less than a patient's established copay. When the price for a medication at a particular pharmacy is less than the copay associated with that formulary tier, Express Scripts' members pay the lowest price, their drug utilization is captured in their claims system, which allows members and pharmacists to benefit from real-time clinical safety reviews of a patient's medications. (Attachment 4)
The opponents responded to questions from Senators Rogers, Givens, and Pyle. The Chairperson also told members that a number of PBMs are exhibiting in the building today and are here to visit with members, pharmacists, and consumers.
Chairperson Longbine pointed the committee's attention to the written-only opponent testimony of William W. Sneed, Retained Counsel for America's Health Insurance Plans. (Attachment 5)
There being no further questions or discussion, and no other proponent, opponent, or neutral testimony submitted, Chairperson Longbine closed the hearing on SB351.
