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Minutes for HB2598 - Committee on Insurance
Short Title
Providing for enhanced regulation of pharmacy benefits managers and requiring licensure of such entities rather than registration of such managers.
Minutes Content for Mon, Feb 17, 2020
Chairperson Vickrey opened the hearing on HB 2598. Eileen Ma, Assistant Revisor of Statues, briefed the members on the bill (Attachment 1)
Aaron Dunkle testified in support of the bill. He described his association and who they represented. He said the bill would require transparency, oversight and accountability by protecting consumer choice; provided transparency to the beneficiary, plan sponsor and Kansas Insurance Department; and offered oversight of pharmacy benefit manager (PBM) activities. Further, the three largest PBMs were owned by companies that also owned insurance companies, mail-order pharmacies, and specialty pharmacies. This vertical integration created additional issues addressed in the bill, including PBMs steering consumers to specific pharmacies within their network. (Attachment 2).
Sam Boyajian testified in support of the bill. He said he previously owned a pharmacy and was familiar with the practices of PBMs. Dealing with PBMs, in fact, was a factor in the decision to close his pharmacy. He said the top three PBMs controlled 80% of prescriptions filled in the country and regulated which pharmacy a consumer must use, what drugs the doctor could prescribe, what the copay would be and more. He said because there was no oversight or transparency, the PBMs operated with impunity at the expense of sponsors, pharmacies and consumers (Attachment 3).
Dared Price testified in support of the bill. He said he was president of Price Pharmacies with pharmacies in mostly rural communities in South Central Kansas. Since he purchased the first store in 2010 he had witnessed PBMs morph into multi-billion-dollar companies that steered business out of state, cost local employers more money and raised the cost of prescription drugs. When he purchased a pharmacy in Derby he discovered they were no longer in the network. Calls attempting to discover the reason why were unsuccessful. Last, he related his personal story about his father-in-law's cancer diagnoses. Since his medication had to be ordered through a mail-order company, he had no ability to consult in person with a pharmacist (Attachment 4).
James Chism testified in support of the bill. He said one of his duties as HR Director for the City of Winfield was to negotiate, monitor and review their employee health program. He said after he discovered insurance companies had a large cushion built into their annual renewals he tried to find data on their plan's drug usage over the last three years and the costs associated with each drug. He made numerous attempts with the PBM but was put off, referred to someone else, and finally, they ceased communication with him. He said the secrecy did nothing to alleviate their suspicions or clarify the City's relationship to the PBM (Attachment 5).
Emily Schick testified in support of the bill. She gave examples of how individuals were impacted by PBMs that referred consumers to other pharmacies. If the PBM required prescriptions be filled by mail order, they were often not timely received or experienced temperature fluctuation that harmed some medications. Often a PBM required a customer purchase a higher-cost name-brand drug when a less costly, generic drug sufficed. Communicating with a customer in person allowed her to answer questions and determine the potential for drug interactions, including with any over-the-counter medication. She provided computer screen prints that compared prices at a PBM "specialty" pharmacy versus the price at a local pharmacy and the difference between name brand in the PBM's network versus generic (Attachment 6).
Marva Homrighausen testified in support of the bill. She recounted her difficulties with a Tier 5 biologic drug prescription. She had been filling it at a local pharmacy but was told she had to get the drug from a specialty mail-order pharmacy. She appealed their decision, won but continued having problems with the PMB circumventing both her and her physician, and the pharmacy's efforts to fill it locally (Attachment 7).
Michael Halliwell and Amanda Applegate provided written testimony in support of the bill (Attachment 8)
Katy Dolinar provided written testimony in support of the bill (Attachment 9).
Joseph Koechner provided written testimony in support of the bill (Attachment 10).
Kezia Uhrich provided written testimony in support of the bill (Attachment 11).
Jeff Sigler provided written testimony in support of the bill (Attachment 12)
Denise Cyzman provided written testimony in support of the bill (Attachment 13).
Kent and Heidi Happel provided written testimony in support of the bill (Attachment 14).
Kenny Ard provided written testimony in support of the bill (Attachment 15).
Laura Ard provided written testimony in support of the bill (Attachment 16).
Kevin Latinis, MD, provided written testimony in support of the bill (Attachment 17).
J. Benjamin Quinton provided written testimony in support of the bill (Attachment 18)
Allie Jo Shipman provided written testimony in support of the bill (Attachment 19).
Eric Moeder provided written testimony in support of the bill (Attachment 20).
Matthew Magner, JD, provided written testimony in support of the bill (Attachment 21).
Rachel Sipe provided written testimony in support of the bill (Attachment 22).
Kristen Pettey provided written testimony in support of the bill (Attachment 23).
Shannon and Thane Buss provided written testimony in support of the bill (Attachment 24).
Patrick Hilger provided written testimony in support of the bill (Attachment 25).
Dr. Marty Turner provided written testimony in support of the bill (Attachment 26).
Dr. Nathan Reed provided written testimony in support of the bill (Attachment 27).
Angela Horsfall provided written testimony in support of the bill (Attachment 28).
Members asked questions of the proponents including: how long it took for insurance to pay a pharmacy, the Texas and West Virginia efforts on PBMs, the corporate structure (Corporation, LLC, etc) of Kansas PMBs, whether PMBs were private or public companies, details of Emily Schick's computer screen prints, whether cost information about purchase of generic drugs or locally could be disclosed to the customer, who absorbed the cost related to a previously heard bill on an insulin cap, a comparison of school health insurance costs and the City of Winfield costs, the 340B federal pricing program and dispensing drugs by clinics, "claw back" fees against the pharmacies and why the insurance companies don't find a better method than PBMs.
There being no other proponents or questions Chairperson Vickrey closed the hearing on HB 2498. Opponents to the bill were to be heard February 19.
The Chairperson announced the subcommittee (Chairperson Vickrey and Representatives Cox, Neighbor, Bishop and Waggoner) would meet after the meeting to discuss HB 2459.
The meeting was adjourned at 5:10 p.m.
