Georgia bill aims to take on prescription drug costs

A bill approved by Georgia’s state House on Wednesday would restrict what one lawmaker called “heinous” practices by pharmacy benefit managers — companies that run prescription drug coverage for insurers and other groups.

The bill would require so-called PBMs to pass along any discounts they receive from drug manufacturers for a particular medication to consumers and forbid PBMs from denying coverage or requiring prior authorization for a lower cost drug. It would also subject them to surcharges for ordering patients to use an affiliated pharmacy to get their prescriptions and require them to cover the cost of prescriptions at other pharmacies.

It passed the House 165 to 1. A companion bill is pending in the state Senate.

Supporters of the measure are concerned that PBMs — viewed as middlemen by critics — are overcharging patients, squeezing pharmacies and stifling competition that could bring down drug costs.

“Please stand up with me against these heinous, heinous practices by these large companies,” said state Rep. David Knight, R-Griffin, as he outlined provisions of the bill on the House floor.

PBMs set up lists of covered drugs that are often broken into tiers with different pricing levels for the patient. They negotiate rebates for some drugs to help offset high initial or list prices.

Three PBMs — CVS-Caremark, Express Scripts and OptumRX — dominate the market.

PBMs say drug makers are responsible for setting initial prices, and they use their purchasing power to achieve savings.

“Pharmacy benefit managers are working on behalf of patients to reduce prescription drug costs,” said Greg Lopes, a spokesman for the Pharmaceutical Care Management Association, in a statement. The association represents PBMs.

The Georgia legislation would increase drug costs by billions of dollars over the next decade, and was being backed by special interests such as drug manufacturers and independent pharmacies because it would increase their profits, Lopes said.