DeSantis signs legislation to increase prescription drug transparency

JUPITER, Fla. (FLV) – Gov. Ron DeSantis signed the Prescription Drug Reform Act into law on Wednesday.

The legislation which will lower out-of-pocket costs for prescription drugs and create greater accountability and transparency for Pharmacy Benefit Managers (PBMs).

“It is going to reform these problematic practices that have been used by PBMs,” DeSantis said.

PBMs manage prescription drug benefits for insurance companies. They act as the middleman for insurance companies and pharmacies, and can drive up costs for consumers. 

The bill institutes regulatory best practices for PBMs operating in Florida and provides the Office of Insurance Regulation the authority to examine and investigate PBMs and review possible violations of rules, as is done with all insurers in the state.

“One thing they do is called spread pricing. And what they do is when when they charge health plans and payers, they will charge them more for prescription drug than what they actually reimburse to the pharmacy and then they keep the difference,” DeSantis said.

“Another thing they do is, in some claims, the total cost of the drug is actually less than the patient’s co-payment for the drug, and then the PBM will claw back the difference of that, and so that’s not good for the pharmacies, of course, not good for the consumers either,” he said.

“So these are not practices that really benefit anybody, they’re not really adding value to anything, it just somebody’s in the middle of this, and it’s basically an arbitrage opportunity. And so, that’s what we’re doing,” DeSantis said.

DeSantis said there’s also a lot of transparency elements in the legislation, not only for PBMs, but also for prescription drugs and price increases and “making sure that they’re providing the information about why these drugs are going up once they hit a certain threshold.”

The bill reinforces the governor’s commitment to transparency in the cost of prescription drugs by “requiring pharmaceutical companies to disclose price increases for price hikes of 15% within a calendar year or 30% within a three-year period,” according to a press release.

The legislation said PBMs will also have to disclose all organizations affiliated with the applicant, including any affiliated pharmacies or companies within their corporate umbrella.

“We think that that’s something that’s very rare, and we’re going to be tracking the prices of drugs and the increases of drugs,” DeSantis explained.

DeSantis held the press conference with Agency for Health Care Administration Secretary Jason Weida and Department of Elder Affairs Secretary Michelle Branham.

DeSantis announced the legislation in January.

“There’s so much bureaucracy – there’s middle men, a whole host of things built up over the years, there’s a lot of people that make a lot of money and the people that end up paying are the consumers, some of our small businesses, so we wanted to do something about it,” DeSantis said previously.

The bill was sponsored by Sen. Jason Brodeur, R-Lake Mary, in the Senate, and Rep. Linda Chaney, R-St. Petersburg Beach, in the House.