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Gov. Whitmer signs bills to regulate pharmaceutical intermediaries

Steve Carmody
Michigan Radio

Bills regulating prescription drug intermediaries known as “pharmacy benefit managers” received the governor’s signature Wednesday.

Pharmacy benefit managers are third-party groups that insurers often work with to handle prescription drug programs.

Supporters of the new laws say methods benefit managers use can raise drug costs.

Governor Gretchen Whitmer said the legislation will help ensure transparency and fair prices.

“This is a moment where we have created an expectation, a standard, and codified it, so now we’ll be able to implement it,” Whitmer said at a press conference to announce the bill signings.

Critics of the legislation have said drug manufacturers are more to blame for high drug costs than pharmacy benefit managers.

The new laws ban tactics like “spread pricing.” That’s when groups reimburse pharmacies less than an insurer paid for medication.

State Representative Julie Calley (R-Portland) sponsored the bill to create the Pharmacy Benefit Manager Licensure and Regulation Act. She said practices like spread pricing can hurt pharmacies.

"If your health plan is willing to pay a certain amount, you should be getting the direct value for that, and that keeps your pharmacy doors open. We have a number of pharmacies around the state, not just rural but also urban, who came to us in this process and said, ‘We’re living on the edge. We may not be able to stay open,’” Calley said.

The legislation will require pharmacy benefit managers to file an annual transparency report with the state.

Opponents to the new laws have previously said efforts to reduce prescription drug prices need to include drug manufacturers.