Montana Public Radio

Rosendale-Backed Rx Bill Advances In House

Apr 3, 2019

A plan for new regulations on insurance companies and their obscure contractors in the prescription drug supply chain is moving forward in the Montana Legislature.

The bill coming from State Insurance Commissioner Matt Rosendale would put new rules on the contracts between health insurance companies and pharmacy benefit managers, or PBMs.

PBMs work out deals between drug manufacturers, pharmacies and payers, including government health plans and insurance companies. PBMs and some health insurers say those negotiations help lower drug costs.

However, on the House floor Wednesday, Rep. Gordon Pierson, a Democrat from Deer Lodge, joined other lawmakers saying those deals can lead to unfair prices and profit making.

Senate Bill 71 already passed out of the Senate on a 37-13 vote. Pierson is carrying the bill in the House.

"Bottom line, Senate Bill 71 will save consumers money by lowering the cost of medications and insurance premiums, and provide more transparency in a highly complex industry," Pierson says.

Senate Bill 71 only applies to individual health insurance plans in Montana, which make up about 7 percent of plans in the state. That means the bill would directly impact about 70,000 people, according to the State Insurance Commissioner's Office.

Insurance companies, which could fall under the regulation of the bill, say the rules could leave them vulnerable to fines for the actions of pharmacy benefit managers, which are outside of their control.

PBMs say the proposed requirements for their contracts with health insurance will handcuff their ability to negotiate lower drug prices.

However bipartisan frustration over the rising costs of prescription drugs is giving the legislation, and other bills targeting the issue, a glide path.

Senate Bill 71 cleared its first vote on the House floor, Wednesday, 82-18. A final vote is expected in the coming days.

A separate policy placing new regulations on the relationship between PBMs and retail pharmacies has already passed both chambers of the legislature, facing little opposition along the way. Governor Steve Bullock and Senator Steve Fitzpatrick, a Republican from Great Falls, held a ceremonial signing of that bill, Senate Bill 83, Wednesday morning.