Florida Legislators Research on PBM Business Model

Implications: The attention of state legislators to PBM business practices has implications for investors in the healthcare sector as well as the business models PBMS will use in the future.

Analysis:

The Florida Office of Program Policy Analysis and Government Accountability(OOPPGA) does independent research for the Florida Legislature and pursuant to a legislative request last month published a review of PBM business practices.

Due to the number of retirees in Florida prescription drug costs are a jugular issue and we are heading towards a 60 Minutes moment as the media begins to understand how PBM'S business models function.

Prescription drug costs are the single largest component of employee out of pocket expenses for healthcare. The US Supreme Court has already rejected challenges to Maine's PBM Disclosure Law as noted here and excerpted below.

In a key legal setback for pharmacy benefit managers (PBMs), the US Supreme Court shot down a challenge to Maine's controversial law requiring disclosures of prescription drug deals by PBMs. The Maine statute, which was challenged by PBM lobbyists for the Pharmaceutical Care Management Association (PCMA), requires PBMs to disclose rebates, conflicts of interest, and discounts from drug manufacturers that PBMs are retaining as profit rather than passing on to plan sponsors.

With an election year looming and Healthcare a huge campaign issue expect more revelations about PBM business models and the lack of transparency which is completely at odds with consumer driven healthcare trends.