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New State Law on Generic Pricing Upsets PBMs
The law could restrict the use of less-expensive generics with the availability of newer, more-expensive drugs.
The pharmacy benefits industry is challenging a new state law, trying to protect a key management tool that insurers, employer groups and public payers have been relying on for cost stability.
The Pharmaceutical Care Management Association wants to overturn a new Iowa law regulating maximum allowable cost lists for generic drugs, arguing that any state involvement in the practice is preempted by the federal Employee Retirement Income Security Act’s national framework.
Enacted with the support of the National Community Pharmacists Association, Iowa’s law took effect in July, and joined similar laws on the books in 15 other states aimed at giving pharmacies greater bargaining power at the hands of maximum cost lists.
Iowa’s law gives the state insurance commissioner the ability to require pharmacy benefit managers to disclose their pricing methodologies to pharmacies. For drugs subject to the maximum reimbursement list, the law requires PBMs to inform pharmacies of their pricing data sources and let them comment, contest or appeal the maximum rates — and lets pharmacies claim payment retroactively for any inaccurate pricing in the past.
Read the complete report: http://bit.ly/Yn2tII
Source: Healthcare Payer News
Managed Care Reflections: A Q&A With Ge Bai, PhD, CPA
October 2nd 2025To mark the 30th anniversary of The American Journal of Managed Care, each issue in 2025 includes a special feature: reflections from a thought leader on what has changed—and what has not—over the past 3 decades and what’s next for managed care. The October issue features a conversation with Ge Bai, PhD, CPA, professor of accounting at Johns Hopkins Carey Business School and professor of health policy and management at Johns Hopkins Bloomberg School of Public Health in Baltimore, Maryland.
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