Business Organization Supports Pharmacy Rights Legislation
November 13, 2014 (Lansing) – The state’s leading small
business organization, the National Federation of Independent Business
(NFIB), urged the House Insurance Committee to support legislation aimed
at ending unfair business practices against small community pharmacies.
would bring fairness and much needed reform to the current practice of
excluding small independently owned pharmacies from provider panels. The bills
were the subject of a hearing today in the state House Insurance Committee.
Community pharmacies are a classic small business faced with many
challenges”, said NFIB State Director Charlie Owens. “One of their main
challenges is with Pharmacy Benefit Managers (PBMs) as well as hospitals and
other provider plans and facilities that establish pharmacy provider panels
that exclude them from serving their customers in the local area”.
Often PBMs and provider panels are “middlemen” between the health
insurer and the pharmacy. They are their own entity and manage a prescription
drug benefit on behalf of the benefit sponsor, which may be a health plan, a
health maintenance organization, a union or an employer. While the purported purpose
of these provider panels is to administer plan benefits and negotiate prices
between pharmacies and health plans, over time, they have taken control over
many aspects of prescription drug transactions. They have created barriers to
competition in the delivery of pharmacy services in community and long-term
care pharmacy settings that have increased costs, reduced choice, and unfairly
competed against community pharmacies.
“Patients should be allowed to choose their pharmacy and provider
panels and PBMs should not be allowed to create limited networks that make it
more difficult for patients to obtain pharmacy services,” said Owens. “Patients
should not be financially punished for having their prescription filled at
their choice of community pharmacies, instead of provider panel or PBM-owned
mail-order services, retail pharmacies they own, or exclusively contracted
“House Bills 5876 and 5877 seek to accomplish many of these changes
and we urge lawmakers to support them,” said Owens.