(The Center Square) – A bill that seeks to control the rising cost of prescription drugs while also offering financial help for many small, independent pharmacies has passed both chambers of the Illinois legislature.
The Prescription Drug Affordability Act puts in place new regulations and imposes new fees on pharmacy benefit managers (PBMs). PBMs act as third-party intermediaries in the insurance industry who manage prescription drug benefits on behalf of insurance plans.
The measure also ends the practice of what is called “spread pricing,” which is leading to the closure of small town pharmacies.
“It is when the PBM charges a health plan one price for medication but reimburses the pharmacy at a much lower amount,” said the bill’s sponsor, state Rep. Natalie Manley, D-Joliet. “Quite frankly, it creates an unsustainable business model.”
The legislation also restricts PBMs from profiting from the sale of drugs to pharmacies and would require them to return 100% of pharmacy rebates back to the individuals or sponsoring organizations.
“This really transformational piece of legislation will position Illinois to lead the nation on the topic of prescription drug affordability,” said state Rep. Ryan Spain, R-Peoria.
The bill also prohibits PBMs from “steering” insured patients to their own affiliated pharmacies.
Pharmaceutical industry lobbyists argued many provisions of the bill, including the fee levied on PBMs, will actually end up being passed on to insurance plans and consumers.
“Predatory pharmacy benefit managers have been the middlemen whose business practices too often jack up prescription drug prices and shut down small, independent pharmacies that are frequently rural communities’ lone options when people are seeking medications they need,” Gov. J.B. Pritzker said in a statement. “I’m grateful for the General Assembly’s broad bipartisan partnership with me to require pharmacy benefit managers to become responsible actors and lower prescription drug prices.”
