The bill seeks to address the high cost of prescription drugs by targeting the practices of Pharmacy Benefit Managers (PBMs), which are identified as contributing to these costs. It highlights issues such as prioritizing rebates over cost-effectiveness, lack of pricing transparency, and conflicts of interest due to PBMs' relationships with insurance companies and pharmacies. The bill proposes the creation of a new chapter in the General Laws to regulate PBMs, aiming to increase transparency, restrict overcharging, limit harmful utilization management practices, and establish enforcement procedures. It includes definitions to clarify terms used in the chapter and mandates that PBMs provide information to state authorities and the public. Additionally, it requires the executive office of health and human services to exclude PBMs from Medicaid Managed Care Organization contracts starting July 1, 2024.
The bill imposes several specific requirements on PBMs, such as ending practices that lead to "spread pricing" profits, adopting administrative-fee only compensation models, and ensuring pharmacy pass-through pricing. It prohibits PBMs from charging management or administrative fees related to manufacturer-derived revenue and mandates compliance with rules from various state offices. The bill empowers the office of the auditor general to audit PBMs for compliance and authorizes the attorney general to conduct civil and criminal investigations and actions to enforce the bill's provisions. There are no specific or tags provided, so the exact changes to the current law are not detailed in the summary.