Missouri Moves for Fairness and Transparency for Pharmacy Benefit Managers

In a bold move to protect patients, independent pharmacies and healthcare plan sponsors, Missouri lawmakers have introduced landmark legislation aimed at reforming the practices of pharmacy benefit managers (PBMs). Senator Jill Carter (R-32) and Representative John Hewkin (R-120) have put forward dual bills, SB 984 and HB 1850, that promise to bring a new era of transparency, accountability and fairness to the state’s pharmacy landscape.

Addressing a National Issue, Leading with Local Solutions

Pharmacy benefit managers play a pivotal role in determining how much patients pay for their medications and how pharmacies are reimbursed. However, lack of transparency and inconsistent regulations have led to pricing disparities and confusion for both patients and providers. Missouri’s proposed legislation follows a national trend, with more than 20 states introducing similar bills in 2024 alone.

Key Provisions: Putting Patients and Pharmacies First

Redefining Transparency and Accountability:

The new legislation updates critical definitions and regulations, including “covered person,” “pharmacy benefits manager rebate aggregator,” “pharmacy claims data” and “rebate”, to ensure clarity in how costs are calculated and communicated.

Fair Auditing and Recoupment Practices

If enacted, the legislation would introduce robust safeguards to ensure audits are fair, transparent and conducted by qualified professionals:

• Clinical Judgement by Licensed Pharmacists: All audits involving clinical judgment must be conducted or reviewed by a Missouri-licensed pharmacist, who will be available to discuss findings with the pharmacy.
• Right to Correct Errors: Pharmacies can amend claims within 30 days to correct simple clerical errors, reducing unnecessary financial penalties.
• Limits on Audits: Audits are limited to 25 randomly selected prescriptions, and no pharmacy can be audited more than twice per year.
• Protection from Overreach: Recoupments must be based on actual errors, not on documentation or duties beyond those required by law. Auditors cannot be compensated based on the amount recouped, and fees can only be charged in cases of proven fraud.

Enforcing Accountability and Fiduciary Duty

The Department of Commerce and Insurance would oversee enforcement, with the authority to audit PBMs directly. Importantly, if enacted, PBMs would owe a fiduciary duty to the plan sponsors they serve, legally obligating them to act in the best interests of their clients.

In addition, if enacted, plan sponsors would have access to detailed pharmacy claims data, enabling them to make informed decisions and detect any pricing irregularities. PBMs would also be required to submit documentation for any benefit design that encourages or mandates the use of affiliated pharmacies.

Moving Forward: A Stronger, Fairer Pharmacy System for Missouri

In summary, Missouri’s proposed legislation, SB 984 and HB 1850, sets a new standard for transparency, fairness, and accountability in pharmacy benefit management. By redefining key terms, strengthening audit protections, supporting critical access pharmacies and establishing clear fiduciary duties for PBMs, these bills aim to protect patients, empower pharmacies and ensure healthcare dollars are used wisely.