State announces new rules for pharmacy managers

DOVER — The Delaware Department of Insurance announced Monday it has finalized new regulations for pharmacy benefit managers as required by legislation approved by the General Assembly.
Pharmacy benefit managers administer prescription drug plans for health insurers, large employers, Medicare Part D plans and other groups, determining the list of medications that a plan will cover and how much drugs will cost. These companies, however, have not widely used their power to reduce the costs of medications and insurance, according to the Department of Insurance.

The new regulations will add a level of oversight and transparency, allowing the department to investigate companies, require corrective actions and suspend, deny or revoke a pharmacy benefit manager’s registration.

“Increasing the affordability of prescriptions and healthcare increases their accessibility, creating a healthier Delaware. These steps towards regulating this multi-billion-dollar industry will save residents money, and could save residents lives,” Insurance Commissioner Trinidad Navarro said in a statement.

Created by lawmakers, the Pharmacy Reimbursement Task Force and the former Interagency Pharmaceuticals Purchasing Study Group examined ways to lower the price of medications. Working in concert with lawmakers, the Department of Insurance planned to propose a bill in regard to pharmacy benefit managers this year, but it got derailed by COVID-19.

“Pharmacy benefit managers are companies that have, through the years, gained significant control over the supply, demand, and cost of pharmaceuticals — around 80% of the market — with little to no regulation at all,” Rep. Ray Seigfried, D-Arden, said in a statement. “They are, in essence, governing both the cost and flow of medicines between people in need of medication and the manufacturer, health insurance company, community pharmacies, and the company providing medication benefits. This has led to higher costs for residents who don’t really have a choice in whether to pay for lifesaving medication.”