GENERAL ASSEMBLY PASSES MAJOR PBM REFORM LEGISLATION Bill Protects Patients Access, Choice, & Transparency for Prescription Drugs
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Legislative Update Friday, May 7, 2021 GENERAL ASSEMBLY PASSES MAJOR PBM REFORM LEGISLATION Bill Protects Patients Access, Choice, & Transparency for Prescription Drugs A bill tightening regulations on companies that manage prescription drug benefits, known as Pharmacy Benefit Managers, or “PBMs,” passed the House and Senate on Tuesday. SB1617/HB1398 carried by Sen. Shane Reeves, R-Murfreesboro, and Rep. Esther Helton, R-East Ridge, seeks to increase patient choice, access, and transparency in obtaining prescription drugs and address problematic practices employed by PBMs. Specifically, the bill is built upon five key pillars: Eliminating PBMs discrimination on 340B entities, which undercut the financial benefits delivered through the federal 340B drug program to community health care clinics; Safeguarding patient choice by prohibiting PBMs from imposing coverage or benefit limitations on medications a patient chooses to receive outside the health plan’s preferred network; Ensuring any drug rebates provided by the manfacturer are passed through the pharmacy directly to the consumer, and that pharmacists are paid their acquisition costs for drugs; Requiring PBMs to report any entitlement benefit percentage to both the plan and covered person; and Ensuring transparency in the PBM industry by freeing up data to provide patients with accurate information at the point of care in order to improve medication adherence. Pharmacy Benefit Managers have long argued their industry helps lower drug costs for patients; however, according to data from the AARP, the average cost of Tennessee prescriptions increased by 58 percent between 2012 and 2017 alone. According to Sen. Reeves who is a pharmacist by trade, the opague nature of the PBM, coupled with its vertical integration of market services, has allowed the industry to divert savings intended for the consumer as profit, thereby artificially inflating health care costs. Although the cost of implementing the legislation exceeds $3 million on a recurring basis, the bill was funded in the state’s budget, signaling broad support by members of the general assembly. It passed the Senate on a 28-4 vote, and the House on a 88-1-1 vote. It now heads to Gov. Lee for signature. LEGISLATURE REACHES CONSENSUS ON MARIJUANA STUDY BILL New Law Creates Cannabis Commission, Allows for Low-THC Oil Despite a similar measure narrowly failing in a House committee last week, the legislature approved a medical cannabis bill this week that combines elements of two separate pieces of legislation as a compromise. SB118/HB490 by Sen. Ferrell Haile, R-Gallatin, and Rep. Bryan Terry, R-Murfreesboro, establishes a nine- member commission— appointed by the House and Senate speakers and Gov. Bill Lee— to study the legalization of medical cannabis and its feasibility as a viable treatment. Unlike in past years, the legislation will call on the commission to convene before the federal government reclassifies marijuana on the Drug Enforcement Administration's drug schedule. A notable win for patient advocates across the state. Additionally, the bill allows patients with nine debilitating illnesses to possess cannabis oil that consists of 0.9% or less THC. That amount constitutes a low dose of THC, slightly above the current legal amount of 0.3% for hemp oil. The illnesses listed in the bill include Alzheimer's disease; ALS; end stage or terminal cancer; Capitol & 5th Public Strategies | 618 Church St. Suite 305 Nashville, TN 37219 | [email protected] 1 inflammatory bowel disease, including Crohn's disease and ulcerative colitis; epilepsy or seizures; multiple sclerosis; Parkinson's disease; HIV or AIDS; and sickle cell disease. Six committees were reopened on the last days of session to specifically pass the legislation after members from both chambers who were for and against an earlier measure reached a deal. Both House Speaker Cameron Sexton, R-Crossville, who had previously supported Terry's larger decriminalization bill, and Lt. Gov. Randy McNally, R-Oak Ridge, who was against the other version, support the compromise legislation. Gov. Bill Lee, who previously opposed Terry’s decriminalization effort, has “removed his philosophical flag," Terry told committee members on Tuesday. Some advocates, including several lawmakers, argue the bill doesn’t go far enough. Sen. Janice Bowling, R- Tullahoma, voiced strong opposition to the bill after her own measure to fully legalize medical marijuana failed earlier this year. Other members, like Rep. John Mark Windle, D-Livingston, expressed his disappointment that the bill would not allow Tennessee farmers to grow the crop. Many members remain philosophically opposed to marijuana in any form. While Terry conceded with many concerns raised by his colleagues, he maintained that small progress was better than no progress at all. The bill narrowly passed the Senate on 20-12 vote on Tuesday. Its House counterpart reflected much broader support, passing on a 74-17 vote Wednesday. Gov. Lee is expected to sign the legislation into law. BILL CREATES PANEL TO HEAR CONSTITUTIONAL CHALLENGES Legislation will Appoint Three-Judge Panel to Hear Challenges to State Laws The general assembly approved a measure on Wednesday that modifies how constitutional challenges to state law will be considered. SB868/HB1130 by Sen. Mike Bell, R-Riceville, and Rep. Andrew Farmer, R-Sevierville, establishes a process for the Tennessee Supreme Court to appoint two additional elected judges to form a panel to hear suits brought against the state, including constitutional claims and redistricting. Under the bill, the chief justice would choose one judge from each of the other two Grand Divisions to join the original judge in each Rep. Andrew Farmer, speaks on HB1130 on Wednesday, May 5, 2021. relevant case. The cases would then be heard Source: The Tennessean in the division where it was first filed. The move to establish a new procedural process comes after several Republican-backed bills and policies were blocked by Davidson County chancery court, including Gov. Lee’s school voucher legislation. The final bill as amended represents a compromise between the two bodies who had initially advanced widely different versions of the legislation. Both of which sought to establish a new court entirely with judges appointed by the governor and re-elected only through retention elections. The compromise takes into consideration voices from outside the capital city and allows a local venue for people who bring lawsuits elsewhere in Tennessee. Appeals to the panel's decisions would still go to the state's normal court of appeals. The legislation passed the Senate with a 27-2 vote and the House with a 67-22-1 vote. Capitol & 5th Public Strategies | 618 Church St. Suite 305 Nashville, TN 37219 | [email protected] 2 .