Mandating publicly-accessible websites that offer constituents full disclosure of taxes collected and spent by local governments and requiring price-comparison tools for health care and pharmaceutical consumers have been a trend in state legislatures nationwide for a decade.
A relatively recent strategy, such transparency measures are showing promise raising awareness about how governments collect and spend tax revenues and in lowering costs and enhancing access to health care, especially prescription drugs.
Two such examples have surfaced during Missouri’s 2021 legislative session, which began in June and ends in late May. In fact, the Missouri House has already passed a bill to enhance “community spending” transparency.
House Bill 271, sponsored by Rep. John Wiemann, R-St. Charles, was adopted by the House Feb. 18 in a 149-2 vote. It awaits a first hearing in the Senate.
HB 271 would create the Missouri Local Expenditures Database to track municipality spending and document what vendors local governments contract with.
The database would be managed by the state’s Office of Administration and is similar to the one outlined in a proposed Truth In Taxation bill being debated in Kansas.
Wiemann said HB 271 is “virtually the same bill” as HB 1933, his 2020 measure that passed through the House before stalling in the Senate, with one exception: HB 271 makes participation by municipalities optional unless 30 or more residents petition for it.
Meanwhile, the road for another proposed transparency measure regarding pharmacy benefit managers (PBMs), who operate as the “middle men” between manufacturers, insurers and pharmacies, may find tougher sledding.
HB 834, filed by Rep. Dale Wright, R-Farmington, passed through the House Health & Mental Health Policy Committee Monday despite extensive testimony against it.
Under HB 834, PBMs would be required to file annual reports detailing previous year’s rebates to the Missouri Department of Health and state lawmakers annually beginning in 2023.
According to Congressional Quarterly/Fiscal Note, as of mid-February, there were 46 bills pending in 22 state legislatures related to the “middleman” role of PBMs and such practices as “gag clauses,” “clawbacks” and “spread pricing.”
“Spread pricing,” in which PBMs are compensated by retaining the difference, or “spread,” between the amount they charge a plan sponsor and the amount they reimburse a pharmacy, is targeted in 2021 bills filed in at least 11 state legislatures, including HB 834.
Missouri Pharmacy Association’s Jorgen Schlemeier told the panel the bill “hits straight on what has really been the focus of a lot of attention – what they call the spread on the rebates.”
Representatives from America’s Health Insurance Plans, Cigna insurance and other corporate insurers said the bill will increase prices, signaling HB 834 will be vigorously contested on its committee circuit.
“If you pass this bill, you increase drug prices,” Cigna’s Brian Grace said. “You would destroy the networks PBMs have built to contract with pharmacists for their services and also remove our ability to crack down on bad actors within that network.”
Wright was unsure if PBMs define “bad actors” the same way as Missourians buying prescription drugs would.
“When a plan sponsor hires a PBM to manage a prescription plan, they expect the PBM to act in the sponsor’s best interests,” Wright said. “For PBMs, that means negotiating the lowest possible rates with manufacturers and pharmacies and passing those savings along to consumers. However, PBMs typically hide from clients what they pay and often fail to disclose rebates they negotiate with manufacturers.”
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