Gov. Gretchen Whitmer signs bill regulating PBMs in Michigan


Democratic Gov. Gretchen Whitmer signed legislation Wednesday into law that creates Michigan’s first regulatory structure governing pharmacy benefit managers and reins in what the Republican bill sponsor called “abusive” business tactics of PBMs.

House Bill 4348 creates state licensure of PBMs and bans the third-party administrators of prescription drug benefits from steering customers to certain pharmacies and bars them from so-called clawback tactics where they require pharmacies to fork over a portion of a customer’s co-payment.

“This (new law) reins in a number of nefarious ways that PBMs have started to create revenue, including the clawbacks,” said state Rep. Julie Calley, a Ionia County Republican who sponsored the bill.

Whitmer, Calley and other legislators gathered Wednesday morning for bill-signing ceremony at a Meijer Inc. store on Lansing’s west side. They were joined by Meijer President & CEO Rick Keyes and pharmacists who work for the Walker-based retailer.

The governor said the new law will help customers understand the “back end” pricing of prescription drugs and “lower inflated prices.”

“The bipartisan legislation will improve transparency and ensure that we’ve got fair drug pricing,” Whitmer said.

Meijer, which goes head-to-head for prescription drug sales with CVS, Walgreens, Rite-Aid and other national chains, supported the legislation because it “brings transparency to drug pricing, which allows us to plan,” Keyes said.

“I think it also ensures the viability of pharmacy across our state and access to healthcare and our healthcare professionals,” Keyes told Crain’s. “We’re really excited about that and the ability to have accountability and transparency for our patients.”

One of the most common forms of clawbacks, Calley said, is when a PBM requires a customer to pay a $30 copay at the pharmacy counter, while the cost was actually $15.

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