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Politics & Government

Delaware Insurance Dept. to take aim at Pharmacy Benefit Managers

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Delaware Public Media
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The Delaware Department of Insurance will lead a state effort to regulate the pharmacy benefit manager industry.

The Department of Insurance will write regulations shortly, seeking areas to save people money and close loopholes as a new law goes into effect.

HB 219, passed by the General Assembly earlier this year, aims to lower drug costs while preserving local pharmacies.

The state is trying to rein in Pharmacy Benefit Managers (PBMs). They act as intermediaries for prescription drug plans, influencing what medications are covered and the costs of those drugs for consumers and pharmacies.

Insurance Commissioner Trinidad Navarro explains what tools the state has to rein PBMs in.

"In the future, we will be able to take corrective and enforcement actions such levying a fine or even going as far as revoking a PBMs authority to operate in the state if repetitive, I guess egregious, actions continue to occur," said Navarro. "We're already registering PBMs and we have nearly 30 registered so far."

Navarro says under the new law his office will also have other tools to achieve those goals.

"The Department of Insurance now has the ability to investigate PBMs, can enforce consumer protection measures, and incentivize corrections through regulatory authority," said Navarro.

The new law also aims to solve many issues of access and unequal treatment through use of the National Average Drug Acquisition Cost for pharmacy reimbursement, prohibiting unequal payments to unaffiliated pharmacies.

To better understand PBM’s existing processes, the department recently began introductory Market Conduct exams on registered PBMs. The initial examinations will not result in fines or enforcement actions, but they will highlight areas for improvement, including those that are not compliant with the new law and will require corrective action plans.