Gov Pritzker Signs Bill Creating Regulatory Framework for PBMs, to Lower Prescription Drug Costs

August 26, 2019 – Working to rein in the rising costs of prescription drugs in Illinois, Governor JB Pritzker signed legislation that creates the state’s first comprehensive regulatory framework for pharmacy benefit managers, or PBMs, which negotiate drug prices and benefits on behalf of insurance plans. 

“Lowering health care costs for Illinois families is one of my top priorities as governor, and I’m proud this legislation will regulate pharmacy benefit managers to put patients first,” said Governor JB Pritzker. “With this new law on the books, we’re increasing access to life-saving prescription drugs and taking steps to reduce out-of-pocket costs so every Illinoisan can live a healthy life.”

Falling under the Illinois Department of Insurance, the new PBM regulations take several steps to increase access to health care and protect patients:

  • Requires insurers to apply third-party payments, discounts, vouchers and co-pay cards to a deductible, the co-pay or out-of-pocket maximum associated with health insurance
  • Prevents gag clauses which limit pharmacists from advising patients when lower-cost alternatives may be available or when paying cash is cheaper than using insurance
  • Protects consumers entering the emergency room from being denied coverage, even if their ailment turns out to be a non-emergency
  • Provides more transparency in the pricing and reimbursement models PBM utilize by requiring HFS to approval contracts that impact Medicaid

House Bill 465 takes effect on January 1, 2020.

Drug prices continue to skyrocket, forcing patients to pay more for life-saving medications. According to a recent Kaiser Family Foundation survey, nearly one out of every three patients are skipping their recommended prescription drugs due to the cost.

“This is the first time we have been able to pass a law regulating PBMs in Illinois,” said House Majority Leader Greg Harris (D-Chicago). “We need strict regulation to bring drug prices down and make prescriptions more affordable. Also, I’m very glad that this new law specifically prohibits several anti-consumer and anti-competitive practices that have driven drug prices up.”

“PBMs line their pockets at the expense of people who have no choice but to buy lifesaving drugs at exorbitant prices,” said Sen. Andy Manar (D-Bunker Hill). “For years these middle men have been able to exert their influence on the pharmaceutical industry with essentially no oversight. It’s time to crack down on unfair practices that target some of the most vulnerable people in our communities.”

“The signing of HB 465 establishes foundational accountability and transparency for Pharmacy Benefit Managers and enables the Departments of Insurance and Healthcare Family Services to ensure that patients have access to their pharmacists and their local pharmacy in their community,” said Garth K. Reynolds, Executive Director of the Illinois Pharmacists Association. “In recent years, Illinois has seen an increase in Pharmacy Deserts and our communities and patients are being taken advantage of by these Pharmacy Benefit Managers, whose shareholder’s interest take presence over the healthcare of our patients. The Illinois Pharmacists Association thanks Governor Pritzker for supporting community pharmacies and preserving access to pharmacists for our patients.  The Illinois Pharmacists Association also is thankful to Senator Andy Manar and Majority Leader Greg Harris for their continued dedication as we move forward to improve patient care and sustainable access throughout Illinois.”

“We applaud the leadership of Governor Pritzker, Leader Harris, and Senator Manar for banning Copay Accumulator Programs in Illinois and nipping in the bud a health insurance policy practice that was price gouging consumers on their life saving prescription drugs – like those for the prevention and treatment of HIV – to benefit the bottom line of the health insurance companies,” said Nadeen Israel, Vice President of Policy & Advocacy at the AIDS Foundation of Chicago.