Published by Inside Health Policy
Senate health committee chair Lamar Alexander (R-TN) and ranking Democrat Patty Murray (WA) included measures regulating pharmacy benefit managers in their draft bill on lowering health care costs that were inspired by a state official’s work in Montana. While the state bill was vetoed by presidential candidate and Montana Gov. Steve Bullock (D), the policy would have a much wider impact if it is adopted into Murray and Alexander’s legislation.
The two proposals that were based on Montana’s work are the ban on spread pricing and the requirement that PBMs pass through rebates to insurers.
Marilyn Bartlett, an insurance industry veteran, is the architect of Montana’s strategy to regulate PBMs. After leaving the insurance industry to administer the state employee health plan, she switched the state plan to a PBM that used more transparent practices. Bartlett estimates the switch saved $2 million by eliminating spread pricing and increased rebate revenue by $3.5 million the year after changing PBMs.
She now works for the state insurance commissioner’s office. Senate health committee staff reached out after hearing about Bartlett’s work, a spokesman for the insurance commissioner said.
Bartlett designed the state’s Senate Bill 71, which would have imposed transparency requirements on PBMs through insurers.
It was championed by Montana insurance commissioner Matt Rosendale, a conservative mainstay in Montana politics who challenged Sen. Jon Tester (D-MT) in 2018. Rosendale also pushed several other measures on a variety of issues this session, which fostered resentment among Montana Democrats. Rosendale previously served as the state senate’s majority leader and has a history of animosity with Democrats on health care issues.
Outside of political considerations, Gov. Bullock said in a veto letter that he axed the legislation based on insurance industry concerns about enforcement. Lawmakers must vote to override or sustain the veto by June 14.
However, the U.S. Congress has more authority to directly regulate PBMs, so it would not need to rely on insurers for enforcement.
Montana was in a unique position to advise the U.S. Senate committee on PBM legislation because of the case study its state plan experiment produced and litigation the state pursued against the PBM industry, said Kyle Schmauch, a spokesman for Rosendale’s office.
A bill inspired by Montana’s SB 71 is also currently making its way through the Maine state legislature.
“I think looking at problems and ideas are more important at the federal level than looking at what bills become law,” Schmauch said. — Rachel Cohrs (firstname.lastname@example.org)