Pills (Photo: Allison Bell/TA)

The National Association of Insurance Commissioners (NAIC) may try to set national standards for regulating pharmacy benefit managers (PBMs.)

An arm of the NAIC has agreed to move toward developing a PBM model regulation.

(Related: Cheaper Insulin Could Cut Hospital Bills by $5 Billion: Yale Researcher)

Members of the NAIC’s Regulatory Framework Task Force voted Saturday to approve  a PBM model law development effort, according to the NAIC.

Officials note on the PBM model development proposal form that the effort could be difficult, because so many states have already developed their own PBM regulation programs.

“The issue will be whether these states will want to re-open those laws or regulations after adoption the new model,” officials say.

The PBM Issue

PBMs help health insurers and employer-sponsored health plans bargain with drug manufacturers.

Some PBM revenue is tied to the size of the discounts PBMs negotiate. PBM critics say that, in some cases, PBMs are maximizing their discount-linked revenue by pushing up the full list prices of drugs.

In other cases, critics say, PBMs are maximizing their revenue by taking too big of a cut of the discounts, and increasing the amounts insured consumers actually pay for important drugs, such as insulin, out of their own pockets.

Where the NAIC Fits In

The NAIC is a Kansas City, Missouri-based group for state insurance regulators.

States often use NAIC models when developing their insurance laws, regulations and procedures.

The Regulatory Framework Task Force Effort

The Regulatory Framework Task Force is part of the NAIC’s Health Insurance and Managed Care Committee.

The task force has a Pharmacy Benefit Manager Regulatory Issues Subgroup of its own.

The PBM issues subgroup has been looking into the idea of developing a new NAIC model to establish a PBM licensing or registration process.

The subgroup held a conference call meeting in March.

Subgroup officials voted unanimously at the March meeting to approve a model law development proposal drafted by the NAIC staff, according to a summary included in a document packet for the Regulatory Framework Task Force session in Orlando.

Barbara Richardson, the Nevada insurance commissioner, said she thinks the PBM model development project should promote uniformity across the states and include an electronic component, according to the conference call summary.

Resources

Links to information about the Regulatory Framework Task Force session in Orlando are available here, under the Meeting Materials tab.

Links to information about the Pharmacy Benefit Manager Regulatory Issues Subgroup proceedings are available here.

— Read 5 Things Senators Are Hearing About Killer Drug Priceson ThinkAdvisor.

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