Bill to cut out role of benefit managers clears legislature

March 18, 2020 GMT

FRANKFORT, Ky. (AP) — Legislation to cut out the role of pharmacy benefit managers in handling Medicaid prescription drug claims won final passage in the Kentucky legislature Wednesday.

The Senate voted 30-1 to send the measure to Gov. Andy Beshear after it accepted changes made by the House. The bill would require the state’s Medicaid program to pay pharmacies directly for prescription drugs, bypassing pharmacy benefit managers.

Lawmakers took action on stacks of bills amid uncertainty about how much longer this year’s session will last because of the coronavirus outbreak. Wednesday was day 48 in the 60-day session scheduled to end in mid-April.

Senate President Robert Stivers said Tuesday that the goal is for lawmakers to finish their business “as quickly and expeditiously as possible, and then go home.” The biggest job for the Republican-led legislature is to finish work on a new two-year state budget.

The bill dealing with pharmacy benefit managers is among proposals being considered to shake up some inner workings of Kentucky’s Medicaid program.

Republican Sen. Max Wise, the bill’s lead sponsor, has said the current system funnels hundreds of millions in taxpayer money to companies to handle prescription claims.


Drugstores, especially in rural areas, have been hurt by the pricing and reimbursement practices of pharmacy benefit managers, or PBMs, he has said.

The bill’s opponents include CVS Health, a national player in pharmacy benefit management. It says the measure is based on a “flawed analysis” and would be a “costly step backwards” for Kentucky.

In other action Wednesday, the House passed a bill to allow Kentucky consumers to have spirits, wine or beer shipped directly to their homes. The measure passed 52-33 and now goes to the Senate.

The bill would apply to producers only. It would also allow Kentucky bourbon distillers to ship their products directly to consumers outside Kentucky, if their states allow such shipments. The same would apply to the state’s beer and wine producers.

The bill’s supporters include the Kentucky Distillers’ Association, which represents many of the state’s bourbon producers. Kentucky produces about 95% of the world’s bourbon.

“This important measure creates a model framework for the responsible shipping of alcohol that will allow our signature bourbon industry to market their products globally, creating more jobs, investment and local revenue for communities all across Kentucky,” KDA President Eric Gregory said in a statement.

Under the measure, consumers receiving direct shipments would pay the same taxes and fees that retailers face in their state. It also would put monthly limits on amounts of direct shipments — 10 cases of wine, 10 cases of beer and 10 liters of distilled spirits.

The bill is the product of lengthy discussions among alcohol producers, wholesalers and retailers.