Jim Beam column:CVS lawsuits won't solve PBM concerns
Louisiana legislators and the state's citizens got acquainted near the end of this year's fiscal session with organizations we have heard little about — pharmacy benefit managers (PBMs). Large employers and health insurance companies pay PBMs to act as middlemen to negotiate drug prices.
House Bill 358 by Rep. Dustin Miller, D-Opelousas, was one of three measures filed dealing with PBMs. A conference committee changed the bill and it ended up saying that no permit to operate a pharmacy can be granted or renewed to a pharmacy that is wholly or partially owned or controlled by a pharmacy benefit manager.
Miller's bill passed the House 95-0 and the Senate 37-0. However, the House rejected changes made by the Senate and a conference committee was eventually appointed to iron out the differences between the two chambers.
The PBM change that was inserted into the bill by the conference committee was accepted by the House but the legislation died in the Senate. Senate President Cameron Henry, R-Metairie, later explained that there was no testimony on that complicated change in the bill.
Donald Trump Jr., a friend of Louisiana Gov. Jeff Landry, said that bill should pass the Legislature. Landry got so upset when it didn't, he is still threatening to call a special session to pass it. If a Trump says do it, Landry always goes to war in order to get it done.
The Advocate reported that Amy Thibault, a spokesperson for CVS, which owns both a PBM and a nationwide chain of drug stores, said the bill would have forced it to close its 119 stores in Louisiana. She said it would affect about 1 million patients across the state and 22,000 patients who receive high-cost specialty drugs that smaller pharmacies find difficult to handle.
An anti-PBM bill did pass. Rep. Michael Echols, R-Monroe, sponsored HB 264 that passed both houses unanimously. The newspaper said it favored independent pharmacies by prohibiting PBMs from steering customers to pharmacies they own and by mandating that discounts negotiated by PBMs go to employers and consumers.
Echols' bill has been sent to Gov. Landry, but he hasn't signed it or vetoed it yet. However, we know he's still upset because The Advocate reported that the state has filed three lawsuits against CVS accusing it of 'unethical and deceptive acts' in its use of customer data for political lobbying.
All three cases allege that CVS violated Louisiana's Unfair Trade Practices and Consumer Protection Law. One lawsuit says the text messages CVS sent to its customers were 'inaccurate, misleading and deceptive.' And that they were intended to incite fear among vulnerable people.
The second suit alleges the company has used its size and control of insurers, PBMs and drugstores to squeeze out competition and drive up drug costs.
The third lawsuit accuses CVS of abusing its market power to 'inflict economic harm' and impose unfair fees on independent pharmacies 'under threat of being expelled from the CVS network.'
The Center Square said CVS Health is pushing back against claims that the company engaged in deceptive, anticompetitive practices. In a statement, CVS called the lawsuits 'without merit' and pledged to defend itself vigorously.
CVS said, 'Our communication with CVS customers, patients and members of the community was consistent with the law.'
Rather than filing lawsuits, state Sen. Kirk Tallbot, R-River Ridge, had a better solution. When the Senate refused to approve Miller's bill he sponsored Senate Resolution 209.
The resolution requests the Louisiana Department of Health to study the impacts of prohibiting pharmacy benefit manager ownership of pharmacies in Louisiana and to submit a report to the Legislature.
I found a helpful explanation about PBMs at journalistsresource.org in a story that said they were created to negotiate better deals for consumers on medicines. However, it said instead PBMs 'have sometimes driven up the cost of prescriptions — while also putting the survival of community pharmacies at risk.'
So, it's possible that Landry and legislators should do something to prevent that from happening, However, rushing to judgment with lawsuits seldom solves major problems. More information on PBMs would better serve the legislators who pass this state's laws and the people who are served by the state's drugstores.
Henry said Miller's bill wouldn't have taken effect until 2027. Instead of lawsuits, PBMs can be debated during the 2026 legislative session to give legislators the background they need on PBMs.
Jim Beam, the retired editor of the American Press, has covered people and politics for more than six decades. Contact him at 337-515-8871 or jim.beam.press@gmail.com. Reply Forward
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