Excessive pharmaceutical costs are a concerning trend occurring across the nation. The Delaware Department of Insurance has finalized new regulations for pharmacy benefit managers to combat the issue proactively. The regulations went into effect Aug. 11 as part of implementing HB 194, and come after extensive stakeholder discussions.
PBMs administer prescription drug plans for health insurers, large employers, Medicare Part D plans and other groups, determining the list of medications that a plan will cover and the consumer costs of those drugs. These companies hold massive negotiating power and receive billions of dollars in rebates from manufacturers, but to date have widely not used their power to reduce the costs of medications and insurance.
The new regulations from the Department of Insurance will begin an increasing level of oversight and transparency, allowing the department to investigate companies, require corrective actions, and suspend, deny, or revoke a PBM’s registration if one is found to be acting in violation of the code.
“Increasing the affordability of prescriptions and healthcare increases their accessibility, creating a healthier Delaware. These steps toward regulating this multibillion-dollar industry will save residents money, and could save residents’ lives,” said Insurance Commissioner Trinidad Navarro.
The Pharmacy Reimbursement Task Force and the former Interagency Pharmaceuticals Purchasing Study Group each demonstrated the General Assembly’s focus on lowering the cost of care, working on a range of issues surrounding protecting Delawareans from excessive medication costs, negotiating and lowering drug prices, and creating price transparency and corporate accountability.
The department and the General Assembly plan to work together to advance legislation regarding PBMs in the future. A related bill was proposed during this year’s session, but it did not advance due to the compressed legislative timeline during COVID-19.