BY: B. Keith Plunkett @Keithplunkett
The Mississippi Board of Pharmacy is a state regulatory body established in 1920 by the Mississippi Legislature given the job of regulating and licensing pharmacists across the state.
Few people would say there exists an industry more ripe for potential abuses and in need of a watchful eye than that of the pharmaceutical industry. However, as is many times the case with regulatory bodies, the coziness of it’s board and staff with the industry they are meant to regulate can often also be the subject of abuse. In fact, a close look at a regulatory change made with the Board of Pharmacy in 2011, shows that the board members are in some cases directly competing with the industry they regulate.
In 2011, SB 2445 reauthorized the Board of Pharmacy as the regulatory authority for pharmacists. But, the bill went a step further. It also gave the board a new regulatory responsibility, one that most health insurance experts agree will eventually cost Mississippi seniors and employers who provide drug benefits to employees.
SB 2445 took regulatory authority of Pharmacy Benefit Managers, or PBM’s, away from the Mississippi Insurance Department and handed that authority over to the Board of Pharmacy. This was a first in the nation, and to date no other state has made such a move.
What are PBM’s?
PBM’s are one way that Mississippi employers have helped lower the cost of prescription drugs for employees. PBM’s give employers and health insurance plans the ability to offer high-quality, cost effective prescription drug benefits to enrollees, while improving the safety and quality of the pharmacy benefit for workers by negotiating for lower prices.
It would be easy to assume that the Board of Pharmacy as a handling authority of PBM’s is logical, if not necessary. But a closer look shows that the Mississippi Board of Pharmacy regulation of PBM’s presents a major conflict of interest that leaves Mississippi workers and Medicare seniors footing a much larger drug bill. In essence, the change in authority gave drugstore owners the ability to regulate PBM’s that negotiate drugstore payments, and the result is increased health care costs to Mississippians.
In simple terms, the fox is guarding the henhouse and making out like a bandit.
What this means is that the Mississippi Board of Pharmacy will financially benefit from the policies they set. The board members, as pharmacists in the industry themselves, have contractual relationships with PBM’s to provide services in pharmacy networks, and many times are also competitors of the PBM’s that they regulate. The current system allows the board to manipulate the health care system to increase pharmacy profits at the expense of consumers of these plans. Nothing could be a worse idea for health care consumers in our state.
PBM’s already face multiple compliance and licensure requirements to protect consumers. Reducing this restrictive regulation allows for a common sense approach and keeps members of the Board of Pharmacy honest.
Regulatory changes like these are often the result of unintended consequences. But, legislators had fair warning from the Federal Trade Commission (FTC), and decided to side with drugstore owners instead.
In a letter to Mississippi State Representative Mark Formby in 2011, the FTC warned that a bill shifting regulatory authority of PBMs from the Mississippi Insurance Commissioner to the Board of Pharmacy “may increase pharmaceutical prices and reduce competition.” The FTC also stated that the Mississippi legislature should “seriously consider whether there are benefits to consumers from the additional, more restrictive regulations in the bill that would outweigh the competitive harm and consumer costs.”
But, legislators moved ahead anyway and Governor Barbour signed the bill, setting up Mississippi’s already cash-strapped seniors and workers for the fall.
The Mississippi Legislature should move in the 2013 session to disallow the continued problematic role of the Board of Pharmacy’s regulatory authority over PBM’s. Putting pharmacy profits ahead of employers and their employees is an abuse that shouldn’t be tolerated. We have quite enough issues with health care expenses in Mississippi than to allow drugstore owners to pile on.
About Keith: Keith Plunkett has worked on communications issues with a range of public officials from aldermen to Congressmen, and a variety of businesses, governmental agencies and non-profits. He serves or has served as a board member of several non-profit, civic and political organizations. Contact him by going to HorizonMediaMarketing.com or follow him on Twitter @Keithplunkett