Pharmacy Benefits Administration - Maryland Medical Assistance Program and Pharmacy Benefits Managers
Summary
SB438 makes two main changes to Maryland law governing pharmacy reimbursement and pharmacy benefits managers (PBMs). First, it changes the Maryland Medical Assistance Program’s drug reimbursement rules from maximum reimbursement levels to minimum reimbursement levels for generic drugs and brand-name drugs when a prescriber specifies a brand, and ties those minimums to the National Average Drug Acquisition Cost plus a professional dispensing fee set by the Department of Health using the most recent in-state cost-of-dispensing survey. The bill excludes certain pharmacies from these minimum reimbursement requirements, including pharmacies owned by or affiliated with a PBM and mail-order pharmacies.
Second, the bill expands and clarifies the scope of Maryland’s PBM regulation by redefining “purchaser” to include insurers, nonprofit health service plans, and health maintenance organizations, while carving out a narrow exception for certain nonprofit group-model HMOs that use internal pharmacy operations. It also applies the PBM reimbursement standard to managed care organizations that use PBMs to manage prescription drug coverage, requiring those PBMs to reimburse pharmacies at least the Medicaid benchmark rate described in the bill. The measure is designated as an emergency bill, meaning it would take effect immediately upon enactment.
Impact
The bill would amend the Health – General Article and the Insurance Article to raise the floor for pharmacy reimbursement in Medicaid and extend PBM reimbursement requirements to managed care organizations using PBMs. It would also broaden the set of entities treated as “purchasers” under Maryland’s PBM law, bringing more commercial and nonprofit health coverage arrangements within the regulatory framework. The practical effect would be to increase reimbursement obligations for certain PBMs and managed care arrangements, while preserving special treatment for PBM-affiliated pharmacies, mail-order pharmacies, and certain internal nonprofit HMO pharmacy operations.
Sentiment
No committee transcript or recorded vote information was provided, so the available context does not show formal support or opposition from legislators. Based on the bill text alone, the measure appears designed to address pharmacy reimbursement adequacy and PBM practices, suggesting a policy goal of stabilizing pharmacy payments and aligning them more closely with acquisition and dispensing costs. Because it is an emergency bill, the sponsor likely viewed the issue as time-sensitive.
Contention
The likely points of contention are the higher reimbursement floor and the expanded regulation of PBMs and purchasers. Pharmacies and provider advocates may support the bill because it could improve reimbursement rates and reduce underpayment concerns, especially for Medicaid and managed care prescriptions. PBMs, insurers, managed care organizations, and some health plans may object to the added cost and regulatory burden, particularly the requirement to reimburse at least the Medicaid benchmark and the expansion of the “purchaser” definition. The exclusions for PBM-owned pharmacies and mail-order pharmacies may also draw scrutiny from independent pharmacies if they are seen as creating uneven treatment.