Senator Justin Boyd

Insurance & Commerce (Senate) — March 20, 2025 (44:27)

complex. So with that, John Vinson, you're recognized. Introduce yourself for the

Insurance & Commerce (Senate) — March 20, 2025 (44:13)

Pharmacists Association, I've asked them to come to the table because this is a complex issue, and they're not here to speak for or against this bill, but to help provide expert testimony on something that's

Insurance & Commerce (Senate) — March 20, 2025 (44:09)

not going to be done with discussion, but for his schedule, the

Insurance & Commerce (Senate) — March 20, 2025 (33:39)

NEW SPEAKER: SENATOR MCKEE, YOU GOT A QUESTION? NEW SPEAKER: THANK YOU, MR.

Insurance & Commerce (Senate) — March 20, 2025 (29:49)

I was going to have the Pharmacists Association, with Senator Everett's permission, explain how the rebate situation works,

Insurance & Commerce (Senate) — March 20, 2025 (29:46)

to, I'm not trying to cut you off,

Insurance & Commerce (Senate) — March 20, 2025 (6:17)

And the unfortunate thing is taxpayer dollars and premium dollars are going to support this type of system. And so we need fundamental change. I think this legislation really was a step in the right direction. but unfortunately the people we the state pay came back and said this legislation costs 18 million dollars and i disagree but at this point in the session i don't have time to go prove that you know i don't have time to disprove that

Insurance & Commerce (Senate) — March 20, 2025 (5:43)

So I don't know if we just have a misinterpretation, but I'm not going to ask this committee to vote on something with an $18 million fiscal impact, even when I think it's wrong. All right. Did that answer your question satisfactorily? Well,

Insurance & Commerce (Senate) — March 20, 2025 (6:07)

a complex system, and this is what happens when we don't have full transparency. We have transparency at one place, but we don't have transparency at all the places.

Insurance & Commerce (Senate) — March 20, 2025 (5:03)

But what I can tell you is, historically, insurance companies were really not worried about the cost of drugs. Now this is one of the most significant, if not the most significant, cost to a health insurance program because that percentage of claims has skyrocketed. So because of these kickback things, schemes, I would call them, that's where they're doing that. But again, like I said, in my bill, I think it clearly had language that said that if you have

Insurance & Commerce (Senate) — March 20, 2025 (5:36)

a P&T, a Pharmacy and Therapeutics Committee, and there was a cost-effective reason that you could do that.

Insurance & Commerce (Senate) — March 20, 2025 (4:33)

So now we have this non, what is not really a transparent rebate game that happens. So what can happen and what has been documented by the Federal Trade Commission to happen is we, you know, say, hey, we want this drug to be on formulary and it might be the brand name drug. And that's supposedly advantageous because this non-transparent rebate gets kicked back to the PBM and that supposedly is used to lower cost.

Insurance & Commerce (Senate) — March 20, 2025 (3:59)

And at the point of sale, you know the pharmacy knows what it's getting paid and it knows what the co-pay is for the patient. And so that's a very important function. But as time passed and things evolved, they figured out, hey, we could control a formulary. So we could say what medicines we should pay for and which ones we shouldn't and which ones should have higher co-pays and which ones should not. And so then they get a direct traffic, one to the pharmacy, two on the medication. So drug companies figured this out, and so they started paying to play.

Insurance & Commerce (Senate) — March 20, 2025 (3:37)

glad you asked that, Mr. Chair. So what happens is originally PBMs or pharmacy benefit managers, their role was really to help adjudicate claims. And they had a very important role. It's still a very important role from that standpoint. We need that quick, basically real-time adjudication of claims. So that is something that they are good at. They're very efficient at.

Insurance & Commerce (Senate) — March 20, 2025 (2:54)

I'm sorry that, you know, we did that. So basically, we've got a supposed fiscal impact of $18 million. I'm not going to ask anybody to vote on something that, you know, is on green paper that says it's $18 million. So with your permission, I'm just going to pull this down and ask that we continue to ask ourselves whether or not we're doing the right things for the citizens of Arkansas to use Siegel and Navitus when they come back and don't seem like they can interpret the legislation.

Insurance & Commerce (Senate) — March 20, 2025 (2:21)

and fear these medications could be prescribed by any provider for any indications. But actually, there's an exception in the bill that

Insurance & Commerce (Senate) — March 20, 2025 (2:30)

says if you have a pharmacy and therapeutics committee and you have a cost-effective reason, you could continue to use the brand or the reference product. So I don't really agree with their interpretation of what's going on. So I think it's unfortunate that this is the way it played out.

Insurance & Commerce (Senate) — March 20, 2025 (1:49)

Thank you, Mr. Chair, for giving me a few minutes to talk about Senate

Insurance & Commerce (Senate) — March 20, 2025 (1:54)

Bill 140. This is an important bill that would help lower the overall cost of drugs. Unfortunately, our consultant Siegel came back with an $18 million

Insurance & Commerce (Senate) — March 20, 2025 (2:06)

fiscal impact. And so basically the way I understand it is they ask our PBM pharmacy benefit manager, Navitus, what the cost would be. And basically, Navitus said that the bill would eliminate utilization management for generics and biosimilars