With the New Year underway, Pharmacies and Pharmacists throughout the country should be on the lookout for new laws taking effect in the various states in which they do business. For example, Michigan’s Pharmacy Benefit Manager (“PBM”) Licensure and Regulation Act (“Act”) took effect on January 1, 2024. One component of the Act is that PBMs must be licensed to conduct business in Michigan. To become licensed, PBMs must submit an application and make a $5,000 payment. If there is a significant modification to information submitted in the application, a PBM must submit a modification to its application within 30 days. One example of a significant modification is any administrative action taken against the PBM by another state. As previously discussed by Frier Levitt, in addition to the Act mandating that PBMs get licensed, the Act will increase transparency and provide protections to independent pharmacies by:
Clearly defining the term “Maximum Allowable Cost” (MAC);
Limiting the ability of PBMs to continue to assert that MAC lists are confidential;
Requiring a PBM to communicate the final reimbursement amount at the point of sale;
Prohibiting PBMs from reimbursing a non-affiliated pharmacy an amount less than an affiliated pharmacy for the same service; and
Establishing a reasonable appeals process for pharmacies to challenge PBM conduct.
In addition, starting on April 1, 2025 and each April 1 thereafter, PBMs will be required to file a transparency report with the Michigan Department of Insurance and Financial Services. This is another significant step in requiring PBMs operating in Michigan to be more transparent and treat independent pharmacies fairly. Independent pharmacies in Michigan should become familiar with the Act so that they are prepared to take action, if needed.
Authors: Lucas W. Morgan, Esq. and Eric P. Knowles, Esq.
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