Governor Abbott Signs Legislation Protecting Texas Patients from PBM Abuses

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House Bill 1763 Addresses PBM Reform, Ensuring Patient Choice and Access to Community Pharmacies—a Top 2021 Legislative Priority for the Texas Pharmacy Association

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This law represents a significant first step that will help protect Texas pharmacies and ensure patient choice.

Governor Greg Abbott has signed into law House Bill 1763, important legislation that improves patient access to needed prescription drugs while ensuring pharmacies are protected from pharmacy benefit manager (PBM) overreach.

The Texas Pharmacy Association (TPA) championed PBM reform as one of its top priorities for the 87th Legislative Session. PBMs have long faced nationwide backlash for their lack of transparency and their role in driving up the cost of prescription drugs. Because PBMs are largely unregulated, they have been allowed to implement a specific set of rules that benefit their bottom line, limit patient choice, and harm small businesses. PBMs exercise calculated practices that put undue financial constraints on community pharmacies, many of which are multi-generational small businesses.

“PBMs act as the middlemen between insurance companies, pharmacies and patients, and are calling the shots when it comes to how and where patients can access their medications,” said TPA President Michelle Beall, Pharm.D. “This law represents a significant first step that will help protect Texas pharmacies and ensure patient choice.”

The Texas Pharmacy Association worked closely with legislators this session to pass a strong bill that protects patients.

“The growth of PBMs has not necessarily been good for patients, and particularly not for pharmacies,” said House Insurance Committee Chair Dr. Tom Oliverson, who authored the legislation. “House Bill 1763 brings some much-needed reforms to ensure that our pharmacy benefit managers are operating with a high degree of fairness with respect to Texas patients and pharmacies.”

House Bill 1763 prohibits PBM clawbacks that reduce the amount paid to a pharmacy for a prescription weeks or months after a prescription is filled and allows local pharmacies to mail and deliver prescriptions if requested by the patient. This legislation also prevents PBMs from self-dealing patients by requiring accreditations or certifications above those required by state and federal law in order to dispense specialty drugs.

“Texas pharmacists and their pharmacies have been on the front lines throughout the COVID-19 pandemic and remain the most accessible health care providers for all Texans,” said TPA Chief Executive Officer Debbie Garza, R.Ph. “These trusted local pharmacies are instrumental to the communities they serve, and yet are being restricted by self-dealing PBMs that steer patients to their own specialty and mail order pharmacies. We applaud Governor Abbott for standing with Texas patients and addressing the need to change this backwards system.”

House Bill 1763 also prohibits PBMs from paying affiliated retail or mail-order pharmacies more than they pay other pharmacies in a network. This provision helps to aid community pharmacies who are affected by negative PBM practices, specifically during a pandemic. The Texas Pharmacy Association is proud to work with Texas leadership on the important subject of protecting Texas patients.

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Debbie Garza, R.Ph.
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