Kansas lawmakers pass sweeping regulations on prescription drug middlemen
Bipartisan bill targeting pharmacy benefit managers heads to governor's desk
TOPEKA, Kan. — The Kansas Legislature has overwhelmingly approved new regulations on the corporate middlemen who manage prescription drug benefits, sending a bill to the governor that aims to lower out-of-pocket medication costs and help keep local pharmacies open.
The legislation establishes a regulatory framework requiring pharmaceutical rebates to be passed to health plans and banning "spread pricing" — a practice in which pharmacy benefit managers charge an insurance plan more for a drug than they reimburse the pharmacy. The bill is Senate Substitute for SB 20. Originally introduced as a routine measure regarding the composition of a state insurance board, lawmakers stripped the original text and substituted comprehensive pharmacy benefit manager, or PBM, reform provisions.
Advocates say the measure provides relief to Kansas patients and independent pharmacies against anticompetitive corporate practices. The bill mandates that local, independent drugstores receive the same reimbursement rates as mail-order or PBM-owned pharmacies, along with a guaranteed $10.50 professional dispensing fee, which supporters say would prevent rural and neighborhood pharmacists from being driven out of business by low reimbursement payments.
The bill drew rare bipartisan support in the Legislature. The House passed the measure 104-17, and the Senate approved it 32-8. Opposition came largely from conservative Republicans who argued the bill interferes with private business contracts and that PBM regulation should be left to the federal government.
The bill now goes to Gov. Laura Kelly, a Democrat, for her signature. If signed, the Kansas Insurance Department would gain new enforcement authority to audit PBMs and ensure compliance with the transparency requirements.
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