Gov. DeSantis Signs Executive Order Targeting Pharmacy Benefit Managers
By Jeff Scott, Esq., FMA General Counsel | Updated July 14, 2022

 

The Florida Medical Association has for years sought legislative and regulatory reforms to change the way pharmacy benefit managers (PBMs) operate in the prescription drug market. In 2020 the FMA supported sweeping legislation (SB 1444) that would have imposed increased transparency on PBM operations and instituted significant reforms on the PBM system. Unfortunately, the PBMs and their allies were able to prevent the legislation from being heard in committee. Acknowledging this lack of legislative action on PBM reform, on July 8, Gov. Ron DeSantis issued Executive Order 22-164, which takes effect immediately.

While the Order focuses mainly on PBM reform, the Governor also included a provision regarding the negotiation of prices for certain prescribed drugs — and at his press conference, he mentioned his frustration about the delay in the federal government’s approval of Florida’s proposal for implementing its Canadian Prescription Drug Importation Program. The Order directs the appropriate state agencies to:

  • Include provisions in all future state contracts for PBM services to prohibit PBMs from the use of spread pricing and financial clawbacks and to require data reporting measures (such as data regarding rebates and payments from drug manufacturers).
  • Include these contractual provisions in all existing contracts between the state and any PBM (or any subcontractor who contracts with a PBM) at the earliest opportunity.
  • Commence an audit of all PBMs that perform or have performed services for a Medicaid Managed Care Plan during the past five fiscal years to ensure that all costs incurred by the state are justified.
  • Commence an audit of all PBMs that perform or have performed services for the Division of State Group Insurance during the past five fiscal years for the same reason as the audit ordered above.
  • Expeditiously implement the provisions of state law related to the negotiation of prices for prescribed drugs and biological products ineligible for the Canadian Prescription Drug Importation Program (specifically mentioning insulin and epinephrine). The Order instructs the Agency for Health Care Administration to contract with a vendor for such services, with the vendor paid on a contingency basis from a portion of the savings the vendor is able to negotiate.


While the Governor’s Order prohibiting PBM spread pricing and financial clawbacks will only apply to Medicaid managed care plans and the State Group Health Insurance plan, it is an important step forward and hopefully a catalyst in making such reforms applicable to all PBMs that do business in Florida. The FMA will explore all available options for further reforms as well, such as restricting PBM (as well as health insurer) use of step therapy, prior authorization, non-medical switching and other utilization management techniques.

Any FMA member who has questions regarding this Order can contact the FMA General Counsel at jscott@flmedical.org.