House Bill 386 — Pharmacy benefit managers

House Bill 386 — Pharmacy benefit managers

by
Parrish Miller
February 4, 2020
Parrish Miller
February 4, 2020

Bill description: HB 386 imposes new regulations on pharmacy benefit managers.

Rating: -4

Does it give government any new, additional, or expanded power to prohibit, restrict, or regulate activities in the free market? Conversely, does it eliminate or reduce government intervention in the market?

HB 386 creates a new section of Idaho Code defining and regulating pharmacy benefit managers. Among the regulations imposed are mandates on the use of “maximum allowable cost pricing.”

(-1)

Does it increase barriers to entry into the market? Examples include occupational licensure, the minimum wage, and restrictions on home businesses. Conversely, does it remove barriers to entry into the market?


HB 386 stipulates that "a person may not perform, offer to perform, or advertise any pharmacy benefit management service in this state unless the person is registered as a pharmacy benefit manager with the department of insurance."

(-1)

Does it directly or indirectly create or increase any taxes, fees, or other assessments? Conversely, does it eliminate or reduce any taxes, fees, or other assessments?

Anyone who registers with the Department of Insurance must pay a fee.

(-1)

Does it violate the spirit or the letter of either the U.S. Constitution or the Idaho Constitution? Examples include restrictions on speech, public assembly, the press, privacy, private property, or firearms. Conversely, does it restore or uphold the protections guaranteed in the U.S. Constitution or the Idaho Constitution?


HB 386 violates the freedom of contract with the following language: "A pharmacy benefit manager shall not prohibit a pharmacist or retail pharmacy from providing a covered person information on the amount of the cost share for a prescription drug and the clinical efficacy of a more affordable alternative drug if one is available, and a pharmacy benefit manager may not penalize a pharmacist or retail pharmacy for disclosing such information to a covered person or for selling to a covered person a more affordable alternative if one is available."

These prohibitions are couched as providing transparency, but instead, they serve to insert government force into private contracts. Contracts routinely include noncompete clauses and other stipulations designed to prevent one party from working at cross-purposes to the other. The state should not violate the freedom of individuals and businesses to contract with each other based on whatever terms are mutually agreeable.

(-1)

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