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Texas Senate Considers Expanding PBM Reforms

The Texas Senate is considering expanding prescription drug reforms. The legislation, SB 1137, has received strong support from health care advocates as an expansion of the Pharmacy Benefit Managers (PBMs) reforms that were passed by the Legislature unanimously in 2021.

The bill SB 1137 sponsored by Texas senator Charles Schwertner, MD (R) is now at a standstill in the Senate Health and Human Services Committee. However, advocates are pushing for lawmakers to support its passing.

Healthcare reform advocates argue that the legislation would ultimately save patients money, and it would expand access to care by extending prior reforms regarding PBMs to all health plans in Texas, which includes employer-sponsored plans.

Numerous large employers contract with PBMs to negotiate better savings for their employees regarding prescription drugs. Due to market consolidations and a weak regulatory framework, reform advocates argue that PBMs have moved away from their original mission and are instead diverting savings away from Texas patients.

In a statement, the EmployersRx Coalition, which is a group of business leaders and associations, in recent testimony to the U.S. Senate Committee on Finance, argued that “growing awareness around the lack of transparency, layers of complexity, and the many activities PBMs have devised that contribute to our country’s spiraling drugs costs has created an unprecedented opportunity to compel change.”

“However, despite being the primary customers for PMBs and even some of the country’s largest companies and purchasers of health care – employers are no match against PBMs’ significant market power,” the EmployersRx Coalition added.

In contrast, the Texas Association of Business shared a letter earlier this year, voicing its opposition to the legislation.

In the letter addressed to House Sponsor Rep. Tom Oliverson (R), The Texas Association of Business expressed that “if this bill were to become law, it would increase prescription drug costs for millions of Texas employers,” adding that “this bill would be costly for Texas employers, who would be forced to comply with a range of different state laws and regulations.”

Though PBMs have relied on business groups to advocate against the proposed reforms, senior and rural health advocacy organizations feel that it's an attempt to maintain the status quo.

Saul Anuzis, the president of the 60 Plus Association, penned a recent column, writing that "the new strategy by PBMs is to call these reforms 'health care mandates' and to try to convince Texas employers that sunlight on PBMs' business practices - the same practices depriving employer health plan beneficiaries of billions in pharmaceutical savings - will somehow harm bottom lines and employees." Anuzis added that "to the contrary, exposing PBMs' practices will continue to foster plan affordability and better access to care."

Throughout the United States, support is brewing for PBMS reforms. Florida Governor Ron DeSantis (R) recently signed Florida's most significant PBM reform legislation into law. Other states are quickly considering enacting similar proposals.

Daniel Molina

Daniel Molina is a managing editor and legislative correspondent with a decade of experience covering the evolving political landscape of the American South and Southwest.