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F I S C A L I M P A C T R E P O R T
SPONSOR Feldman
DATE TYPED 3/7/05
HB
SHORT TITLE Pharmacy Benefit Management Company Oversight SB SM 32
ANALYST Hanika-Ortiz
APPROPRIATION
Appropriation Contained Estimated Additional Impact Recurring
or Non-Rec
Fund
Affected
FY05
FY06
FY05
FY06
$0.1
Recurring
General
Fund
Duplicates HJM 98
SOURCES OF INFORMATION
LFC Files
SUMMARY
Synopsis of Bill
Senate Memorial 32 requests the New Mexico Health Policy Commission (HPC) to convene a
task force to study the need for regulation and oversight of Pharmacy Benefit Managers (PBMs).
Significant Issues
PBMs are largely unregulated, except for regulations governing pharmacy businesses, and ad-
minister and manage the purchase, dispensing and reimbursement of prescription drugs for pub-
lic and private insurance plans. PBMs handle prescription drug benefits for an estimated ninety-
five percent of all patients with prescription drug insurance. Many PBMs own and operate their
own mail order pharmacies.
The State relies on the services of PBMs to negotiate discounted prices for prescription drugs,
develop formularies of covered drugs, establish and maintain adequate networks of pharmacies
and manage utilization of drugs through prior authorization or utilization reviews. Prescription
drug pricing involves many different prices, rebates and discounts and involves many different
parties in the purchasing and dispensing of the product.