Four years after leading the effort to cut corporate middlemen out of the prescription drug business for Kentucky’s Medicaid program, Sen. Max Wise now is taking aim at those same companies’ role in private health insurance.

Noting his Senate Bill 50, enacted in 2020, resulted in millions of dollars in savings to Kentucky Medicaid, Wise, R-Campbellsville, has filed a measure meant to restrict the role of companies known as pharmacy benefit managers, or PBMs, in commercial health insurance.

Reprieve for Kentucky’s independent pharmacies is saving Medicaid millions

The Kentucky Lantern last year reported state officials estimated Wise’s bill eliminating outside PBMs from state Medicaid resulted in about $283 million in savings between 2021 and 2022—savings plowed into expanded Medicaid dental benefits for adults.

Wise, in a news release, said he believes Senate Bill 188, filed Feb. 8, will aid many more Kentuckians’ access to prescription medication and help struggling local pharmacies.

“I’m optimistic this measure will yield similar savings by applying the same standards to the commercial market, effectively cutting costs for Kentuckians with private health insurance plans,” Wise said.

The news release said it would also help the state’s around 500 independently owned drugstores, with at least 64 having closed in the past two years.

Pharmacists throughout Kentucky have complained that PBM’s extreme cost-cutting measures have reduced their revenue and left them struggling to survive, as PBMs kept a share of proceeds for themselves.

PBMs, many owned by large pharmacy chains, have argued they save money by processing prescription drug claims more efficiently and at better prices.

CVS Health says on its website that its PBM business, CVS Caremark, helps “increase access to care, deliver better health outcomes and help lower overall health care costs” for consumers.

CVS and other national PBMs unsuccessfully fought Wise’s 2020 bill which eliminated their role in Kentucky’s $15 billion a year Medicaid program and instead directed the state to hire a single, independent PBM to oversee Medicaid’s about $1.2 billion a year prescription drug business.

They likely will oppose Wise’s bill but lawmakers in recent years have expressed increased skepticism about the role of PBMs in Kentucky and other states including Ohio and West Virginia.

Monday’s news release said SB 188 “builds on the success” of Wise’s legislation affecting Medicaid prescription drugs.