Pharmacy benefit managers, or PBMs, manage plans for nearly 95% of Americans with prescription drug coverage by serving as a "middle-man" between health plans and pharmacies.   PBMs were created to negotiate discounts and rebates with drug manufacturers, negotiate with pharmacies to establish networks for dispensing drugs, create formularies of preferred medication lists, and process prescription claims at the point of sale for millions of Wisconsinites. In addition, many PBMs own and operate pharmacies.

Operating with limited government oversight, some PBMs have utilized tactics to limit patient choice and access. Tactics such as “pharmacy steering,” deceptive advertising, and mandatory mail-order have reduced patient access to pharmacy and complementary health care services at the pharmacies of their choice.

While PBM reform has been passed in Wisconsin before, there are still several tactics that some PBMs use that negatively impact patients and pharmacies.
 

The bill is named Cole's Act in honor of Cole Schmidtknecht, who passed away from a severe asthma attack after his inhaler was removed from his plan's formulary, and he could not afford the out-of-pocket cost.

Key Components of the Cole's Act:

• Requirement that dispensing fees from PBMs are equal to or greater than those provided by the Medicaid program
• Prohibition on adjudication, performance-based, network participation, or accreditation fees by pharmacies
• Prohibition on accreditation requirements 
• Any willing pharmacy provisions, including allowance to be in preferred or non-preferred networks
• Ban on differential copays; ban on incentives/penalties for use of specific in-network pharmacy; prohibition of mandatory mail-order or use of specific pharmacy within the network (or patient penalties for not using a specific pharmacy)
• Reform to the existing MAC transparency laws to enhance enforceability, including the requirement that PBMs direct pharmacies to a legal wholesaler where the pharmacy can obtain a drug at less than or equal to the MAC
• Prohibition on reimbursing affiliated pharmacy more than unaffiliated pharmacy
• Allowance for a pharmacy to refuse to fill prescriptions that would be reimbursed at a rate lower than the pharmacy's acquisition cost
• Fiduciary responsibility owed by PBM to health plan sponsor; related transparency reporting requirement
• Requirement that pharmacies are paid promptly by PBMs (within 30 days)
• 340b discrimination provisions, including differential requirements, restrictions, or reimbursements
• Application of copay assistance cards to patients' copay and out-of-pocket maximum amounts
• Prohibition on retaliation by PBMs against pharmacies/pharmacists for reporting violations of laws or exercising their rights