New regulations increase oversight of Pharmacy Benefit Managers

Excessive pharmaceutical costs are a concerning trend occurring across the nation, and today the Delaware Department of Insurance has finalized new regulations for Pharmacy Benefit Managers (PBMs) to proactively combat the issue. The regulations go into effect on August 11 as part of implementing HB 194, and come after extensive stakeholder discussions.

PBMs administer prescription drug plans for health insurers, large employers, Medicare Part D plans, and other groups, determining the list of medications that a plan will cover and the consumer costs of those drugs. These companies hold massive negotiating power and receive billions of dollars in rebates from manufacturers, but to date have widely not used their power to reduce the costs of medications and insurance. The new regulations from the Department of Insurance will begin an increasing level of oversight and transparency, allowing the department to investigate companies, require corrective actions, and to suspend, deny, or revoke a PBM’s registration if they are acting in violation of the Code.

“Increasing the affordability of prescriptions and healthcare increases their accessibility, creating a healthier Delaware. These steps towards regulating this multi-billion-dollar industry will save residents money, and could save residents lives,” said Insurance Commissioner Trinidad Navarro. “I want to commend Pharmacy Reimbursement Task Force co-chairs Sen. Sokola and Rep. Bennett, as well as Chair of the former Interagency Pharmaceuticals Purchasing Study Group Rep. Seigfried, for their passion and hard work towards these regulations and their inclusion of a diverse array of stakeholders throughout the process. Our work on this issue is just beginning, and we are grateful for your partnership.”

The Pharmacy Reimbursement Task Force and the former Interagency Pharmaceuticals Purchasing Study Group each demonstrated the General Assembly’s focus on lowering the cost of care, working on a range of issues surrounding protecting Delawareans from excessive medication costs, negotiating and lowering drug prices, and creating price transparency and corporate accountability.

“One of the most important things we can do as elected officials is work to keep prescription drugs affordable and accessible, particularly for our most vulnerable residents,” said Sen. David Sokola, D-Newark. “I’m proud of our work on the Pharmacy Reimbursement Task Force and proud to have helped develop regulations that will increase transparency around a little-known sector of our health care industry. These regulations from Commissioner Navarro and his team at the Department of Insurance represent a solid beginning to the work I look forward to continuing in 2021.”

The department and the General Assembly plan to work together to advance legislation regarding PBMs in the future. A related bill was proposed during this year’s session, but it did not advance due to the compressed legislative timeline during COVID-19.

“High prescription drug costs can debilitate a person’s finances, hindering how they save and plan for daily and long-term expenses. We owe it to consumers to fight for their best interests, increasing access and affordability to needed medications,” said Rep. Andria Bennett, who sponsored HB 194 to regulate PBMs. “Pharmacy benefit managers should put the consumer first, not profit. That’s why we fought to increase transparency and oversight: so Delawareans are not taken advantage of in such a vulnerable way. Commissioner Navarro’s regulation will provide even more transparency and comfort to our residents, and I thank him for his commitment to them.”

“Pharmacy Benefit Managers are companies that have, through the years, gained significant control over the supply, demand, and cost of pharmaceuticals – around 80% of the market – with little to no regulation at all. They are, in essence, governing both the cost and flow of medicines between people in need of medication and the manufacturer, health insurance company, community pharmacies, and the company providing medication benefits. This has led to higher costs for residents who don’t really have a choice in whether to pay for lifesaving medication,” said Rep. Ray Seigfried, a former Christiana Care senior vice president.

“My colleagues and I pushed HB 194 to require registration of all PBMs doing business in Delaware as a first step to reining in these managers. Commissioner Navarro’s regulations create standards such as having access to books and records of their operation, contract templates, and staffing. It provides the right to denial, suspension, or revocation. This order will provide the first step to begin opening the door to greater transparency. I thank Commissioner Navarro and his team for taking these important steps forward.”

Registration of Pharmacy Benefits Managers Regulation

WILMINGTON, Del. – Governor John Carney on Thursday released the following statement on the Delaware Department of Education’s announcement that the department will not be finalizing the current version of Regulation 225:

“Last July, I asked Education Secretary Susan Bunting to draft a new regulation that would require Delaware’s school districts and charter schools to create consistent, meaningful anti-discrimination policies. We acted on the simple premise that no child should be made to feel uncomfortable or unwelcome at school because of who they are. Every student deserves to be respected and affirmed. Our goal was to help protect Delaware children from discrimination at school so they could focus on their education. That remains our goal today.

I also believe that families are critical to the education of Delaware’s children. Parents are their children’s first teachers, and they are our partners in this endeavor. The more engaged and involved families are in their children’s education, the better off our students will be.

Throughout the process of creating this regulation, I carefully listened to the feedback of Delawareans. Secretary Bunting did the same. We heard concerns from parents who wanted to ensure they had a say in the decisions schools make regarding their children. We attempted to address those concerns. On the other hand, we heard and understand concerns that have been raised by the LGBTQ community. They are working to protect some of our state’s most vulnerable children.

In light of the recent Boyertown decision by the Third Circuit, and the comments received from across our state, we are considering our next steps on Regulation 225. We will remain committed to public engagement as we determine the path forward. I want to thank Secretary Bunting and her team for their work on this regulation, and for their commitment to public engagement throughout this process. I also want to thank members of the development team that crafted the original regulation – including students, parents, superintendents, principals, school board members, and advocates.

The most important part of my job is to make sure each and every child in Delaware has an opportunity to be successful in the world. This is difficult work. And our work is not done. I look forward to continued discussions with members of the General Assembly, Delawareans, and Delaware families across our state about how best to make progress.”

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UPDATE: The Delaware Department of Education announced on Thursday that it will not be moving forward to finalize the current proposed version of Regulation 225. The department received more than 6,000 comments in response to the revised proposed 225 Prohibition of Discrimination Regulation, which was published in the June Register of Regulations. Those comments now are available online for public review here.

“Recent court decisions have raised important legal questions regarding this issue, and the significant public comments make clear we still haven’t struck the right balance,” Secretary of Education Susan Bunting said. “For those reasons, we’re not going to finalize the current proposed version of the regulation.”

Previous release dated Friday, June 1, 2018:

State seeks public comment on revised proposed antidiscrimination regulation

The Delaware Department of Education is seeking public comment on a revised proposed 225 Prohibition of Discrimination Regulation, which will be published in the June Register of Regulations today.

The department received more than 11,000 comments on a previous version of the proposed regulation. After careful review of that feedback, Secretary of Education Susan Bunting made responsive changes. The version to be published today:

• Removes the provision that allowed students to make changes on how they were identified without parental involvement and adds a requirement of parental notification and permission; and
• Substitutes the state’s suggested model policy for a guidance document to assist districts and charters in creating local policies.

Because the revised proposed regulation reflects substantive changes from the previous version published, the regulation has been published in the Register again with another month-long public comment period before any decision on a final regulation is made.  Secretary Bunting thanks those who shared their feedback during the first formal comment period and encourages the public to again share comments by July 6. All comments received will be posted online after the public comment period ends.

To be considered as part of the public record, comments must either be submitted via email to DOEregulations.comment@doe.k12.de.us or via mail to the attention of Tina Shockley, Department of Education, 401 Federal St., Suite 2, Dover, Delaware 19901. Comment submitted to other email addresses will not be accepted. Comments must be received by July 6.

Media Contact: Alison May, alison.may@doe.k12.de.us, 302-735-4006.

DOVER – Nominations are now being accepted for membership on the Coastal Zone Conversion Permit Act Regulatory Advisory Committee, the Department of Natural Resources and Environmental Control announced today. The committee will comprise 15 to 21 members, representing different stakeholder interests and areas of technical expertise related to Delaware’s Coastal Zone. Nominations are due by March 23.

The Coastal Zone Conversion Permit Act was passed by the General Assembly and signed into law by Governor John Carney in August 2017. The Act authorizes the permitted use of 14 existing industrial sites in Delaware’s Coastal Zone for new heavy industry, construction, operation, and – in certain approved cases – bulk product transfer. The Act requires DNREC to develop and promulgate regulations for issuance of conversion permits by Oct. 1, 2019. The Regulatory Advisory Committee (RAC) will provide guidance and feedback to DNREC on the development of these regulations.

The committee structure was determined by using extensive public feedback collected from stakeholder interviews, public workshops, and verbal and written public comments.

“Delaware’s Coastal Zone is important to and valued by Delawareans in many different ways,” said DNREC Secretary Shawn Garvin. “We want people from all communities, organizations, and interests to feel that their voices are being heard in this process, and we encourage individuals to nominate themselves or others to become part of this committee.”

A nomination form and a conflict-of-interest disclosure form are required for each nominee. Forms can be found on DNREC’s alpha website, or can be obtained by contacting the DNREC’s Division of Energy & Climate at 302-735-3480, or by emailing CZA_Conversion_Permits@delaware.gov. Coastal Zone Conversion Permit RAC nominations should be sent by US Mail to DNREC Division of Energy & Climate, Attn: Susan Love, 100 West Water Street, Suite 5A, Dover, DE 19904 or by email to CZA_Conversion_Permits@delaware.gov. For more information, please visit de.gov/conversionpermits.

Media contact: Joanna Wilson, DNREC Public Affairs, 302-739-9902

Vol. 48, No. 34

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Additional changes proposed to state licensing regulations

Dover, DE – Continuing the efforts directed by Gov. Jack Markell to modernize and streamline rules and regulations for professional licensure, the Department of State released a new list of recommendations crafted to cut red tape and expand career opportunities for thousands of Delawareans.

Recommendations from the Delaware Professional Licensing Review Committee include changes to criminal history rules that currently stand in the way of employment and career advancement for professionals who have paid their debts to society. The proposed changes also seek to expand reciprocity for professionals licensed in neighboring states who wish to practice in Delaware, and broaden the authority of the Division of Professional Regulation to review and reject rules that don’t serve the public interest.

“Every Delawarean deserves the opportunity to reach their full potential,” Governor Markell said. “Licensing requirements are important for public safety, but inappropriate rules can also create barriers to employment. We believe that government should encourage all those who wish to be contributing members of our community and that’s why we’ve worked to support individuals on their path to enter careers in skilled professions. I appreciate the members of my cabinet, legislators, and the business community who came together to identify common sense recommendations that remove unnecessary barriers to entry, and support an open and welcoming environment for businesses and licensed professionals, while meeting our obligation to protect the public.”

The review committee was established by Executive Order 60, issued by Gov. Markell in April for the purpose of identifying certain barriers facing Delawareans who are seeking to enter licensed professions, and proposing ideas to appropriately dismantle those barriers.

“This committee took a hard look at the rules and regulations that govern how the state issues licenses for all kinds of professional fields, and we found plenty of room for changes,” said Secretary of State Jeff Bullock, who chaired the panel. “With the help of the next General Assembly, we can make some common-sense adjustments that will open up a whole new level of opportunity for so many people across the state who want to start or advance their careers.”

The review committee is the latest in a series of efforts from the Markell administration to ease regulatory burden on both individuals and small businesses. In 2012, Markell signed executive order 36 which required each department and agency in the Executive Branch to conduct a thorough review of all regulations in an effort to eliminate or streamline ones that were overly burdensome. This practice was made permanent when the Governor signed House Bill 147 in 2015.

While several of the changes proposed by the committee can be implemented by the Division of Professional Regulation and the various licensing boards and commissions it oversees, some of the recommendations will require legislative action to take effect.

“Government red tape should never prevent people from getting a job. The paramount goal should always be full, gainful employment,” said Rep. Gerald Brady, who served on the review committee. “Extending the stigmatization that accompanies a criminal conviction beyond the time and terms of the prescribed sentence is unjust, unwise, and uneconomical. Lack of full gainful employment often leads to criminal activity in the first place. I’m pleased with the results of the committee’s work, and I hope these changes make a real difference in people’s lives.”

“All of these reform efforts are about one thing: increasing opportunity,” said Senate Majority Whip Nicole Poore, also a member of the committee. “Whether it’s making sure Delawareans with unique skills have a better chance to earn a living or that consumers have more options for the services they rely on, expanding opportunity will have a tremendous impact on our state’s economy.”

“There’s a thin line between ‘oversight’ and ‘overstepping’ and it’s critical that as a state, we’re on the right side of that line,” said retired Sen. Karen Peterson, who fought for an initial round of professional licensing reforms early in her Senate career. “Good people who do good work shouldn’t be prohibited from earning an honest living because of a mistake they made earlier in their life or because they got their formal training somewhere else. We now have a better balance between safety and sensibility thanks to the work of this committee and buy-in from the Governor’s Office.”

In addition to state officials and legislators, the Professional Licensing Review Committee also included members from regulated professions and community organizations.

“Under the leadership of Gov. Markell, Delaware has made enormous progress towards removing debilitating systemic barriers for individuals returning from incarceration,” said committee member Charles A. Madden, executive director of the Wilmington HOPE Commission. “These recommendations represent yet another significant act by the Markell administration to allow Delawareans the opportunity to rebuild their lives and pursue fulfilling careers – careers that help to restore their personal dignity, the opportunity to provide for their families, and their ability to contribute to the rebuilding of their communities.”

“We want Delaware to be in the business of granting people opportunities to pursue their career goals, not limiting them with onerous rules and regulations,” said committee member Nello Paoli Jr., president of Preferred Electric Inc. in New Castle. “Better standards lead to better education, which leads to better economic opportunities.”