Since 2019, the number of states with anti-steering pharmacy benefit laws has increased exponentially. From the early adopters of Louisiana, Minnesota, and Oklahoma, anti-steering has spread to 18 states across the country.
Anti-steering in pharmacy benefits is a policy trend that prohibits PBMs from steering individuals to use their owned or affiliated pharmacies and may require plan sponsors to use an open or unrestricted pharmacy network. Prohibited steering includes requiring members to use a PBM-owned or -affiliated pharmacy. However, in some states, prohibited steering is broader and also impacts incentivized use, such as offering reduced copays to members that use a PBM mail-order pharmacy.
Each state’s anti-steering law is unique, with some states restricting steering practices across retail, mail, and specialty drug channels, and other states permitting steering when it comes to specialty drugs. While increased consumer choice can lead to finding better price points for members, these policy changes may also bring less favorable pricing guarantees and elimination of cost-saving programs, such as manufacturer copay assistance programs and mandatory mail-order, from a plan sponsor perspective.
Most anti-steering laws impact fully insured plans and self-funded non-ERISA plans. However, certain state regulators may interpret the law differently, leading to potential enforcement of these laws against self-funded ERISA plans too. For example, Oklahoma, Tennessee, and West Virginia have all signaled that anti-steering laws in their states may be enforced against self-funded ERISA plans.
Depending on the effective date and the pharmacy benefit managers’ interpretation of the requirements, plan sponsors may already be feeling the impact of anti-steering legislation. Benefits advisors need to keep up with these developments, as they may have a financial impact on clients. Although most state legislative sessions have drawn to a close for 2022, be sure to keep an eye on your state legislature when they reconvene. When it comes to pharmacy benefits regulations, 2023 promises to be another busy year.