Today, California Governor Jerry Brown signed SB 1195, the California Pharmacists Association (CPhA) sponsored legislation that ends abusive audit practices by Pharmacy Benefit Managers (PBMs). SB 1195, authored by Los Angeles Senator Curren Price (D), is an important achievement in CPhA's efforts to reign in egregious audit practices that have harmed pharmacies.

"Pharmacy audits are an important tool to identify those rare instances where fraud may exist," stated Jon R. Roth, Chief Executive Officer for CPhA. "However, PBMs had grossly overstepped these bounds and were conducting witch hunts that included bounty-hunter type incentives to auditing companies to find non-substantive errors during the audit," continued Roth. "PBMs have been penalizing pharmacies tens-of-thousands of dollars for technical scrivener errors where there is no question that the right patient received the right drug, and the insurance plan was billed the right amount."

Additionally, SB 1195 requires PBMs to provide pharmacies with notice prior to conducting an audit, and allows the pharmacy a due-process appeal of audit findings.

"We want to thank all of our members and partner organizations who informed their legislators of the importance of this bill as well as those who encouraged the Governor to sign it," stated Brian Warren, Director of Government Affairs for CPhA. "Having members engage in the legislative process was critical for helping CPhA convey the importance of this legislation."

CPhA will provide members with an overview of the bill's requirements at the upcoming CPhA West Coast Pharmacy Exchange, March 15-18 in Monterey. Plan to attend the CPhA annual meeting to find out more about this victory. Please click here for a special early-bird promotional price for the conference.