CS/CS/CS/HB 1509 - Prescription Drug Reform Act Summary

• Requires prescription drug manufacturers to notify the Department of Business and Professional Regulation of reportable drug price increases (15% increase within 12 months or 30% cumulative increase over 3 years) on a specified form and submit annual reports detailing price increase factors.

• Establishes comprehensive regulation of pharmacy benefit managers (PBMs) requiring them to obtain certificates of authority from the Office of Insurance Regulation, with mandatory biennial examinations and $5,000 administrative fines per violation.

• Prohibits PBM practices including spread pricing, financial clawbacks, unilateral contract changes, and restrictions on pharmacy disclosures; requires pass-through pricing models and 100% rebate pass-through to pharmacy benefits plans.

• Requires pharmacy audits to comply with specific standards including 7-day notice before initial audits, pharmacist consultation for clinical reviews, 120-day preliminary report timelines, and prohibition on extrapolation-based recoupments.

• Appropriates $980,705 in recurring funds and $146,820 in nonrecurring funds to the Office of Insurance Regulation with 10 authorized full-time positions to implement the act, effective July 1, 2023.