H.B. 1609 Summary

• Establishes fiduciary duties for pharmacy benefit managers requiring them to act with care, skill, prudence, and diligence on behalf of covered entity clients and prohibits conflicts of interest without written notification.

• Prohibits pharmacy benefit managers from requiring patient out-of-pocket payments exceeding the lesser of: applicable copayment, allowable claim amount, uninsured cash price, or pharmacy reimbursement amount.

• Eliminates spread pricing by prohibiting pharmacy benefit managers from retaining any amount charged to covered entities in excess of what they paid to pharmacies.

• Requires annual transparency reports to the insurance commissioner disclosing aggregate rebates received, administrative fees, retained rebates, and retained rebate percentages, to be published on the insurance division website.

• Replaces pharmacy benefit manager registration requirement with state licensure (valid one calendar year, $140 fee), increases penalties for unlicensed operation from $500 to up to $5,000 per day, and expands grounds for license suspension or revocation.