SB 2280 Summary

• Prohibits managed care contracts entered after June 30, 2020 from authorizing pharmacy benefit managers to reimburse pharmacies using maximum allowable cost basis, and voids existing provisions using this method.

• Prohibits pharmacy benefit managers from retaining spread pricing (the difference between reimbursement rates paid by health plans and actual payments to pharmacies) and from engaging in unfair competition or deceptive business practices.

• Prohibits pharmacy benefit managers from reimbursing 340B pharmacies or independent/rural pharmacies differently than other network pharmacies, and requires rural pharmacies receive reimbursement at or above the "rural rate" with 30 days' notice for rate changes.

• Prohibits pharmacy benefit managers from preventing pharmacists from disclosing to patients their cost-sharing amounts or more affordable alternative drug options.

• Increases pharmacy benefit manager registration and renewal fees from $140 to $500, requires annual transparency reporting on rebates and utilization data, mandates Insurance Commissioner annual reports to legislature, and increases penalties for violations from $500 to $5,000.