Senate Bill No. 1389 - Summary

• Requires pharmacy benefit managers to register annually with the Department of Insurance and prohibits them from charging pharmacy benefits plans different amounts than what they reimburse pharmacies for the same drugs and dispensing fees (spread pricing prohibition).

• Mandates that pharmacy benefit managers pass through 100% of manufacturer rebates to pharmacy benefits plans and requires pass-through pricing models where plan payments equal pharmacy reimbursements.

• Establishes requirements for maximum allowable cost pricing including 30-day appeal periods for pharmacies to challenge reimbursement rates, with mandatory response timelines and reporting to the Department of Insurance every 90 days.

• Requires comprehensive contract terms between pharmacy benefit managers and plans including network adequacy standards meeting Medicare Part D requirements, 90-day continuity-of-care periods when drugs are removed from formularies, and prohibition of conditioning network participation on other network participation.

• Prohibits pharmacy benefit managers from penalizing pharmacies for disclosing cost information to patients, restricting information disclosure to regulators, charging claim adjudication fees to pharmacies, or terminating pharmacies for exercising rights under the law.