SF278 Summary

• Creates new state licensure and regulation framework for pharmacy benefit managers (PBMs) effective January 1, 2020, administered by the Commissioner of Commerce with $8,500 annual licensing fees and $5,000 per day penalties for unlicensed operation.

• Requires PBMs to maintain adequate pharmacy networks meeting accessibility standards, submit annual transparency reports disclosing rebates, fees, and claim-level data to the commissioner starting June 1, 2020, and provide specific financial information to plan sponsors upon request.

• Establishes comprehensive pharmacy audit standards including 14-day advance notice, 24-month audit period limits, prohibition on extrapolation, 60-day preliminary reports, 120-day final reports, and 45-day appeal periods with specific recoupment restrictions.

• Prohibits PBMs from penalizing enrollees based on pharmacy ownership interests, restricting 340B Drug Pricing Program participation, charging excessive point-of-sale payments, making retroactive claim adjustments outside audits, or imposing gag clauses preventing cost disclosure.

• Appropriates $340,000 for fiscal year 2020 and $383,000 for fiscal year 2021 to the Commissioner of Commerce for licensing activities, with base appropriations of $425,000 for fiscal years 2022-2023, including $246,000 annually for two enforcement investigators.