SB 789 Summary

• Requires pharmacy auditors to provide at least 14 calendar days' written notice before conducting audits (30 days for wholesale purchase audits) and limits audits to 50 prescriptions per calendar year across all auditors.

• Prohibits auditors from treating clerical or record-keeping errors (typos, scrivener's errors, computer errors) as fraud and allows pharmacies to submit amended claims instead of facing recoupment without proof of intent to defraud.

• Establishes pharmacy audit requirements including use of licensed pharmacists for clinical reviews, identical audit standards across similarly situated pharmacies, and delivery of preliminary findings within 45 days and final findings within 10 days of receiving additional documentation.

• Prohibits "effective rate contracting" (payment based on effective rates rather than fixed prices) between pharmacies and pharmacy benefits managers, with violations subject to fines, license revocation, or other discipline.

• Requires pharmacy benefits managers leasing networks to other PBMs to provide notice to contracted providers, prohibits combining ERISA and non-ERISA plans, and mandates provisions cannot be waived or voided by contract.

• Effective date: November 1, 2025.