As of May 31, 33 of the 46 states holding legislative sessions this year have concluded their 2024 sessions. More than 600 bills with provisions impactful to PBM clients were introduced this year. Many of these bills were defeated through the advocacy efforts of our External Affairs team and PCMA, as well as other stakeholders.
State bills not enacted
Here is a sample of bills that will not be enacted into law this year:
Alabama
HB 238 banned spread pricing, required PBMs to pay actual acquisition costs plus a dispensing fee based on the Alabama Medicaid dispensing fee of $10.64, prohibited pharmacy fees for credentialing and claims adjudication, and required approval from the Department of Insurance Commissioner to initiate a fraud, waste and abuse investigation.
California
- SB 1008 required an insurer that provides coverage for outpatient prescription drugs to include coverage for certain obesity treatments, with limited ability to apply utilization management on these treatments.
- AB 2180 required amounts paid by or on behalf of an enrollee to be included when calculating an individual’s overall contribution to an out-of-pocket maximum or any cost-sharing requirement under a health benefit plan.
Georgia
- HB 924 prohibited health plan white-bagging policies that require provider-administered prescription drugs be sourced from a pharmacy selected by the health plan. Instead, the drugs would have been required to be purchased directly from the health care provider administering the drug.
- SB 307 required health plans to implement and maintain a gold-carding program that would waive prior authorization requirements for prescribers who met certain thresholds related to prior preauthorization approvals.
- SB 455 banned the establishment of step therapy protocols for serious mental health treatment by health benefit plans.
Iowa
HF 2401 prohibited spread pricing, restricted mandating or incenting individuals to use specific pharmacies, and required PBMs to reimburse pharmacies at actual acquisition cost if it is higher than the MAC list reimbursement amount.
Maryland
Legislative proposals applied existing provisions of law governing PBMs to ERISA plans, restricted the mandating or incenting the use of specialty pharmacies, applied drug manufacturer coupons to an individual’s copay amount, and mandated point-of-sale rebates.
Mississippi
HB 1265 banned spread pricing and required additional mandatory reporting from PBMs and drug manufacturers on rebates and other measures.
Missouri
- HB 1627 and SB 843 prohibited the use of spread pricing, imposed any willing provider requirements, restricted the use of mail order pharmacy, and removed the applicability exclusion for Medicare Part D and self-insured ERISA plans.
- HB 1628 and SB 844 required amounts paid by or on behalf of an enrollee to be included when calculating an individual’s overall contribution to an out-of-pocket maximum or any cost-sharing requirement under a health benefit plan.
- HB 1976 and SB 983 required health plans to implement and maintain a gold-carding program that would waive prior authorization requirements for prescribers who met certain thresholds related to prior preauthorization approvals.
Wisconsin
SB 737 and AB 773 mandated pharmacy reimbursement at NADAC plus a dispensing fee of $10.51, imposed any willing pharmacy requirements, limited mail order pharmacies and prohibited pharmacy accreditation requirements.
Utah
HB 425 included provisions on spread pricing, pharmacy fees, point of sale rebates and out-of-network pharmacies.
New state laws passed
As a result of legislation passed by legislatures during 2024 state sessions, several states have finalized new laws that impact PBM clients. Below is an overview of recent legislation enacted in Washington, Idaho and Kentucky:
In Washington, Governor Inslee signed Senate Bill 5213 into law on March 25. The law will go into effect Jan. 1, 2026, and will:
- Include a provision that prohibits spread pricing
- Ban requirements that patients use PBM-affiliated pharmacies
- Prohibit copay or quantity limit differentials among network pharmacies, including mail order vs. retail pharmacies
- Include a requirement that a home delivery pharmacy receive an affirmative authorization from the patient before dispensing a prescription
In Idaho, House Bill 596 was enacted April 1. The law will be effective Jan. 1, 2025, and will:
- Prohibit spread pricing arrangements
- Require manufacturer rebates to be passed through to clients to offset defined cost sharing and reduce premiums
- Require that in-network pharmacies receive dispensing fees sufficient to cover their costs
- Prohibit mandatory home delivery of prescription drugs
- Prohibit reducing payment for pharmacy services under a reconciliation process to an effective rate of reimbursement
- Require PBMs to allow pharmacy appeals if reimbursement amount is below pharmacy’s acquisition cost
In Kentucky, Senate Bill 188 was enacted on April 5. The law goes into effect Jan. 1, 2025, and will:
- Require minimum pharmacy reimbursement at NADAC plus a dispensing fee of at least $10.64
- Prohibit mandatory home delivery of prescription drugs
- Mandate that non-PBM-affiliated pharmacies are paid no less than PBM-affiliated pharmacies
- Impose any willing pharmacy requirements and pharmacy steering restrictions
- Prohibit reducing payment for pharmacy services under a reconciliation process to an effective rate of reimbursement
A complete review and analysis of these laws to determine their full impact, including applicability to fully insured and self-insured (ERISA and non-ERISA) plans, is currently underway and any changes impacting clients will be communicated by your Optum Rx account management team.
Oklahoma appeals decision to Supreme Court
On May 10, Oklahoma’s Attorney General and Insurance Department asked the U.S. Supreme Court to take up its petition seeking a review of a Tenth Circuit decision in PCMA v. Mulready. That decision overturned portions of Oklahoma’s Patient’s Right to Pharmacy Choice Act of 2019. The key issues involve whether the Employee Retirement Income Security Act (ERISA) and Medicare Part D preempt the state law regulating PBMs.
The Patient’s Right to Pharmacy Choice Act includes provisions that limit a health plan’s pharmacy network structure. More specifically, the law prevents plans from using preferred pharmacy networks and prohibits offering discounts to individuals to use mail order and specialty pharmacies. Left unchallenged, these provisions threaten the ability of employers and Medicare Advantage organizations to design uniform nationwide health plans.
The Tenth Circuit’s decision in favor of PCMA overturned a lower court decision that permitted states to indirectly dictate the design of plans governed by ERISA and Medicare Part D. Oklahoma’s petition argues that the Tenth Circuit’s decision conflicts with the Supreme Court’s precedent and decisions of other circuits regarding the scope of ERISA and Medicare Part D preemption. PCMA expects to file a brief in opposition. The earliest that a decision by the Supreme Court on whether to hear the case could come is early fall 2024.
