SB1164 is a bill that amends the Arizona Revised Statutes by adding new regulations for pharmacy benefit managers (PBMs). The bill prohibits PBMs from limiting or excluding coverage of a prescription drug for a covered individual if the drug was previously approved for coverage and the individual continues to be enrolled with the insurer. PBMs must continue coverage of the drug through the end of the individual's plan year. Additionally, PBMs are restricted from reducing coverage, increasing cost sharing, moving drugs to more restrictive tiers, or removing drugs from formularies unless the FDA revokes approval or the manufacturer discontinues the drug.

The bill also mandates that PBMs and insurers provide written notice of formulary changes or cost-sharing increases at least 60 days before they take effect. It establishes a prescription drug coverage exemption determination process, requiring PBMs to respond to exemption requests within specified timelines and to approve exemptions if certain conditions are met. Denials must be made in writing by a licensed pharmacist or medical director, and individuals have the right to appeal denials. The bill grants the Director of the Department of Insurance and Financial Institutions the authority to impose civil penalties for violations and clarifies that the new requirements do not prevent healthcare providers from prescribing medically necessary drugs or PBMs from updating formularies for new patients. The act applies to contracts entered into, amended, extended, or renewed on or after December 31, 2024.

Statutes affected:
Introduced Version: 20-3335
Senate Engrossed Version: 20-3335