Existing law provides for the regulation of health care service plans by the Department of Managed Health Care. A willful violation of those provisions is a crime. Existing law requires health care service plans that cover prescription drug benefits and contract with pharmacy providers and pharmacy benefit managers to meet specified requirements, including requiring pharmacy benefit managers with whom they contract to register with the department and exercise good faith and fair dealing, among other requirements.
This bill would modify the above-described requirement that the pharmacy benefit manager exercise good faith and fair dealing to instead require the pharmacy benefit manager to hold a fiduciary duty in the performance of its contractual duties and carry out that duty in accordance with state and federal law. The bill would require the pharmacy benefit manager to remit 100% of specified rebates, fees, alternative discounts, and other remuneration received to the health care service plan and would prohibit the pharmacy benefit manager from entering into any contract for pharmacy benefit management services that is contrary to that requirement.
Existing law provides for the registration and regulation of pharmacy benefit managers, as defined, that contract with health care service plans to manage their prescription drug coverage. Under existing law, a pharmacy benefit manager is required to submit specified information to the department to apply to register with the department.
To apply to register with the department, this bill would additionally require a pharmacy benefit manager to submit the name, address, and relationship of any affiliated entity and group purchasing organization in which the pharmacy benefit manager has ownership, control, financial interest, or a contractual relationship. The bill would impose various conditions of registration that a pharmacy benefit manager is required to comply with, including, among other things, prohibiting a pharmacy benefit manager, group purchasing organization, and any affiliated entity from deriving income from spread pricing. The bill would require compensation arrangements governed by these conditions to be open for inspection and audit by the department.
This bill would require a pharmacy benefit manager to, beginning October 1, 2026, annually report specified information to the department regarding the covered drugs dispensed at a pharmacy and specified information about the pharmacy benefit manager's revenue, expenses, health care service plan contracts, the scope of services provided to the health care service plan, and the number of enrollees that the pharmacy benefit manager serves. The bill would require the department to compile this reported information and make the report publicly available, as specified, but would exempt records other than the report from public disclosure. The bill would include in the requirements that health care service plans are required to impose on a pharmacy benefit manager with which they contract, the requirement that the pharmacy benefit manager comply with these reporting requirements. Because a willful violation of these provisions by a health care service plan would be a crime, this bill would impose a state-mandated local program.
This bill would define various terms for purposes of these provisions.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
Existing constitutional provisions require that a statute that limits the right of access to the meetings of public bodies or the writings of public officials and agencies be adopted with findings demonstrating the interest protected by the limitation and the need for protecting that interest.
This bill would make legislative findings to that effect.

Statutes affected:
AB 910: 1385.004 HSC
02/19/25 - Introduced: 1385.004 HSC
03/24/25 - Amended Assembly: 1385.004 HSC
04/10/25 - Amended Assembly: 1385.001 HSC, 1385.001 HSC, 1385.004 HSC, 1385.005 HSC, 1385.005 HSC