The Kansas Pharmacy Services Administrative Organization Act establishes a regulatory framework for pharmacy services administrative organizations (PSAOs) operating in Kansas. The act defines key terms, including "pharmacy benefits manager" (PBM) and "pharmacy services administrative organization," and mandates that PSAOs must obtain a license from the Kansas Department of Insurance to operate. The commissioner of insurance is tasked with developing the licensure application process, which includes a fee structure and requirements for disclosure of ownership and management. The act also emphasizes the confidentiality of certain information and outlines the responsibilities of PSAOs in their contracts with independent pharmacies, including timely communication and the prohibition of discriminatory pricing practices.

Additionally, the act stipulates that PSAOs must not require independent pharmacies to purchase drugs exclusively from entities in which they have an ownership interest. It establishes penalties for noncompliance, including daily fines and potential license revocation. The commissioner is authorized to adopt necessary rules and regulations to implement the act, which will take effect upon publication in the statute book. Overall, the legislation aims to enhance transparency and accountability in the relationship between PSAOs, independent pharmacies, and PBMs, ensuring fair practices within the pharmacy services sector.