Senate Bill No. by Senator Harris seeks to regulate pharmacy benefit managers (PBMs) in Louisiana by amending existing laws and introducing new provisions aimed at increasing transparency and accountability in the sector. Key changes include the prohibition of spread pricing, which is the practice of charging health plans more for prescription drugs than what PBMs pay pharmacies. The bill defines terms related to pharmacy benefit management, such as "pharmacy benefit management fee," "rebate," and "effective rate pricing." It establishes that PBMs can only earn income from management fees and must certify compliance with these regulations annually. Additionally, contracts between PBMs and insurers or health plans must specify all forms of revenue and acknowledge that spread pricing is not permitted.

The legislation also enhances audit rights for the commissioner of insurance and health plans, allowing for annual audits of PBMs and the request for detailed information regarding reimbursements and rebates. Civil monetary penalties are imposed for violations of the new regulations, and certain provisions related to pharmacy claims fees are repealed. The bill further prohibits PBMs from engaging in "Effective Rate Pricing" or spread pricing without proper notice and requires them to disclose any ownership interest in pharmacies when steering patients. Overall, the bill aims to protect patients' rights and ensure fair practices in pharmacy benefit management in Louisiana.

Statutes affected:
SB194 Original: 22:2(A), 22:1867(A), 40:2870(A)(4), 22:1856(F)