House Bill No. 970 introduces a new subchapter, Subchapter B-3, to Chapter 1369 of the Texas Insurance Code, focusing on prescription drug price reductions. The bill defines key terms such as "manufacturer" and outlines the applicability of the subchapter to various health benefit plans, including those issued by insurance companies, health maintenance organizations, and other entities. It specifies that pharmacy benefit managers (PBMs) must ensure that any price reductions obtained from manufacturers are fully reflected in the price of prescription drugs dispensed to enrollees. Additionally, the bill allows for certain exceptions, such as for Medicaid and TRICARE programs.

The legislation also establishes civil penalties for PBMs that fail to comply with the price reduction requirements, imposing a penalty of three times the unreflected price reduction plus an additional $5,000 for each violation. The Texas Attorney General is granted the authority to seek injunctive relief and recover penalties for violations. The provisions of this subchapter will apply to health benefit plans delivered or renewed on or after January 1, 2026, and the act is set to take effect on September 1, 2025.

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