Act No. 127 Page 1 of 1
2024
This act summary is provided for the convenience of the public and members of the General Assembly. It
is intended to provide a general summary of the act and may not be exhaustive. It has been prepared by the
staff of the Office of Legislative Counsel without input from members of the General Assembly. It is not
intended to aid in the interpretation of legislation or to serve as a source of legislative intent.
Act No. 127 (H.233). An act relating to licensure and regulation of pharmacy benefit
managers
Subjects: Health; prescription drugs; health insurance; pharmacies; pharmacy
benefit managers
This act creates a new chapter on pharmacy benefit managers (PBMs) that establishes
standards and criteria for licensure and regulation of PBMs. It consolidates existing
PBM-related provisions into the new chapter, creates a PBM licensure requirement, and
authorizes the Department of Financial Regulation to regulate PBMs. The act establishes
fees for PBM licensure and prohibits PBMs from using “spread pricing,” in which a PBM
charges more to an insurer or other payer for a prescription drug than the PBM
reimburses the pharmacy for dispensing the drug and the PBM keeps the difference. The
act requires PBMs and health insurers to attribute all amounts paid by or on behalf of a
patient for a prescription drug, including coupons and discounts, toward the patient’s
deductible and out-of-pocket limits, except that third-party payments do not have to be
counted if there is a generic version of the drug and there is not a specific reason why the
patient needs to use the brand-name version of the drug.
The act adds PBMs to an existing law prohibiting misleading or deceptive health
insurance marketing and advertising. The act prohibits health insurers and PBMs from
attempting to regulate prescription drugs, pharmacies, or pharmacists in a manner that is
more restrictive than or inconsistent with State or federal law or Vermont Board of
Pharmacy rules. The act prohibits PBMs and pharmacies from directly contacting a
patient without the patient’s consent for the purpose of marketing the pharmacy’s
services, except under certain circumstances. The act also prohibits an insurer or PBM
from changing a patient’s prescription drug order or choice of pharmacy without the
patient’s consent but specifies that this prohibition does not affect Vermont’s generic
substitution law, which requires pharmacists to substitute a lower-cost generic drug in
most instances when a brand-name drug is prescribed.
The act repeals existing PBM laws on July 1, 2029, and specifies that, to the extent
that existing PBM laws and the act’s PBM provisions conflict, the act’s provisions will
control. The act also sets forth additional implementation provision, creates three new
positions at the Department of Financial Regulation to regulate PBMs, and appropriates
$405,000.00 to the Department from its Insurance Regulatory and Supervision Fund in
fiscal year 2025 for PBM regulation. And the act directs the Department to report to the
General Assembly on or before January 15, 2025 whether the Department recommends
creating a private right of action to enforce the new PBM chapter.
Effective Date: July 1, 2024
VT LEG #377603 v.2


Statutes affected:
As Introduced: 8-4084, 8-4089j
As Passed By the House -- Official: 8-4084, 8-4089j
As Passed By the House -- Unofficial: 8-4084, 8-4089j
As Passed by Both House and Senate -- Official: 8-4084, 8-4089j
As Passed by Both House and Senate -- Unofficial: 8-4084, 8-4089j
As Enacted: 8-4084, 8-4089j