1 STATE OF OKLAHOMA
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2 1st Session of the 59th Legislature (2023)
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3 SENATE BILL 879 By: Montgomery
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6 AS INTRODUCED
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7 An Act relating to pharmacy benefits managers;
7 amending 36 O.S. 2021, Sections 6960, as amended by
8 Section 1, Chapter 38, O.S.L. 2022 and 6962, as
8 amended by Section 2, Chapter 38, O.S.L. 2022 (36
9 O.S. Supp. 2022, Sections 6960 and 6962), which
9 relate to definitions and compliance review; adding
10 and modifying definitions; prohibiting certain
10 contractual provisions; requiring publication of
11 certain formulary information; requiring pharmacy
11 benefits managers to provide certain reports;
12 requiring publication of certain monies received by
12 pharmacy benefits managers; providing confidentiality
13 of certain records; establishing compliance measures
13 for defined cost sharing; amending 36 O.S. 2021,
14 Section 6964, which relates to drug formulary
14 decisions; modifying requirements and duties of
15 pharmacy and therapeutics committee members; amending
15 51 O.S. 2021, Section 24A.3, as last amended by
16 Section 1, Chapter 402, O.S.L. 2022 (51 O.S. Supp.
16 2022, Section 24A.3), which relates to definitions;
17 modifying definition; amending 59 O.S. 2021, Sections
17 357 and 358, which relate to definitions and
18 licensure; modifying definitions; modifying
18 requirements for certain applications; updating
19 statutory references; providing for codification; and
19 providing an effective date.
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22 BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
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Req. No. 712 Page 1
 1 SECTION 1. AMENDATORY 36 O.S. 2021, Section 6960, as
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2 amended by Section 1, Chapter 38, O.S.L. 2022 (36 O.S. Supp. 2022,
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3 Section 6960), is amended to read as follows:
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4 Section 6960. For purposes of the Patient’s Right to Pharmacy
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5 Choice Act:
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6 1. “Aggregate retained rebate percentage” means the percentage
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7 of all rebates received by a PBM from all pharmaceutical
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8 manufacturers which is not passed on to the PBM’s health plan or
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9 health insurer clients. The aggregate retained rebate percentage
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10 shall be expressed without disclosing any identifying information
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11 regarding any health plan, prescription drug, or therapeutic class,
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12 and shall be calculated by dividing:
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13 a. the aggregate dollar amount of all rebates that the
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14 PBM received during the prior calendar year from all
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15 pharmaceutical manufacturers that did not pass through
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16 to the pharmacy benefits manager’s health plan or
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17 health insurer clients, by
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18 b. the aggregate dollar amount of all rebates that the
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19 pharmacy benefits manager received during the prior
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20 calendar year from all pharmaceutical manufacturers;
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21 2. “Defined cost sharing” means a deductible payment or
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22 coinsurance amount imposed on an enrollee for a covered prescription
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23 drug under the enrollee’s health plan;
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 1 3. “Formulary” means a list of prescription drugs, any
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2 prescription drug accompanying tiering, and other coverage
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3 information that has been developed by a health insurer or its
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4 designee that is referenced in determining applicable coverage and
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5 benefit levels;
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6 4. “Generic equivalent” means a drug that is designated as
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7 therapeutically equivalent by the United States Food and Drug
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8 Administration’s Approved Drug Products with Therapeutic Equivalence
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9 Evaluations; provided, however, a drug shall not be considered a
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10 generic equivalent until the drug becomes nationally available;
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11 5. “Health insurer” or “insurer” means any corporation,
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12 association, benefit society, exchange, partnership, or individual,
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13 or other legal entity licensed by the Oklahoma Insurance Code to
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14 provide health benefit plans;
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15 6. “Health insurer administrative service fees” means fees or
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16 payments from a health insurer or its designee to, or otherwise
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17 retained by, a PBM or its designee pursuant to a contract between a
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18 PBM or affiliate and the health insurer or its designee in
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19 connection with the PBM’s managing or administering the pharmacy
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20 benefit and administering, invoicing, allocating, and collecting
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21 rebates;
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22 7. “Health benefit plan” means a policy, contract,
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23 certification, or agreement offered or issued by a health insurer to
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 1 provide, deliver, arrange for, pay for, or reimburse any of the
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2 costs of health services;
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3 2. 8. “Health insurer payor” means a health insurance company,
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4 health maintenance organization, union, hospital and medical
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5 services organization or any entity providing or administering a
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6 self-funded health benefit plan;
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7 3. 9. “Mail-order pharmacy” means a pharmacy licensed by this
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8 state that primarily dispenses and delivers covered drugs via by
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9 common carrier;
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10 10. “Pharmaceutical manufacturing administrative fees” means
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11 fees or payments from pharmaceutical manufacturers to, or otherwise
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12 retained by, a pharmacy benefits manager (PBM) or its designee
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13 pursuant to a contract between a PBM or affiliate and the
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14 manufacturer in connection with the PBM’s administering, invoicing,
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15 allocating, and collecting rebates;
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16 11. “Pharmacy” or “provider” means a pharmacy as defined
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17 pursuant to Section 353.1 of Title 59 of the Oklahoma Statutes;
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18 4. 12. “Pharmacy benefits manager” or “PBM” means a person
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19 that, either directly or through an intermediary, performs pharmacy
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20 benefits management, as defined by paragraph 6 of Section 357 of
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21 Title 59 of the Oklahoma Statutes, and any other person acting for
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22 such person under a contractual or employment relationship in the
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23 performance of pharmacy benefits management for a managed-care
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24 company, nonprofit hospital, medical service organization, insurance
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 1 company, third-party payor or a health program administered by a
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2 department of this state;
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3 13. “Price protection rebate” means a negotiated price
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4 concession that accrues directly or indirectly to the health insurer
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5 or other party on behalf of the health insurer in the event of an
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6 increase in the wholesale acquisition cost of a drug above a
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7 specified cost threshold;
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8 5. “Provider” means a pharmacy, as defined in Section 353.1 of
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9 Title 59 of the Oklahoma Statutes or an agent or representative of a
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10 pharmacy;
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11 14. “Rebates” means:
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12 a. negotiated price concessions including but not limited
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13 to base price concessions, whether described as a
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14 rebate or otherwise, and reasonable estimates of any
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15 price protection rebates and performance-based price
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16 concessions that may accrue directly or indirectly to
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17 the PBM during the coverage year from a manufacturer,
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18 dispensing pharmacy, or other party in connection with
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19 the dispensing or administration of a prescription
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20 drug, and
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21 b. reasonable estimates of any price concessions, fees,
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22 and other administrative costs that are passed
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23 through, or are reasonably anticipated to be passed
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 1 through, to the PBM and serve to reduce the PBM’s
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2 liabilities for a prescription drug;
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3 6. 15. “Retail pharmacy network” means retail pharmacy
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4 providers contracted with a PBM in which the pharmacy primarily
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5 fills and sells prescriptions via from a retail, storefront
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6 location;
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7 7. 16. “Rural service area” means a five-digit ZIP code in
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8 which the population density is less than one thousand (1,000)
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9 individuals per square mile;
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10 8. 17. “Spread pricing” means a prescription drug pricing model
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11 utilized by a pharmacy benefits manager in which the PBM charges a
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12 health benefit plan a contracted price for prescription drugs that
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13 differs from the amount the PBM directly or indirectly pays the
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14 pharmacy or pharmacist for providing pharmacy services;
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15 9. 18. “Suburban service area” means a five-digit ZIP code in
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16 which the population density is between one thousand (1,000) and
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17 three thousand (3,000) individuals per square mile; and
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18 10. 19. “Urban service area” means a five-digit ZIP code in
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19 which the population density is greater than three thousand (3,000)
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20 individuals per square mile.
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21 SECTION 2. AMENDATORY 36 O.S. 2021, Section 6962, as
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22 amended by Section 2, Chapter 38, O.S.L. 2022 (36 O.S. Supp. 2022,
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23 Section 6962), is amended to read as follows:
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 1 Section 6962. A. The Oklahoma Insurance Department shall
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2 review and approve retail pharmacy network access for all pharmacy
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3 benefits managers (PBMs) to ensure compliance with Section 6961 of
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4 this title.
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5 B. A PBM, or an agent of a PBM, shall not:
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6 1. Cause or knowingly permit the use of advertisement,
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7 promotion, solicitation, representation, proposal or offer that is
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8 untrue, deceptive or misleading;
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9 2. Charge a pharmacist or pharmacy a fee related to the
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10 adjudication of a claim including without limitation a fee for:
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11 a. the submission of a claim,
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12 b. enrollment or participation in a retail pharmacy
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13 network, or
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14 c. the development or management of claims processing
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15 services or claims payment services related to
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16 participation in a retail pharmacy network;
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17 3. Reimburse a pharmacy or pharmacist in the state an amount
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18 less than the amount that the PBM reimburses a pharmacy owned by or
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19 under common ownership with a PBM for providing the same covered
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20 services. The reimbursement amount paid to the pharmacy shall be
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21 equal to the reimbursement amount calculated on a per-unit basis
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22 using the same generic product identifier or generic code number
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23 paid to the PBM-owned or PBM-affiliated pharmacy;
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 1 4. Deny a provider the opportunity to participate in any
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2 pharmacy network at preferred participation status if the provider
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3 is willing to accept the terms and conditions that the PBM has
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4 established for other providers as a condition of preferred network
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5 participation status;
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6 5. Deny, limit or terminate a provider’s contract based on
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7 employment status of any employee who has an active license to
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8 dispense, despite probation status, with the State Board of
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9 Pharmacy;
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10 6. Retroactively deny or reduce reimbursement for a covered
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11 service claim after returning a paid claim response as part of the
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12 adjudication of the claim, unless:
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13 a. the original claim was submitted fraudulently, or
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14 b. to correct errors identified in an audit, so long as
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15 the audit was conducted in compliance with Sections
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16 356.2 and 356.3 of Title 59 of the Oklahoma Statutes;
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17 7. Fail to make any payment due to a pharmacy or pharmacist for
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18 covered services properly rendered in the event a PBM terminates a
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19 provider from a pharmacy benefits manager network;
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20 8. Conduct or practice spread pricing, as defined in Section 1
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21 of this act 6960 of this title, in this state; or
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22 9. Charge a pharmacist or pharmacy a fee related to
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23 participation in a retail pharmacy network including but not limited
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24 to the following:
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 1 a. an application fee,
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2 b. an enrollment or participation fee,
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3 c. a credentialing or re-credentialing fee,
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4 d. a change of ownership fee, or
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5 e. a fee for the development or management of claims
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6 processing services or claims payment services.
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7 C. The prohibitions under this section shall apply to contracts
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8 between pharmacy benefits managers and providers for participation
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9 in retail pharmacy networks.
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10 1. A PBM contract shall:
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11 a. not restrict, directly or indirectly, any pharmacy
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12 that dispenses a prescription drug from informing, or
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13 penalize such pharmacy for informing, an individual of
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14 any differential between the individual’s out-of-
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15 pocket cost or coverage with respect to acquisition of
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16 the drug and the amount an individual would pay to
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17 purchase the drug directly, and
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18 b. ensure that any entity that provides pharmacy benefits
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19 management services under a contract with any such
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20 health plan or health insurance coverage does not,
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21 with respect to such plan or coverage, restrict,
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22 directly or indirectly, a pharmacy that dispenses a
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23 prescription drug from informing, or penalize such
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24 pharmacy for informing, a covered individual of any
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 1 differential between the individual’s out-of-pocket
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2 cost under the plan or coverage with respect to
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3 acquisition of the drug and the amount an individual
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4 would pay for acquisition of the drug without using
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5 any health plan or health insurance coverage,
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6 c. not prohibit from or penalize for a pharmacy or
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7 pharmacist disclosing to an individual information
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8 regarding the existence and clinical efficacy of a
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9 generic equivalent that would be less expensive to the
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10 enrollee under his or her health plan prescription
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11 drug benefit or outside his or her health plan
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12 prescription drug benefit, without requesting any
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13 health plan reimbursement, than the drug that was
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14 originally prescribed, and
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15 d. not prohibit from or penalize for a pharmacy or
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16 pharmacist selling to an individual, instead of a
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17 particular prescribed drug, a therapeutically
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18 equivalent drug that would be less expensive to the
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19 enrollee under his or her health plan prescription
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20 drug benefit or outside his or her health plan
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21 prescription drug benefit, without requesting any
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22 health plan reimbursement, than the drug that was
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23 originally prescribed.
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 1 2. A pharmacy benefits manager’s contract with a provider shall
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2 not prohibit, restrict or limit disclosure of information to the
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3 Insurance Commissioner, law enforcement or state and federal
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4 governmental officials investigating or examining a complaint or
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