A Bill for an Act
Page 1, Line 101Concerning pharmacy benefit manager practices that affect
Page 1, Line 102prescription drug costs.
Bill Summary
(Note: This summary applies to this bill as introduced and does not reflect any amendments that may be subsequently adopted. If this bill passes third reading in the house of introduction, a bill summary that applies to the reengrossed version of this bill will be available at http://leg.colorado.gov.)
The bill:
- Allows a pharmacy benefit manager (PBM) to earn income derived from the assessment of a flat-dollar service fee;
- Prohibits a PBM from earning income based on the cost of a prescription drug;
- Prohibits a PBM from designing a formulary to favor a certain branded pharmaceutical or biologic;
- Sets the amount that a PBM shall reimburse an unaffiliated pharmacy or a PBM-affiliated retail, mail order, or specialty pharmacy for a prescription drug;
- Requires a PBM to credit income derived from a source other than a flat-dollar service fee to a health insurance carrier (carrier) or a self-funded health benefit plan; and
- Requires a PBM to make certain documents and data available to a carrier, a self-funded plan, or the commissioner of insurance upon request.
Page 2, Line 1Be it enacted by the General Assembly of the State of Colorado:
Page 2, Line 2SECTION 1. In Colorado Revised Statutes, add 10-16-122.8 as follows:
Page 2, Line 310-16-122.8. Pharmacy benefit manager practices -
Page 2, Line 4agreements - fees - documentation - rules. (1) A pharmacy benefit
Page 2, Line 5manager may earn income derived from the assessment of a
Page 2, Line 6single, flat-dollar service fee for the provision of a prescription
Page 2, Line 7drug, which service fee is transparently expressed in a written
Page 2, Line 8agreement between the PBM and a carrier or a self-funded
Page 2, Line 9health benefit plan. The single, flat-dollar service fee may vary
Page 2, Line 10from client to client based on the number of plan participants,
Page 2, Line 11clinical and administrative services provided, value-based payment arrangement, and other considerations.
Page 2, Line 12(2) (a) A PBM shall not:
Page 2, Line 13(I) Earn any income that is directly or indirectly based on
Page 2, Line 14the net acquisition cost of a prescription drug, including income
Page 2, Line 15from prescription drug mark-ups, copayments that exceed the
Page 2, Line 16cost of prescription drugs, up-charging or spread-pricing, group
Page 2, Line 17purchasing organization revenues, manufacturer-derived
Page 2, Line 18revenues, or any other arrangements concerning the pricing of prescription drugs; or
Page 3, Line 1(II) Design a prescription drug formulary to favor a
Page 3, Line 2certain branded pharmaceutical or biologic over a
Page 3, Line 3therapeutically equivalent generic or biosimilar, unless the
Page 3, Line 4branded pharmaceutical or biologic has a lower discounted net
Page 3, Line 5acquisition cost and that lower cost is reflected in a lower out-of-pocket expense for consumers.
Page 3, Line 6(b) This subsection (2) does not prevent a PBM from
Page 3, Line 7negotiating a prescription drug rebate or other discount as a percentage of the prescription drug's list price.
Page 3, Line 8(3) (a) A PBM shall reimburse an unaffiliated pharmacy or
Page 3, Line 9a PBM-affiliated retail, mail order, or specialty pharmacy for
Page 3, Line 10the fulfillment of a prescription drug in an amount equal to the
Page 3, Line 11national average drug acquisition cost for the dispensed
Page 3, Line 12prescription drug ingredients plus a two-dollar fee and a
Page 3, Line 13professional dispensing fee as determined in the pharmacy
Page 3, Line 14contract. If the national average drug acquisition cost is not
Page 3, Line 15available at the time a prescription drug is administered or
Page 3, Line 16dispensed, a PBM shall not reimburse in an amount that is less than the wholesale acquisition cost of the prescription drug.
Page 3, Line 17(b) A PBM shall credit any income derived from sources
Page 3, Line 18other than the single, flat-dollar service fee described in
Page 3, Line 19subsection (1) of this section to the carrier or self-funded health benefit plan with which the PBM has contracted.
Page 3, Line 20(4) Upon request of a carrier, a self-funded health benefit
Page 3, Line 21plan, a fiduciary of the carrier or self-funded health benefit
Page 3, Line 22plan, or the commissioner, a PBM shall make available, within
Page 4, Line 1thirty days after the date of the request and without charge,
Page 4, Line 2documentation and data as requested or as required to fulfill
Page 4, Line 3the carrier's or self-funded health benefit plan's fiduciary
Page 4, Line 4obligations to covered persons. The documentation and data include:
Page 4, Line 5(a) The aggregate dollar and per unit amount of all PBM
Page 4, Line 6income derived from the flat-dollar service fee assessed to the carrier or self-funded health benefit plan;
Page 4, Line 7(b) The prescription drug claims processed by the PBM for
Page 4, Line 8the carrier's health benefit plan or the self-funded health benefit plan; and
Page 4, Line 9(c) The PBM's reimbursements for all retail, mail order,
Page 4, Line 10unaffiliated, and specialty pharmacies that fill prescriptions for covered persons.
Page 4, Line 11(5) The commissioner may adopt rules as necessary to enforce this section.
Page 4, Line 12SECTION 2. Act subject to petition - effective date -
Page 4, Line 13applicability. (1) This act takes effect January 1, 2026; except that, if a
Page 4, Line 14referendum petition is filed pursuant to section 1 (3) of article V of the
Page 4, Line 15state constitution against this act or an item, section, or part of this act
Page 4, Line 16within the ninety-day period after final adjournment of the general
Page 4, Line 17assembly, then the act, item, section, or part will not take effect unless
Page 4, Line 18approved by the people at the general election to be held in November
Page 4, Line 192026 and, in such case, will take effect on the date of the official declaration of the vote thereon by the governor.
Page 4, Line 20(2) This act applies to conduct occurring on or after the applicable
Page 4, Line 21effective date of this act.