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.
This Unofficial Version Includes Committee
Amendments Not Yet Adopted on Second Reading
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 health benefit plan. The
Page 2, Line 9single, flat-dollar service fee may vary from client to client of
Page 2, Line 10the PBM based on the number of health benefit plan
Page 2, Line 11participants, clinical and administrative services provided, value-based payment arrangement, and other considerations.
Page 2, Line 12(2) (a) Throughout the course of providing prescription
Page 2, Line 13drug benefits and claims processing services for health benefit plans, a PBM shall not:
Page 2, Line 14(I) Earn any income that is directly or indirectly based on
Page 2, Line 15the price or cost of a prescription drug, including income from
Page 2, Line 16prescription drug mark-ups, copayments that exceed the cost of
Page 2, Line 17prescription drugs, up-charging or spread-pricing, ormanufacturer-derived revenues; 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 net
Page 3, Line 5acquisition cost and that lower cost is reflected in a lower out-of-pocket expense for consumers.
Page 3, Line 7(b) A PBM must be reimbursed by a health benefit plan for
Page 3, Line 8lowering aggregated prescription drug spending for the plan
Page 3, Line 9over a given period of time. A PBM must also be reimbursed for the direct services the PBM provides to the health benefit plan.
Page 3, Line 10(c) A PBM may include in its contracts or other
Page 3, Line 11agreements with prescription drug manufacturers provisions
Page 3, Line 12that limit the increase of the wholesale acquisition cost of
Page 3, Line 13prescription drugs that they include in their formularies and benefit designs.
Page 3, Line 14(d) This subsection (2) does not prevent a PBM from
Page 3, Line 15negotiating a prescription drug rebate or other discount as a percentage of the prescription drug's list price.
Page 3, Line 16(3) Throughout the course of providing prescription drug
Page 3, Line 17benefits and claims processing services for health benefit plans,
Page 3, Line 18a PBM shall reimburse an unaffiliated pharmacy or a
Page 3, Line 19PBM-affiliated retail, mail order, or specialty pharmacy for the
Page 3, Line 20fulfillment of a prescription drug in an amount equal to the
Page 3, Line 21national average drug acquisition cost for the dispensed
Page 3, Line 22prescription drug ingredients and a reasonable and adequate
Page 4, Line 1dispensing fee. If the national average drug acquisition cost is
Page 4, Line 2not available at the time a prescription drug is administered or
Page 4, Line 3dispensed, a PBM shall not reimburse in an amount that is less than the wholesale acquisition cost of the prescription drug.
Page 4, Line 5(4) (a) A contract between a PBM and a covered person's
Page 4, Line 6health benefit plan must include a provision that requires the
Page 4, Line 7PBM to disclose prescription drug cost information to the
Page 4, Line 8health benefit plan, including claims-level pharmacy data and
Page 4, Line 9PBM income derived from prohibited sources that the PBM must
Page 4, Line 10pass through to the healthbenefit plan.The information must
Page 4, Line 11be provided within thirty days after the date of the notification
Page 4, Line 12to the PBM by the health benefit plan or at regular negotiated
Page 4, Line 13reporting intervals necessary for the health benefit plan to
Page 4, Line 14determine the PBM's compliance with the contract terms and
Page 4, Line 15this section. The PBM shall assess no additional fees with regard to provision of this information.
Page 4, Line 16(b) The contract between the PBM and a covered person's
Page 4, Line 17health benefit plan must include a provision authorizing the
Page 4, Line 18covered person's health benefit plan to annually execute an
Page 4, Line 19audit for the purpose of validating compliance with contract terms and this section.
Page 4, Line 20(5) The commissioner may adopt rules as necessary to enforce this section.
Page 4, Line 21SECTION 2. Act subject to petition - effective date -
Page 4, Line 22applicability. (1) This act takes effect January 1, 2027; except that, if a
Page 4, Line 23referendum petition is filed pursuant to section 1 (3) of article V of the
Page 5, Line 1state constitution against this act or an item, section, or part of this act
Page 5, Line 2within the ninety-day period after final adjournment of the general
Page 5, Line 3assembly, then the act, item, section, or part will not take effect unless
Page 5, Line 4approved by the people at the general election to be held in November
Page 5, Line 52026 and, in such case, will take effect January 1, 2027, or on the date of
Page 5, Line 6the official declaration of the vote thereon by the governor, whichever is later.
Page 5, Line 7(2) This act applies to conduct occurring on or after the applicable effective date of this act.