State Policy Options and Pharmacy Benefit Managers (PBMs)

Colleen Becker 3/17/2021

What are Pharmacy Benefit Managers (PBMs) and What is Their Role?

Pharmacy benefit managers (PBMs) are paid third-party administrators of prescription drug coverage for insurers and employers. They provide a wide variety of services including developing and maintaining formularies, processing claims, and negotiating discounts and rebates between payers and manufacturers. PBMs manage plans for millions of Americans who have health insurance from a variety of sponsors including commercial health plans, self-insured employer plans, Medicare Part D plans, state government employee plans, and Medicaid managed care organization (MCO) plans.

Prescription drugs can dramatically improve one’s quality of life, with some therapies being the only thing separating a person from death—but  the price for this innovation can come at a steep price. The Centers for Medicare & Medicaid Services (CMS) reports consumer purchases of prescription drugs totaled $369.7 billion in 2019. Consumers filled over 3.7 billion retail prescriptions in 2019, according to the Kaiser Family Foundation, although the Pharmaceutical Research and Manufacturers of America (PhRMA) estimates that number to be much higher. The majority—approximately three-quarters of prescriptions—are processed by a pharmacy benefit manager (PBM). Historically, state laws focused on the role of other actors in the supply chain, but more attention is now being drawn to the role of PBMs.

Legislators may consider a wide variety of policy options when it comes to pharmacy benefit managers (PBMs). With this new 50-state web resource, you can research and access links to state laws in 12 categories of legislation related to PBMs.

State Actions

Does not include 2021 statutes.

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Longer descriptiont than title        AL AK AZ AR CA CO CT DE FL GA HI ID IL IN IA KS KY LA ME MD MA MI MN MO MS MT NE NV NH NY NJ NM NC ND OH OK OR PA RI SC SD TN TX UT VT VA WA WV WI WY DC AS GU MP PR VI

Click on any state to see state-specific statutes relating to PBM.

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Alabama

Provision 

Statute

Cost-Disclosure/Gag-Clause 

A.C.A. 27-45A-5 

Fiduciary 

 

Maximum Allowable Cost (MAC) or Reimbursement Lists 

 

Network Adequacy 

A.C.A. 27-45-3 

Patient Steering 

A.C.A. 27-45-3 

Pharmacy Auditing Standards/Appeals Process 

A.C.A. 34-23-184 

Pharmacy Reimbursement/Claw Backs 

A.C.A. 27-45A-5 

Registration/Licensure 

A.C.A. 27-45A-4 

Regulatory Agency/Enforcement 

A.C.A. 27-45A-4 

Reporting/Transparency Requirements 

 

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Utilization Management Tools 

 

Alaska

Provision

Statute

Cost-Disclosure/Gag-Clause

AS 08.80.297

Fiduciary

 

Maximum Allowable Cost (MAC) or Reimbursement Lists

AAC 145.400  (Medicaid)

AS 21.27.945

AS 21.27.950

Network Adequacy

AS 21.27.945

AS 21.27.950

Patient Steering

 

Pharmacy Auditing Standards/Appeals Process

AS 21.27.910

AS 21.27.930

AS 21.27.950

Pharmacy Reimbursement/Claw Backs

 

AS 21.27.915

AS 21.27.920

Registration/Licensure

AS 21.27.901

Regulatory Agency/Enforcement

AS 08.80.030

Reporting/Transparency Requirements

AS 21.27.945

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Arizona

Provision

Statute

Cost-Disclosure/Gag-Clause

A.R.S. 44-1752

Fiduciary

 

Maximum Allowable Cost (MAC) or Reimbursement Lists

A.R.S. 20-3331

Network Adequacy

A.R.S. 44-1754

Patient Steering

 

Pharmacy Reimbursement

Clawbacks

A.R.S. 44-1752

Pharmacy Auditing Standards

Appeals Process

A.R.S. 20-3322

Registration/Licensure

 

Regulatory Agency/Enforcement

 

Reporting/Transparency Requirements

 

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Utilization Management Tools

 

Arkansas

Provision

Statute

Cost-Disclosure/Gag-Clause

A.C.A. § 23-92-507

Fiduciary

 

Maximum Allowable Cost (MAC) or Reimbursement Lists

A.C.A. § 17-92-507

Network Adequacy

A.C.A. § 23-92-505

Patient Steering

 

Pharmacy Auditing Standards/Appeals Process

A.C.A. § 17-92-1201

Pharmacy Reimbursement/Claw Backs

A.C.A. § 17-92-507

A.C.A. § 23-92-506

Registration/Licensure

A.C.A. § 23-92-504

Regulatory Agency/Enforcement

A.C.A. § 23-92-508

Reporting/Transparency Requirements

 

Spread Pricing

A.C.A. § 23-92-505

Utilization Management Tools

A.C.A. § 23-99-1114 (Step-Therapy)

California

Provision

Statute

Cost-Disclosure/Gag-Clause

H.S.C. 1385.003

B.P.C. 4441

Fiduciary

H.S.C. 1385.004

Maximum Allowable Cost (MAC) or Reimbursement Lists

B.P.C. 4440

Network Adequacy

 

Patient Steering

 

Pharmacy Reimbursement

Clawbacks

B.P.C. 4438

Pharmacy Auditing Standards

Appeals Process

B.P.C. 4433 - 4438

Registration/Licensure

H.S.C. 1385.0041385.005

Regulatory Agency/Enforcement

B.P.C. 4439

H.S.C. 1385.002

H.S.C. 1385.006

Reporting/Transparency Requirements

B.P.C.44404441

Spread Pricing

 

Utilization Management Tools

 

Colorado

Provision

Statute

Cost-Disclosure/Gag-Clause

C.R.S. 10-16-122.7

Fiduciary

 

Maximum Allowable Cost (MAC) or Reimbursement Lists

C.R.S. 25-37-103.5

Network Adequacy

C.R.S. 10-16-122

C.R.S. 24-51-1202

Patient Steering

 

Pharmacy Reimbursement

Clawbacks

C.R.S. 10-16-122.3

Pharmacy Auditing Standards

Appeals Process

C.R.S. 10-16-122.5

Registration/Licensure

 

Regulatory Agency/Enforcement

 

Reporting/Transparency Requirements

 

Spread Pricing

 

Utilization Management Tools

C.R.S. 10-16-124.5

Connecticut

Provision

Statute

Cost-Disclosure/Gag-Clause

C.G.S. Sec.38a-477cc

Fiduciary

 

Maximum Allowable Cost (MAC) or Reimbursement Lists

 

Network Adequacy

 

Patient Steering

 

Pharmacy Reimbursement

Clawbacks

C.G.S. Sec.38a-477cc

Pharmacy Auditing Standards

Appeals Process

C.G.S. Sec.38a-479iii

Registration/Licensure

C.G.S. Sec.38a-479bbb

Regulatory Agency/Enforcement

C.G.S. Sec.38a-479ccc-hhh

C.G.S. Sec.38a-479ppp

Reporting/Transparency Requirements

C.G.S. Sec.38a-479ppp

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Delaware

Provision

Statute

Cost-Disclosure/Gag-Clause

Del. Laws § 3332A

Fiduciary

 

Maximum Allowable Cost (MAC) or Reimbursement Lists

Del. Laws § 3323A

Network Adequacy

 

Patient Steering

 

Pharmacy Reimbursement

Clawbacks

Del. Laws § 3305A

Pharmacy Auditing Standards

Appeals Process

Del. Laws § 3304A

Registration/Licensure

Del. Laws § 3353A

Regulatory Agency/Enforcement

Del. Laws § 3353A

Del. Laws § 3359A

Reporting/Transparency Requirements

 

Spread Pricing

 

Utilization Management Tools

Del. Laws § 3336A

Del. Laws § 3337A

Florida

Provision

Statute

Cost-Disclosure/Gag-Clause

F.S. 465.0244

Fiduciary

 

Maximum Allowable Cost (MAC) or Reimbursement Lists

F.S. 627.64741

Network Adequacy

 

Patient Steering

 

Pharmacy Reimbursement

Clawbacks

 

Pharmacy Auditing Standards

Appeals Process

F.S. 465.1885

Registration/Licensure

F.S. 624.490

Regulatory Agency/Enforcement

 

Reporting/Transparency Requirements

 

Spread Pricing

 

Utilization Management Tools

F.S. 627.42392

Georgia

Provision

Statute

Cost-Disclosure/Gag-Clause

O.C.G.A. § 33-64-11

Fiduciary

 

Maximum Allowable Cost (MAC) or Reimbursement Lists

O.C.G.A. § 33-64-9

 

Network Adequacy

O.C.G.A. § 33-64-10

Patient Steering

O.C.G.A. § 26-4-119

O.C.G.A. § 33-64-12

Pharmacy Reimbursement

Clawbacks

O.C.G.A. § 33-64-9.1

O.C.G.A. § 33-64-11

Pharmacy Auditing Standards

Appeals Process

O.C.G.A. § 26-4-118

O.C.G.A. § 33-64-5

O.C.G.A. § 33-64-11

Registration/Licensure

O.C.G.A. § 33-64-2

Regulatory Agency/Enforcement

O.C.G.A. § 33-64-7

Reporting/Transparency Requirements

O.C.G.A. § 33-64-10

Spread Pricing

O.C.G.A. § 33-64-10

 

Utilization Management Tools

O.C.G.A. § 33-64-4

O.C.G.A. § 33-64-8

Hawaii

Provision

Statute

Cost-Disclosure/Gag-Clause

 

Fiduciary

 

Maximum Allowable Cost (MAC) or Reimbursement Lists

H.R.S. §328-106

Network Adequacy

H.R.S. §431R-2

H.R.S. §431R-3

Patient Steering

 

Pharmacy Reimbursement

Clawbacks

 

Pharmacy Auditing Standards

Appeals Process

 

Registration/Licensure

H.R.S. §431S-3

 

Regulatory Agency/Enforcement

H.R.S. §431R-5

H.R.S. §431R-4

H.R.S. §431R-7

Reporting/Transparency Requirements

H.R.S. §431R-4

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Utilization Management Tools

 

Idaho

Provision

Statute

Cost-Disclosure/Gag-Clause

Idaho Code § 41-349

Fiduciary

 

Maximum Allowable Cost (MAC) or Reimbursement Lists

Idaho Code § 41-349

 

Network Adequacy

 

Patient Steering

 

Pharmacy Reimbursement

Clawbacks

 

Pharmacy Auditing Standards

Appeals Process

 

Registration/Licensure

Idaho Code § 41-349

Regulatory Agency/Enforcement

 

Reporting/Transparency Requirements

 

Spread Pricing

 

Utilization Management Tools

 

Illinois

Provision

Statute

Cost-Disclosure/Gag-Clause

ILCS 5/513b1

Fiduciary

 

Maximum Allowable Cost (MAC) or Reimbursement Lists

ILCS 5/513b1

 

Network Adequacy

 

Patient Steering

 

Pharmacy Reimbursement

Clawbacks

ILCS 5/513b1

Pharmacy Auditing Standards

Appeals Process

 

Registration/Licensure

ILCS 5/513b2

Regulatory Agency/Enforcement

ILCS 5/513b3

ILCS 5/513b4

Reporting/Transparency Requirements

ILCS 5/513b3

Spread Pricing

 

Utilization Management Tools

 

Indiana

Provision

Statute

Cost-Disclosure/Gag-Clause

IC 10-8-20

Fiduciary

 

Maximum Allowable Cost (MAC) or Reimbursement Lists

IC 27-1-24.5-23

 

Network Adequacy

IC 27-1-24.5-19

Patient Steering

 

Pharmacy Reimbursement

Clawbacks

IC 10-8-20

IC 27-1-24.5-19

IC 27-1-24.5-27.5

Pharmacy Auditing Standards

Appeals Process

IC 27-1-24.5-22

Registration/Licensure

IC 27-1-24.5-18

Regulatory Agency/Enforcement

IC 27-1-24.5-20

IC 27-1-24.5-20

Reporting/Transparency Requirements

IC 27-1-24.5-21

IC 27-1-24.5-22.5

Spread Pricing

IC 27-1-24.5-27.5

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Iowa

Provision

Statute

Cost-Disclosure/Gag-Clause

I.C. §510B.10

Fiduciary

I.C. §510B.4

Maximum Allowable Cost (MAC) or Reimbursement Lists

I.C. §510B.8

 

Network Adequacy

 

Patient Steering

 

Pharmacy Reimbursement

Clawbacks

I.C. §510B.10

Pharmacy Auditing Standards

Appeals Process

I.C. §510B.8

 

Registration/Licensure

I.C. §510B.2

Regulatory Agency/Enforcement

I.C. §510C.2

I.C. §510B.3

Reporting/Transparency Requirements

I.C. §510C.2

Spread Pricing

 

Utilization Management Tools

I.C. §510B.9

Kansas

Provision

Stat

Cost-Disclosure/Gag-Clause

K.S.A. 40-3831

Fiduciary

 

Maximum Allowable Cost (MAC) or Reimbursement Lists

K.S.A. 40-3830

 

Network Adequacy

 

Patient Steering

 

Pharmacy Reimbursement

Clawbacks

K.S.A. 40-3831

 

Pharmacy Auditing Standards

Appeals Process

K.S.A. 40-3830

 

Registration/Licensure

K.S.A. 40-3823

Regulatory Agency/Enforcement

K.S.A. 40-3825

Reporting/Transparency Requirements

 

Spread Pricing

 

Utilization Management Tools

 

Kentucky

Provision

Statute

Cost-Disclosure/Gag-Clause

KRS 304.17A-164

Fiduciary

KRS 205.5512 4(c)(1) (Medicaid)

Maximum Allowable Cost (MAC) or Reimbursement Lists

KRS 304.17A-162

Network Adequacy

KRS 205.5514 4(d) (Medicaid)

Patient Steering

KRS 205.5512 4(c)(4biii, iv, v) (Medicaid)

Pharmacy Reimbursement

Clawbacks

KRS 205.5512 4(c)(4bi, ii)

(Medicaid)

Pharmacy Auditing Standards

Appeals Process

KRS 304.17A-741

KRS 304.17A-743

Registration/Licensure

KRS 304.9-053

Regulatory Agency/Enforcement

KRS 205.5510 (Medicaid)

KRS 205.5518 (3) (Medicaid)

KRS 304.9-054

KRS 304.9-440

Reporting/Transparency Requirements

KRS 205.647 (Medicaid)

Spread Pricing

KRS 205.5512 4(c)(3a)(4a) (Medicaid)

Utilization Management Tools

KRS 304.17A-163

Louisiana

Provision

Statute

Cost-Disclosure/Gag-Clause

RS 22:1657

Fiduciary

RS 40:2870   

Maximum Allowable Cost (MAC) or Reimbursement Lists

RS 40:2870 

 

 

Network Adequacy

RS 39:1648 (Medicaid)

RS 40:2870 

Patient Steering

RS 40:2870 

 

Pharmacy Reimbursement

Clawbacks

RS 40:2870 

Pharmacy Auditing Standards

Appeals Process

RS 40:2870 

Registration/Licensure

RS 22:1657

RS 40:2870 

Regulatory Agency/Enforcement

RS 22:1657.1

RS 22:1657.1

Reporting/Transparency Requirements

RS 22:1657.1

RS 40:1253.2

Spread Pricing

RS 22:1867

RS 39:1648

RS 40:2870 

Utilization Management Tools

RS 40:2870 

Maine

Provision

Statute

Cost-Disclosure/Gag-Clause

M.R.S.A. §4349

Fiduciary

M.R.S.A. §4349

Maximum Allowable Cost (MAC) or Reimbursement Lists

M.R.S.A. §4350

 

Network Adequacy

M.R.S.A. §4349

Patient Steering

 

Pharmacy Reimbursement

Clawbacks

M.R.S.A. §4349

Pharmacy Auditing Standards

Appeals Process

M.R.S.A. §4350-C

Registration/Licensure

M.R.S.A. §4348

Regulatory Agency/Enforcement

M.R.S.A. §4350-C

M.R.S.A. §4350-C

Reporting/Transparency Requirements

M.R.S.A. §4350-C

Spread Pricing

M.R.S.A. §4350-A

 

Utilization Management Tools

 

Maryland

Provision

Statute

Cost-Disclosure/Gag-Clause

M.G.S. §15–1611

Fiduciary

M.G.S. §15–1642

Maximum Allowable Cost (MAC) or Reimbursement Lists

M.G.S. §15–1628.1

 

Network Adequacy

M.G.S. §15–1611.1

Patient Steering

M.G.S. §15–1611.1

Pharmacy Reimbursement

Clawbacks

M.G.S. §15–1612

M.G.S. §15–1629

M.G.S. §15–1631

Pharmacy Auditing Standards

Appeals Process

M.G.S. §15–1628.2

Registration/Licensure

M.G.S. §15–1604

Regulatory Agency/Enforcement

M.G.S. §15–1604

M.G.S. §15–1609

M.G.S. §15–1642

Reporting/Transparency Requirements

M.G.S. §15–1608

M.G.S. §15–1609

M.G.S. §15–1623

M.G.S. §15–1624

Spread Pricing

M.G.S. §15–1623

M.G.S. §15–1628.3

Utilization Management Tools

M.G.S. §15–1633

M.G.S. §15–1634

M.G.S. §15–1635

M.G.S. §15–1636

Massachusetts

Provision

Statute

Cost-Disclosure/Gag-Clause

 

Fiduciary

 

Maximum Allowable Cost (MAC) or Reimbursement Lists

 

Network Adequacy

 

Patient Steering

 

Pharmacy Reimbursement

Clawbacks

 

Pharmacy Auditing Standards

Appeals Process

M.G.L. 1-22-175-226

Registration/Licensure

 

Regulatory Agency/Enforcement

 

Reporting/Transparency Requirements

M.G.L. 1-22-1760-21

Spread Pricing

 

Utilization Management Tools

 

Michigan

Provision

Statute

Cost-Disclosure/Gag-Clause

 

Fiduciary

 

Maximum Allowable Cost (MAC) or Reimbursement Lists

 

Network Adequacy

 

Patient Steering

 

Pharmacy Reimbursement

Clawbacks

 

Pharmacy Auditing Standards

Appeals Process

 

Registration/Licensure

M.C.L. 550.910

Regulatory Agency/Enforcement

M.C.L. 550.950

Reporting/Transparency Requirements

 

Spread Pricing

 

Utilization Management Tools

 

Minnesota

Provision

Statute

Cost-Disclosure/Gag-Clause

M.R.S. 62W.11

M.R.S. 151.214

Fiduciary

 

Maximum Allowable Cost (MAC) or Reimbursement Lists

M.R.S. 62W.08

 

Network Adequacy

M.R.S. 62W.05

Patient Steering

M.R.S. 62W.07

Pharmacy Reimbursement

Clawbacks

M.R.S. 62W.12

M.R.S. 62W.13

Pharmacy Auditing Standards

Appeals Process

M.R.S. 62W.09

Registration/Licensure

M.R.S. 62W.03

Regulatory Agency/Enforcement

M.R.S. 62W.03b

Reporting/Transparency Requirements

M.R.S. 62W.06

Spread Pricing

 

Utilization Management Tools

M.R.S. 62W.075

Mississippi

Provision

Statute

Cost-Disclosure/Gag-Clause

Miss. Code Ann. § 73-21-205

Fiduciary

 

Maximum Allowable Cost (MAC) or Reimbursement Lists

Miss. Code Ann. § 73-21-156

 

Network Adequacy

Miss. Code Ann. § 73-21-161

Patient Steering

Miss. Code Ann. § 73-21-161

Pharmacy Reimbursement

Clawbacks

Miss. Code Ann. § 73-21-155

Pharmacy Auditing Standards

Appeals Process

Miss. Code Ann. § 73-21-183

Registration/Licensure

Miss. Code Ann. § 73-21-157

 

Regulatory Agency/Enforcement

Miss. Code Ann. § 73-21-155

Miss. Code Ann. § 73-21-163

Miss. Code Ann. § 73-21-191

Reporting/Transparency Requirements

Miss. Code Ann. § 73-21-159

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Utilization Management Tools

 

Missouri

Provision

Statute

Cost-Disclosure/Gag-Clause

MO Rev. Stat. 376.387

Fiduciary

 

Maximum Allowable Cost (MAC) or Reimbursement Lists

MO Rev. Stat. 376.388

 

Network Adequacy

 

Patient Steering

 

Pharmacy Reimbursement

Clawbacks

MO Rev. Stat. 376.387

 

Pharmacy Auditing Standards

Appeals Process

MO Rev. Stat. 338.600

 

Registration/Licensure

MO Rev. Stat. 376.393

Regulatory Agency/Enforcement

MO Rev. Stat. 376.387

MO Rev. Stat. 376.393

 

Reporting/Transparency Requirements

 

Spread Pricing

 

Utilization Management Tools

MO Rev. Stat. 376.392

Montana

Provision

Statute

Cost-Disclosure/Gag-Clause

33-22-177

Fiduciary

33-22-174

Maximum Allowable Cost (MAC) or Reimbursement Lists

33-22-171-173

 

Network Adequacy

 

Patient Steering

 

Pharmacy Reimbursement

Clawbacks

33-22-175

33-22-176

Pharmacy Auditing Standards

Appeals Process

 

Registration/Licensure

 

Regulatory Agency/Enforcement

 

Reporting/Transparency Requirements

 

Spread Pricing

33-22-174

Utilization Management Tools

 

Nebraska

Provision

Statute

Cost-Disclosure/Gag-Clause

71-2484

Fiduciary

 

Maximum Allowable Cost (MAC) or Reimbursement Lists

 

Network Adequacy

 

Patient Steering

 

Pharmacy Reimbursement

Clawbacks

 

Pharmacy Auditing Standards

Appeals Process

 

Registration/Licensure

 

Regulatory Agency/Enforcement

 

Reporting/Transparency Requirements

 

Spread Pricing

 

Utilization Management Tools

 

Nevada

Provision

Statute

Cost-Disclosure/Gag-Clause

NRS 638A.179(1)a

Fiduciary

NRS 638A.178

Maximum Allowable Cost (MAC) or Reimbursement Lists

 

Network Adequacy

 

Patient Steering

 

Pharmacy Reimbursement

Clawbacks

NRS 638A.179(1)d

Pharmacy Auditing Standards

Appeals Process

 

Registration/Licensure

 

Regulatory Agency/Enforcement

 

Reporting/Transparency Requirements

 

Spread Pricing

 

Utilization Management Tools

 

New Hampshire

Provision

Statute

Cost-Disclosure/Gag-Clause

402-N:4

Fiduciary

 

Maximum Allowable Cost (MAC) or Reimbursement Lists

402-N:3

Network Adequacy

 

Patient Steering

 

Pharmacy Reimbursement

Clawbacks

402-N:4

Pharmacy Auditing Standards

Appeals Process

 

Registration/Licensure

402-N:2

Regulatory Agency/Enforcement

402-N:2

402-N:7

402-N:5

402-N:2

Reporting/Transparency Requirements

402-N:6

Spread Pricing

 

Utilization Management Tools

 

New Jersey

Provision

Statute

Cost-Disclosure/Gag-Clause

17B:27F-6(1)b

Fiduciary

 

Maximum Allowable Cost (MAC) or Reimbursement Lists

17B:27F-2

17B:27F-3

Network Adequacy

17B:26-2.1i

Patient Steering

 

Pharmacy Reimbursement

Clawbacks

17B-27F-6(1)a

17B:27F-7                             

Pharmacy Auditing Standards

Appeals Process

17B:27F-4

Registration/Licensure

17B:27B-2

Regulatory Agency/Enforcement

17B:27F-5

Reporting/Transparency Requirements

 

Spread Pricing

 

Utilization Management Tools

 

New Mexico

Provision

Statute

Cost-Disclosure/Gag-Clause

59A-61-5E(3)(b)

Fiduciary

 

Maximum Allowable Cost (MAC) or Reimbursement Lists

59A-61-4

Network Adequacy

59A-61-5(H)

Patient Steering

 

Pharmacy Reimbursement

Clawbacks

59A-61-4(B)

59A-61-7

Pharmacy Auditing Standards

Appeals Process

59A-61-4(D)(4)

Registration/Licensure

59A-61-3

Regulatory Agency/Enforcement

59A-61-3

Reporting/Transparency Requirements

 

Spread Pricing

 

Utilization Management Tools

59A-22B-4

59A-22B-5

59A-22-53.1

New York

Provision

Statute

Cost-Disclosure/Gag-Clause

§ 280-A (3)

Fiduciary

 

Maximum Allowable Cost (MAC) or Reimbursement Lists

§ 280-A (2)

Network Adequacy

 

Patient Steering

 

Pharmacy Reimbursement

Clawbacks

 

Pharmacy Auditing Standards

Appeals Process

§ 280-A (2)

§ 280-C

Registration/Licensure

 

Regulatory Agency/Enforcement

 

Reporting/Transparency Requirements

 

Spread Pricing

§§ 280-A (3)(b)

Utilization Management Tools

§ 3242

North Carolina

Provision

Statute

Cost-Disclosure/Gag-Clause

§ 58-56A-3

Fiduciary

 

Maximum Allowable Cost (MAC) or Reimbursement Lists

§ 58-56A-5

Network Adequacy

§ 58-51-37

Patient Steering

 

Pharmacy Reimbursement

Clawbacks

§ 58-56A-4

Pharmacy Auditing Standards

Appeals Process

§ 90-85.50

Registration/Licensure

 

Regulatory Agency/Enforcement

§ 58-56A-10

Reporting/Transparency Requirements

 

Spread Pricing

§ 58-56A-3(b)

Utilization Management Tools

§ 58-3-221

North Dakota

Provision

Statute

Cost-Disclosure/Gag-Clause

19-02.1-16.1(7)

Fiduciary

 

Maximum Allowable Cost (MAC) or Reimbursement Lists

19-02.1-14.2

Network Adequacy

 

Patient Steering

19-02.1-16.2

Pharmacy Reimbursement

Clawbacks

19-02.1-16.1

Pharmacy Auditing Standards

Appeals Process

19-03.6-02

19-03.6-03

Registration/Licensure

26.1-27.1-02

Regulatory Agency/Enforcement

26.1-27.1-07

Reporting/Transparency Requirements

26.1-27.1-03

Spread Pricing

 

Utilization Management Tools

19-02.1-16.3

Ohio

Provision

Statute

Cost-Disclosure/Gag-Clause

3959.20

Fiduciary

 

Maximum Allowable Cost (MAC) or Reimbursement Lists

3959.111

Network Adequacy

 

Patient Steering

 

Pharmacy Reimbursement

Clawbacks

3959.20

Pharmacy Auditing Standards

Appeals Process

5167.245 (Medicaid)

3901.811

3901.814

Registration/Licensure

3959.05

Regulatory Agency/Enforcement

3959.04

3959.05

3959.99

5167.244 (Medicaid)

Reporting/Transparency Requirements

5167.243 (Medicaid)

Spread Pricing

Medicaid regulatory change, not legislation

Utilization Management Tools

3923.014

Oklahoma

Provision

Statute

Cost-Disclosure/Gag-Clause

36 O.S. § 6962(C)(1)

59 O.S. 359

Fiduciary

36 O.S. §1445

Maximum Allowable Cost (MAC) or Reimbursement Lists

59 O.S. §360

Network Adequacy

36 O.S. §6961

36 O.S. § 6963(B)(4)(C)

Patient Steering

 

Pharmacy Reimbursement

Clawbacks

36 O.S. § 6962(B)(3)

 

Pharmacy Auditing Standards

Appeals Process

59 O.S. §§ 356.1-.356.5

Registration/Licensure

59 O.S. §358

Regulatory Agency/Enforcement

36 O.S. § 6965

36 O.S. § 6966

59 O.S. §358

Reporting/Transparency Requirements

 

Spread Pricing

 

Utilization Management Tools

 

Oregon

Provision

Statute

Cost-Disclosure/Gag-Clause

735.536(2)(f)

Fiduciary

 

Maximum Allowable Cost (MAC) or Reimbursement Lists

735.534

Network Adequacy

735.534(2)

Patient Steering

 

Pharmacy Reimbursement

Clawbacks

 

Pharmacy Auditing Standards

Appeals Process

735.534(4)

735.542

 

Registration/Licensure

735.532

Regulatory Agency/Enforcement

735.532

735.533-735.552

Reporting/Transparency Requirements

 

Spread Pricing

 

Utilization Management Tools

 

Pennsylvania

Provision

Statute

Cost-Disclosure/Gag-Clause

2020 Act 67

Fiduciary

 

Maximum Allowable Cost (MAC) or Reimbursement Lists

2016 Act 169 Ch. 7

Network Adequacy

 

Patient Steering

2020 Act 120 § 449 (2g)

Pharmacy Reimbursement

Clawbacks

 

Pharmacy Auditing Standards

Appeals Process

2016 Act 169 Ch. 3

Registration/Licensure

2016 Act 169 Ch.5

Regulatory Agency/Enforcement

2016 Act 169 Ch.9

Reporting/Transparency Requirements

2020 Act 120 § 449

Spread Pricing

2020 Act 120

Utilization Management Tools

 

Rhode Island

Provision

Statute

Cost-Disclosure/Gag-Clause

 

Fiduciary

§ 27-20.7-8

Maximum Allowable Cost (MAC) or Reimbursement Lists

 

Network Adequacy

§ 27-29.1-3

Patient Steering

 

Pharmacy Reimbursement

Clawbacks

 

Pharmacy Auditing Standards

Appeals Process

§ 5-19.1-35

Registration/Licensure

§ 27-20.7-12

Regulatory Agency/Enforcement

§ 27-29.1-8

Reporting/Transparency Requirements

§ 27-20.7-14

Spread Pricing

 

Utilization Management Tools

 

South Carolina

Provision

Statute

Cost-Disclosure/Gag-Clause

§ 38-71-2150

§ 38-71-2220

Fiduciary

 

Maximum Allowable Cost (MAC) or Reimbursement Lists

§ 38-71-2120

§ 38-71-2130

§ 38-71-2240

Network Adequacy

§ 38-71-147

§ 38-71-2150(2)

§ 38-71-2230(E)

Patient Steering

 

Pharmacy Reimbursement

Clawbacks

§ 38-71-2150(3)

§ 38-71-2230

 

Pharmacy Auditing Standards

Appeals Process

§ 38-71-1810

§ 38-71-1820

§ 38-71-2140

Registration/Licensure

§ 38-71-2210

Regulatory Agency/Enforcement

§ 38-71-2210

§ 38-71-2250

Reporting/Transparency Requirements

 

Spread Pricing

 

Utilization Management Tools

 

South Dakota

Provision

Statute

Cost-Disclosure/Gag-Clause

58-29E-8.1

58-33-135

 

Fiduciary

58-29E-3

Maximum Allowable Cost (MAC) or Reimbursement Lists

 

Network Adequacy

 

Patient Steering

 

Pharmacy Reimbursement

Clawbacks

58-29E-12

58-29E-13

Pharmacy Auditing Standards

Appeals Process

 

Registration/Licensure

58-29E-2

Regulatory Agency/Enforcement

58-29E-9

Reporting/Transparency Requirements

58-29E-4

Spread Pricing

58-29E-12

Utilization Management Tools

 

Tennessee

Provision

Statute

Cost-Disclosure/Gag-Clause

§ 56-7-3114

§ 56-7-3203

Fiduciary

 

Maximum Allowable Cost (MAC) or Reimbursement Lists

§ 56-7-3106

§ 56-7-3107

§ 56-7-3108

Network Adequacy

 

Patient Steering

 

Pharmacy Reimbursement

Clawbacks

§ 56-7-3104

§ 56-7-3112

Pharmacy Auditing Standards

Appeals Process

§ 56-7-3103

Registration/Licensure

§ 56-7-3113

 

Regulatory Agency/Enforcement

§ 56-7-3113

Reporting/Transparency Requirements

§ 4-3-1021

Spread Pricing

 

Utilization Management Tools

 

Texas

Provision

Statute

Cost-Disclosure/Gag-Clause

 

Fiduciary

 

Maximum Allowable Cost (MAC) or Reimbursement Lists

Sec. 1369.351-358

Network Adequacy

 

Patient Steering

 

Pharmacy Reimbursement

Clawbacks

Sec. 1369.105

Sec. 1369.259

Sec. 1369.266

Pharmacy Auditing Standards

Appeals Process

Sec. 1369.251

Sec. 1369.254 -2581

Registration/Licensure

 

Regulatory Agency/Enforcement

Sec. 1369.109

Reporting/Transparency Requirements

Sec. 1369.502

Spread Pricing

 

Utilization Management Tools

Sec. 1369.0541

Sec. 1369.0545

Sec. 1369.0546

Utah

Provision

Statute

Cost-Disclosure/Gag-Clause

31A-46-302 4(a)

Fiduciary

 

Maximum Allowable Cost (MAC) or Reimbursement Lists

31A-46-303

 

Network Adequacy

31A-46-306

Patient Steering

 

Pharmacy Reimbursement

Clawbacks

31A-46-304

31A-46-305

34A-46-309

Pharmacy Auditing Standards

Appeals Process

 

Registration/Licensure

31A-46-201

Regulatory Agency/Enforcement

31A-46-202

31A-2-308

Reporting/Transparency Requirements

31A-46-301

31A-46-307

Spread Pricing

 

Utilization Management Tools

 

Vermont

Provision

Statute

Cost-Disclosure/Gag-Clause

18 V.S.A. § 9473 (b4, b5)

Fiduciary

18 V.S.A. § 9472

Maximum Allowable Cost (MAC) or Reimbursement Lists

18 V.S.A. § 9473 (c)

Network Adequacy

8 V.S.A. § 4089j

Patient Steering

 

Pharmacy Reimbursement

Clawbacks

18 V.S.A. § 9473

Pharmacy Auditing Standards

Appeals Process

18 V.S.A. § 3802

Registration/Licensure

18 V.S.A. § 9421 (a)

Regulatory Agency/Enforcement

18 V.S.A. § 9421 (a)

18 V.S.A. § 9421 (e)

18 V.S.A. § 9474

Reporting/Transparency Requirements

18 V.S.A. § 9472

Spread Pricing

18 V.S.A. § 9421 (b)

18 V.S.A. § 9472

Utilization Management Tools

 

Virginia

Provision

Statute

Cost-Disclosure/Gag-Clause

 § 38.2-3407.15:4

Fiduciary

 

Maximum Allowable Cost (MAC) or Reimbursement Lists

§ 38.2-3407.15:3

Network Adequacy

§ 38.2-3407.7

§ 38.2-3467(C)

Patient Steering

 

Pharmacy Reimbursement

Clawbacks

§ 38.2-3467(A)(3)

Pharmacy Auditing Standards

Appeals Process

§ 38.2-3407.15:1

Registration/Licensure

§ 38.2-3466

Regulatory Agency/Enforcement

§ 38.2-3466

§ 38.2-3469

Reporting/Transparency Requirements

§ 38.2-3468

Spread Pricing

§ 38.2-3467(D)

Utilization Management Tools

§ 38.2-3407.9:05

§ 38.2-3407.15:2

Washington

Provision

Statute

Cost-Disclosure/Gag-Clause

 

Fiduciary

 

Maximum Allowable Cost (MAC) or Reimbursement Lists

RCW 19.340.100

(Effective Jan.1 2022)

RCW 48.200.280

Network Adequacy

 

Patient Steering

 

Pharmacy Reimbursement

Clawbacks

RCW 19.340.100 (H)-(l)

Pharmacy Auditing Standards

Appeals Process

RCW 19.340.040

RCW 19.340.050

RCW 19.340.060

RCW 19.340.070

RCW 19.340.080

(Effective Jan.1 2022)

RCW 48.200.220

RCW 48.200.230

RCW 48.200.240

RCW 48.200.250

RCW 48.200.260

Registration/Licensure

RCW 19.340.030

(Effective Jan.1 2022)

RCW 48.200.030

Regulatory Agency/Enforcement

RCW 48.200.030

RCW 48.200.900

RCW 19.340.110

(Effective Jan.1 2022)

RCW 48.200.050

RCW 48.200.290

Reporting/Transparency Requirements

RCW 43.71C.030

Spread Pricing

 

Utilization Management Tools

 

West Virginia

Provision

Statute

Cost-Disclosure/Gag-Clause

§33-51-9(a)

Fiduciary

 

Maximum Allowable Cost (MAC) or Reimbursement Lists

 

Network Adequacy

§33-51-8(d)

Patient Steering

 

Pharmacy Reimbursement

Clawbacks

§5-16-7G(i)

This law is specific to cost-sharing requirements for insulin.

§33-51(9b)

Pharmacy Auditing Standards

Appeals Process

 §33-51-4

§33-51-5

§33-51-6

Registration/Licensure

 §33-51-7

§33-51-8 (c)

Regulatory Agency/Enforcement

§33-51-8(a)

§33-51-8(e)

§33-51-10

Reporting/Transparency Requirements

§5-16-9(i)

Spread Pricing

 

Utilization Management Tools

 

Wisconsin

Provision

Statute

Cost-Disclosure/Gag-Clause

 

Fiduciary

 

Maximum Allowable Cost (MAC) or Reimbursement Lists

632.865

Network Adequacy

632.86

Patient Steering

 

Pharmacy Reimbursement

Clawbacks

 

Pharmacy Auditing Standards

Appeals Process

 

Registration/Licensure

 

Regulatory Agency/Enforcement

 

Reporting/Transparency Requirements

 

Spread Pricing

 

Utilization Management Tools

632.853

632.866

Wyoming

Provision

Statute

Cost-Disclosure/Gag-Clause

26-52-104(j)

Fiduciary

 

Maximum Allowable Cost (MAC) or Reimbursement Lists

26-52-104

Network Adequacy

 

Patient Steering

 

Pharmacy Reimbursement

Clawbacks

 

Pharmacy Auditing Standards

Appeals Process

26-52-103

Registration/Licensure

26-52-101

Regulatory Agency/Enforcement

26-52-101

Reporting/Transparency Requirements

 

Spread Pricing

 

Utilization Management Tools

 

District of Columbia

Provision

Statute

Cost-Disclosure/Gag-Clause

§ 48–832.01

Fiduciary

§ 48–832.01

Maximum Allowable Cost (MAC) or Reimbursement Lists

 

Network Adequacy

 

Patient Steering

 

Pharmacy Reimbursement

Clawbacks

§ 48–832.01

Pharmacy Auditing Standards

Appeals Process

 

Registration/Licensure

 

Regulatory Agency/Enforcement

§ 48–832.03

Reporting/Transparency Requirements

 

Spread Pricing

§ 48–832.01

Utilization Management Tools

 

Puerto Rico

Provision

Statute

Cost-Disclosure/Gag-Clause

 

Fiduciary

 

Maximum Allowable Cost (MAC) or Reimbursement Lists

P.R. Laws tit. 26, § 9046

Network Adequacy

 

Patient Steering

 

Pharmacy Reimbursement

Clawbacks

P.R. Laws tit. 26, § 9051

Pharmacy Auditing Standards

Appeals Process

 

Registration/Licensure

 

Regulatory Agency/Enforcement

 

Reporting/Transparency Requirements

P.R. Laws tit. 26, § 9046

Spread Pricing

 

Utilization Management Tools

 

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Glossary

Glossary of terms commonly found in PBM state legislation and statutes which are reflected in the map.

Cost-Disclosure/Gag-clause

Contracts between a pharmacy and a pharmacy benefit manager (PBM) are a common feature in the prescription drug distribution and sales chain. The terms of these arrangements are often proprietary and unknown to consumers and some purchasers, like employers. The terms can include a “gag clause,”  which restricts pharmacists from informing consumers of lower cost options, such as if a consumer purchases a prescription out of pocket rather than using the drug benefit through their insurance plan. Over two-thirds of states have laws that addresses this issue.

Fiduciary

A fiduciary is a person or entity who holds a legal or ethical responsibility to act in the best interests of their clients. A PBM’s clients typically are health plans whose primary stakeholders are plan enrollees. While some states impose fiduciary responsibilities on PBMs, others require PBMs to exercise good faith and fair dealing while performing their contractual duties. More than a quarter of states have this type of legislation in place.

Maximum Allowable Cost (MAC) or Reimbursement Lists

Pharmacy benefit managers may choose to establish an upper limit or maximum amount they will reimburse a pharmacy for generic and multi-source drugs. PBMs develop maximum allowable costs (MAC) lists using a variety of data, resources and information, and these lists may consist of thousands of products. A state may choose to regulate the frequency MAC lists are updated, such as every seven days. Another common approach is providing for an appeals process when a pharmacy disputes an amount it was reimbursed. Only a handful of states have not enacted legislation in this area.

Network Adequacy

A pharmacy network is a list of pharmacies or pharmacists that a health plan or PBM has contracted with to provide prescription drug services to their members. Pharmacy network adequacy is often defined as the distance between a patient’s residence and where services can be physically accessed. Existing state laws generally set adequacy and eligibility standards for network participation.

Patient Steering

Some PBMs require contracted health plan enrollees to visit affiliated pharmacies, or pharmacies in which they have an ownership interest including retail, mail-order or specialty.  Four states—Georgia, Louisiana, Minnesota and Utah—have passed legislation specifically banning this practice.

Pharmacy Auditing Standards/Appeals Process

Audits on pharmacies by PBMs to detect fraud, waste and abuse are routine; however, some states have implemented laws to ensure pharmacies are audited fairly and are given a process for appeal. Over two-thirds of states have enacted some form of a fair pharmacy audit bill which provides guidelines on when and how pharmacy audits are conducted by PBMs.

Pharmacy Reimbursement/Claw Backs

In addition to maximum allowable cost (MAC) laws, state laws may provide reimbursement standards for pharmacies with which the PBM contracts. For example, a state might prohibit a PBM from denying or reducing the amount they reimburse to a pharmacy or pharmacist for a claim.

Clawbacks occur when a health plan enrollee’s copayment exceeds the total cost of the drug to their insurer, and the PBM “claws back” some, or all, of the overpayment from the pharmacy. Some states have chosen to prohibit these types of retroactive payments and at least 22 states have enacted some form of clawback legislation.

Registration/Licensure

States may require PBMs to register or obtain licensure to conduct business, often through the state department of insurance or board of pharmacy. At least thirty states have this type of law.

Regulatory Agency/Enforcement

Many of the same states that require PBM registration or licensure authorize a specific agency to promulgate rules and regulations. Maine has approached the issue uniquely by requiring insurers that contract with PBMs to monitor the PBM's activities.

Most states that opt to give regulatory oversight of PBM business practices to a specific state agency also give that agency the authority to establish and assess fines, impose civil penalties, and suspend or revoke a license of a PBM that is found to be noncompliant.

Reporting/Transparency Requirements

Some states have implemented laws that require PBMs to disclose certain pricing and cost information such as data on rebates, payments and fees collected from drug manufacturers, insurers, and pharmacies.

Spread Pricing

Health plans choose contracts with PBMs that commonly use either a spread pricing reimbursement model or pass-through pricing model. In a spread pricing model, the PBM keeps a portion of the amount, or spread, between what the health plan pays the PBM and the amount that the PBM reimburses the pharmacy for a beneficiary’s prescription. With a pass-through contract, the PBM passes through the amount charged by the pharmacy to the health insurer. Since no spread is collected, PBMs typically charge an administrative fee. More than a dozen states bar the use of spread pricing models in PBM and health plan contracts.

Utilization Management Tools (e.g. mid-year or non-medical switching, step therapy, and prior authorization)

Utilization management tools are used by payers to manage the use and mix of drugs covered under the benefit. A provider might be required to gain prior authorization or approval for a specific treatment before it can be administered. Step therapy, also called “fail first,” is when a patient is required to try certain treatments or prescription drugs before switching to a more expensive or non-generic alternative. Non-medical switching occurs when a patient who is stable on one medicine is switched to another for reasons other than clinical purposes. More than half of states have laws that address utilization management policies. 

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