Provides relative to pharmacy benefit managers (RE +$238,163 SG EX See Note)

House Bill 919 amends Louisiana's pharmacy benefit manager regulations by imposing new reimbursement requirements, ownership restrictions, and fiduciary duties. The bill requires pharmacy benefit managers to reimburse pharmacies for dispensing fees that fall below the state's professional dispensing fee floor of twelve dollars per prescription, calculated as the National Average Drug Acquisition Cost plus the state's professional dispensing fee. Critically, pharmacy benefit managers must bear all costs of these reimbursements without assigning them to health plans, plan members, pharmacies, or pharmacists. The legislation amends R.S. 40:2864 to establish that pharmacy benefit managers owe fiduciary duties of good faith, honesty, trust, confidence, and candor to plan beneficiaries and contracting entities, requiring them to act with the care, skill, prudence, and diligence of a reasonable and prudent person experienced in pharmacy benefit management. Additionally, the bill enacts R.S. 40:2870(A)(21), which prohibits pharmacy benefit managers from operating any pharmacy that the pharmacy benefit manager or its subsidiaries owns or contracts with, closing a structural conflict of interest.

The bill directly impacts pharmacy benefit managers operating in Louisiana and the pharmacies they contract with, providing immediate protections to independent and chain pharmacies against under-reimbursement practices. Health insurance plans and self-insured employers that contract with pharmacy benefit managers may experience increased costs since reimbursement shortfalls cannot be passed through to plans or members. Pharmacy benefit managers with annual revenues exceeding five hundred million dollars face particularly severe consequences for violations, including unlimited liability and potential criminal penalties of up to five years imprisonment or one hundred thousand dollars in fines per violation, payable individually by offending officers, directors, or employees. Smaller pharmacies and pharmacists benefit from the minimum dispensing fee floor and protection against discriminatory reimbursement treatment relative to pharmacy benefit manager-owned entities. The bill also requires pharmacy benefit managers to disclose foreign subsidiaries and all financial arrangements with drug manufacturers in annual transparency reports submitted to the Department of Insurance.

House Bill 919 operates within Louisiana's existing regulatory framework governing pharmacy benefit managers under R.S. 22 and R.S. 40, building upon existing rebate retention restrictions and fee disclosure requirements. The legislation creates new cause of action potential under the Louisiana Unfair Trade Practices Act, allowing the Attorney General to pursue civil investigative demands for violations, though the bill specifies that failure to satisfy fiduciary duties itself does not create an independent cause of action separate from those recognized in state or federal law. The fiduciary duty provision aligns with federal ERISA standards while imposing state-specific obligations, and the ownership prohibition addresses vertical integration concerns that have attracted scrutiny in other states. The bill's retroactive application to calendar year 2025 and prospective application create compliance obligations immediately while also allowing recovery for under-reimbursements that occurred from January through December 2025, with certain provisions taking effect January 1, 2027, allowing time for operational adjustments.