Provides relative to pharmacy benefit managers. (8/1/26)

Senate Bill 337 amends Louisiana's insurance code to establish comprehensive regulatory requirements for pharmacy benefit managers. The bill amends R.S. 22:1863 to add new definitions for enrollees, healthcare services, pharmacy benefit management fees, pharmacy benefit management services, providers, and related entities, while modifying the definition of rebates to encompass negotiated price concessions and reasonable estimates of cost reductions. The bill enacts new R.S. 22:1867.1, which establishes affirmative duties owed by pharmacy benefit managers to enrollees, health plans, and providers, including duties of care and good faith and fair dealing with transparency requirements and conflict-of-interest disclosures. The legislation prohibits pharmacy benefit managers from retaining rebates and fees, requiring them to derive income solely from pharmacy benefit management fees that do not exceed the value of services actually performed. The bill also establishes that spread pricing is prohibited, allows the insurance commissioner and contracted health plans to audit pharmacy benefit managers once annually, requires contracts to specify all revenue forms and acknowledge the prohibition on spread pricing, and provides for civil monetary penalties up to one thousand dollars per claim for violations.

The practical impact of this legislation affects multiple stakeholders in Louisiana's healthcare system. Enrollees gain explicit legal protections through the imposition of fiduciary-like duties requiring transparency in formulary design, utilization management, and the grievance and appeals process, along with disclosure of conflicts of interest that may affect their prescription drug coverage decisions. Health plans and health insurance issuers obtain audit rights and contractual transparency regarding pharmacy benefit manager compensation structures, enabling them to identify and prevent spread pricing arrangements where pharmacy benefit managers charge more than they pay to pharmacies. Pharmacy providers and pharmacists benefit from similar transparency and conflict-of-interest disclosures and gain a private right of action to challenge violations of the established duties. Pharmacy benefit managers face significant operational constraints by being prohibited from retaining manufacturer rebates and volume discounts, fundamentally changing their revenue model to depend entirely on transparent service-based fees rather than spread pricing or rebate capture.

This legislation operates within Louisiana's existing insurance regulatory framework established in R.S. 22, which governs health insurance issuers and pharmacy benefit management services. The bill repeals R.S. 22:1868.1 and amends R.S. 44:4.1(B)(11) regarding public records exemptions to protect confidential and proprietary information disclosed during audits. The legislation delegates rule-making authority to the Louisiana Insurance Commissioner to define the scope of duties owed to different parties and to define additional pharmacy benefit management services beyond those enumerated in the statute. The bill takes effect August 1, 2026, and its implementation is limited to the extent permissible under applicable federal law, recognizing potential constraints from federal Employee Retirement Income Security Act preemption or other federal regulatory schemes governing pharmacy benefit management practices.