Provides for prescription drug pricing. (1/1/27) (OR SG EX See Note)

Senate Bill 369 enacts a new section of Louisiana Revised Statutes Title 22 establishing price controls on prescription drugs sold in the state. The legislation creates two primary restrictions: pharmaceutical manufacturers are prohibited from offering drugs to state-sponsored insurance plans, including the Office of Group Benefits, at prices exceeding what Medicare pays for the same drug, and insurers and pharmacy benefit managers are prohibited from reimbursing drugs at amounts below the Medicare price for those same drugs. The statute applies to name brand drugs, biosimilars, and generic drugs without limitation. Enforcement authority is vested in the commissioner, who is granted rulemaking power to implement the statutory requirements. The legislation becomes effective on January 1, 2027.

The practical effect of this legislation impacts multiple constituencies within the pharmaceutical and insurance sectors. Drug manufacturers selling to state-sponsored insurance plans face a price ceiling tied to Medicare rates, potentially reducing their revenue from those contracts or forcing them to decline to participate in Louisiana state plans. Insurers and pharmacy benefit managers face a price floor on reimbursement, preventing them from negotiating prices below the Medicare benchmark and potentially increasing their costs. State employees and retirees covered by the Office of Group Benefits may experience changes in drug availability or plan design as manufacturers and intermediaries adjust their business practices in response to these constraints. The Insurance Commissioner gains additional administrative responsibilities to enforce these restrictions and develop implementing regulations.

This statute operates within Louisiana's insurance regulatory framework under Title 22 of the Revised Statutes, which addresses insurance generally. The reference to the Office of Group Benefits connects the statute to the state employee health insurance program. The legislation's approach of tying drug prices to Medicare rates reflects a policy choice to use federal payment rates as a benchmark for state-level pricing regulation. The constitutionality of price controls on pharmaceuticals in interstate commerce could implicate dormant Commerce Clause concerns, as the restrictions apply to manufacturers offering products in the state regardless of where the manufacture occurs. The statute's interaction with federal Medicare policy and potential conflicts with federal pharmaceutical pricing regulations would likely require careful implementation guidance from the Insurance Commissioner.