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

Senate Bill 372 amends Louisiana Revised Statutes section 22:1870(D)(1) to expand the regulatory authority of the Commissioner of Insurance over pharmacy benefit managers. The bill retains existing requirements that pharmacy benefit managers submit annual transparency reports to the commissioner and that the commissioner may examine their books and records to verify report accuracy. The legislative change adds new authority permitting the commissioner to examine the books and records of any entity within a pharmacy benefit manager's corporate vertical integration structure, with the statute explicitly listing insurers, group purchasing organizations, manufacturers, wholesale distributors, special or mail order pharmacies, retail or long-term care pharmacies, and providers as examples of entities subject to examination.

The practical effect of this legislation extends regulatory scrutiny beyond individual pharmacy benefit managers to their affiliated corporate entities. Pharmacy benefit managers that operate vertically integrated structures encompassing insurance operations, drug distribution channels, or pharmacy services will now be subject to commissioner examination across all those affiliated components. This enables the commissioner to identify potential conflicts of interest, profit margins, and cost-shifting practices that may occur within corporate family structures where a single entity controls multiple functions in the pharmaceutical supply chain. Insurers, wholesalers, mail-order pharmacies, and retail pharmacies affiliated with a PBM will need to maintain records accessible for commissioner inspection and must cooperate with inquiries into their financial relationships with affiliated entities.

Senate Bill 372 operates within the existing statutory framework governing pharmacy benefit manager transparency established in R.S. 22:1870. The amendment enhances the commissioner's examination powers that were already present in subsection (D)(1)(a) but clarifies and expands the scope to encompassing affiliated entities in vertical structures. This aligns with Louisiana's insurance regulatory scheme where the commissioner possesses broad authority to examine insurance-related entities and their records. The provision addresses potential regulatory gaps where PBMs could previously argue that affiliated but technically separate entities fell outside the commissioner's direct examination authority, and the statute now explicitly establishes that corporate vertical integration structures do not shield subsidiary or affiliated entities from regulatory review.