Provides relative to pharmacy benefit managers. (gov sig)

Senate Bill 377 enacts Louisiana Revised Statutes 22:1657.1 to establish comprehensive regulation of pharmacy benefit managers while repealing R.S. 22:1856(F) regarding pharmacy claim processing fees. The bill creates a new statutory framework that fundamentally restructures PBM compensation by prohibiting PBMs from retaining rebates and fees negotiated on behalf of insurers and health plans, requiring instead that PBMs derive income exclusively from transparent pharmacy benefit management fees that cannot be contingent upon drug acquisition costs, savings amounts, or patient cost-sharing. The statute defines pharmacy benefit management services to include price negotiation, claims processing, drug utilization review, prior authorization handling, network pharmacy contracting, and related administrative functions. The bill grants the Commissioner of Insurance and contracted insurers or health plans the authority to audit PBMs once annually, with the ability to request detailed claim-level reimbursement data, comparisons between affiliated and unaffiliated pharmacy payments, historical claims data with specific metrics, and aggregate rebate information. PBMs must respond to audit requests within thirty days and certify the accuracy of submitted information under penalty of perjury by their chief executive or financial officer.

This legislation directly impacts pharmacy benefit managers operating in Louisiana, health insurance issuers and their plans that contract with PBMs, network pharmacies, and ultimately patients and employers purchasing health coverage. PBMs will be required to restructure their business models to eliminate spread pricing and rebate retention practices, resulting in fundamentally different compensation arrangements with insurers and health plans. Unaffiliated pharmacies will gain protection through audit provisions that require examination of reimbursement differences between affiliated and unaffiliated providers, potentially improving their competitive position relative to PBM-owned pharmacies. Insurers and health plans gain expanded audit rights and transparency into PBM operations, enabling them to verify compliance with fee structures and detect discriminatory reimbursement practices. The annual certification requirement means PBMs face significant liability for misstatements, as violations trigger civil monetary penalties up to one thousand dollars per claim, creating substantial financial exposure for non-compliance. Individual patients may benefit indirectly through improved transparency that could influence premium pricing and formulary decisions.

Senate Bill 377 operates within Louisiana's existing insurance regulatory framework under Title 22 of the Louisiana Revised Statutes, specifically interacting with R.S. 22:1641 which defines pharmacy benefit managers and R.S. 22:1867 which addresses spread pricing prohibitions. The bill expressly acknowledges federal preemption considerations in subsection F by limiting state regulation only to the extent permissible under applicable law, recognizing that certain aspects of PBM regulation may be constrained by the Employee Retirement Income Security Act of 1974 (ERISA) and other federal statutes. The definitions section cross-references R.S. 40:2863 for the term "health plan" and incorporates federal standards from 42 U.S.C. Section 300gg-91 regarding health insurance coverage, creating linkages between state insurance law and federal health care regulatory structures. The repeal of R.S. 22:1856(F) removes prior authority for health insurers and agents to unilaterally determine pharmacy claim processing fees, transferring regulatory authority and transparency obligations to the state insurance commissioner and requiring negotiated fee structures. The confidentiality provisions in subsection C establish a carve-out from Louisiana's Public Records Law for proprietary and competitive information, creating a protected category of information that audit recipients cannot disclose despite accessing it through regulatory authority.