INS-PHARMACY BENEFIT MANAGERS

Illinois General Assembly - Full Text of HB1018

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104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
HB1018

Introduced 1/9/2025, by Rep. John M. Cabello

SYNOPSIS AS INTRODUCED:

215 ILCS 5/513b1

Amends the Illinois Insurance Code. Provides that a pharmacy benefit
manager or an affiliate acting on the pharmacy benefit manager's behalf is
prohibited from steering a covered individual. Defines "steer". Effective
July 1, 2025.
LRB104 03422 BAB 13444 b

A BILL FOR

HB1018
LRB104 03422 BAB 13444 b
1

AN ACT concerning regulation.

2

Be it enacted by the People of the State of Illinois,
3
represented in the General Assembly:

4

Section 5.
The Illinois Insurance Code is amended by
5
changing Section 513b1 as follows:

6

(215 ILCS 5/513b1)
7

Sec. 513b1.
Pharmacy benefit manager contracts.
8

(a) As used in this Section:
9

"340B drug discount program" means the program established
10
under Section 340B of the federal Public Health Service Act,
11
42 U.S.C. 256b.
12

"340B entity" means a covered entity as defined in 42
13
U.S.C. 256b(a)(4) authorized to participate in the 340B drug
14
discount program.
15

"340B pharmacy" means any pharmacy used to dispense 340B
16
drugs for a covered entity, whether entity-owned or external.
17

"Biological product" has the meaning ascribed to that term
18
in Section 19.5 of the Pharmacy Practice Act.
19

"Maximum allowable cost" means the maximum amount that a
20
pharmacy benefit manager will reimburse a pharmacy for the
21
cost of a drug.
22

"Maximum allowable cost list" means a list of drugs for
23
which a maximum allowable cost has been established by a

HB1018
- 2 -
LRB104 03422 BAB 13444 b
1
pharmacy benefit manager.
2

"Pharmacy benefit manager" means a person, business, or
3
entity, including a wholly or partially owned or controlled
4
subsidiary of a pharmacy benefit manager, that provides claims
5
processing services or other prescription drug or device
6
services, or both, for health benefit plans.
7

"Retail price" means the price an individual without
8
prescription drug coverage would pay at a retail pharmacy, not
9
including a pharmacist dispensing fee.
10

"Steer" includes, but is not limited to:
11

(1) requiring a covered individual to use only a
12

pharmacy, including a mail-order pharmacy, in which the
13

pharmacy benefit manager maintains an ownership interest
14

or control;
15

(2) offering or implementing a plan design that
16

encourages a covered individual to use a pharmacy in which
17

the pharmacy benefit manager maintains an ownership
18

interest or control, if such plan design increases costs
19

for the covered individual, including requiring a covered
20

individual to pay full costs for a prescription if the
21

covered individual chooses not to use a pharmacy owned or
22

controlled by the pharmacy benefit manager;
23

(3) reimbursing a pharmacy or pharmacist for a
24

pharmaceutical product or pharmacist service in an amount
25

less than the amount that the pharmacy benefit manager
26

reimburses itself or an affiliate for providing the same

HB1018
- 3 -
LRB104 03422 BAB 13444 b
1

product or services, unless the pharmacy or pharmacist
2

contractually agrees to a lower reimbursement amount; or
3

(4) any other actions determined by the Department by
4

rule.

5

"Third-party payer" means any entity that pays for
6
prescription drugs on behalf of a patient other than a health
7
care provider or sponsor of a plan subject to regulation under
8
Medicare Part D, 42 U.S.C. 1395w-101 et seq.
9

(b) A contract between a health insurer and a pharmacy
10
benefit manager must require that the pharmacy benefit
11
manager:
12

(1) Update maximum allowable cost pricing information
13

at least every 7 calendar days.
14

(2) Maintain a process that will, in a timely manner,
15

eliminate drugs from maximum allowable cost lists or
16

modify drug prices to remain consistent with changes in
17

pricing data used in formulating maximum allowable cost
18

prices and product availability.
19

(3) Provide access to its maximum allowable cost list
20

to each pharmacy or pharmacy services administrative
21

organization subject to the maximum allowable cost list.
22

Access may include a real-time pharmacy website portal to
23

be able to view the maximum allowable cost list. As used in
24

this Section, "pharmacy services administrative
25

organization" means an entity operating within the State
26

that contracts with independent pharmacies to conduct

HB1018
- 4 -
LRB104 03422 BAB 13444 b
1

business on their behalf with third-party payers. A
2

pharmacy services administrative organization may provide
3

administrative services to pharmacies and negotiate and
4

enter into contracts with third-party payers or pharmacy
5

benefit managers on behalf of pharmacies.
6

(4) Provide a process by which a contracted pharmacy
7

can appeal the provider's reimbursement for a drug subject
8

to maximum allowable cost pricing. The appeals process
9

must, at a minimum, include the following:
10

(A) A requirement that a contracted pharmacy has
11

14 calendar days after the applicable fill date to
12

appeal a maximum allowable cost if the reimbursement
13

for the drug is less than the net amount that the
14

network provider paid to the supplier of the drug.
15

(B) A requirement that a pharmacy benefit manager
16

must respond to a challenge within 14 calendar days of
17

the contracted pharmacy making the claim for which the
18

appeal has been submitted.
19

(C) A telephone number and e-mail address or
20

website to network providers, at which the provider
21

can contact the pharmacy benefit manager to process
22

and submit an appeal.
23

(D) A requirement that, if an appeal is denied,
24

the pharmacy benefit manager must provide the reason
25

for the denial and the name and the national drug code
26

number from national or regional wholesalers.

HB1018
- 5 -
LRB104 03422 BAB 13444 b
1

(E) A requirement that, if an appeal is sustained,
2

the pharmacy benefit manager must make an adjustment
3

in the drug price effective the date the challenge is
4

resolved and make the adjustment applicable to all
5

similarly situated network pharmacy providers, as
6

determined by the managed care organization or
7

pharmacy benefit manager.
8

(5) Allow a plan sponsor contracting with a pharmacy
9

benefit manager an annual right to audit compliance with
10

the terms of the contract by the pharmacy benefit manager,
11

including, but not limited to, full disclosure of any and
12

all rebate amounts secured, whether product specific or
13

generalized rebates, that were provided to the pharmacy
14

benefit manager by a pharmaceutical manufacturer.
15

(6) Allow a plan sponsor contracting with a pharmacy
16

benefit manager to request that the pharmacy benefit
17

manager disclose the actual amounts paid by the pharmacy
18

benefit manager to the pharmacy.
19

(7) Provide notice to the party contracting with the
20

pharmacy benefit manager of any consideration that the
21

pharmacy benefit manager receives from the manufacturer
22

for dispense as written prescriptions once a generic or
23

biologically similar product becomes available.
24

(c) In order to place a particular prescription drug on a
25
maximum allowable cost list, the pharmacy benefit manager
26
must, at a minimum, ensure that:

HB1018
- 6 -
LRB104 03422 BAB 13444 b
1

(1) if the drug is a generically equivalent drug, it
2

is listed as therapeutically equivalent and
3

pharmaceutically equivalent "A" or "B" rated in the United
4

States Food and Drug Administration's most recent version
5

of the "Orange Book" or have an NR or NA rating by
6

Medi-Span, Gold Standard, or a similar rating by a
7

nationally recognized reference;
8

(2) the drug is available for purchase by each
9

pharmacy in the State from national or regional
10

wholesalers operating in Illinois; and
11

(3) the drug is not obsolete.
12

(d) A pharmacy benefit manager is prohibited from limiting
13
a pharmacist's ability to disclose whether the cost-sharing
14
obligation exceeds the retail price for a covered prescription
15
drug, and the availability of a more affordable alternative
16
drug, if one is available in accordance with Section 42 of the
17
Pharmacy Practice Act.
18

(e) A health insurer or pharmacy benefit manager shall not
19
require an insured to make a payment for a prescription drug at
20
the point of sale in an amount that exceeds the lesser of:
21

(1) the applicable cost-sharing amount; or
22

(2) the retail price of the drug in the absence of
23

prescription drug coverage.
24

(f) Unless required by law, a contract between a pharmacy
25
benefit manager or third-party payer and a 340B entity or 340B
26
pharmacy shall not contain any provision that:

HB1018
- 7 -
LRB104 03422 BAB 13444 b
1

(1) distinguishes between drugs purchased through the
2

340B drug discount program and other drugs when
3

determining reimbursement or reimbursement methodologies,
4

or contains otherwise less favorable payment terms or
5

reimbursement methodologies for 340B entities or 340B
6

pharmacies when compared to similarly situated non-340B
7

entities;
8

(2) imposes any fee, chargeback, or rate adjustment
9

that is not similarly imposed on similarly situated
10

pharmacies that are not 340B entities or 340B pharmacies;
11

(3) imposes any fee, chargeback, or rate adjustment
12

that exceeds the fee, chargeback, or rate adjustment that
13

is not similarly imposed on similarly situated pharmacies
14

that are not 340B entities or 340B pharmacies;
15

(4) prevents or interferes with an individual's choice
16

to receive a covered prescription drug from a 340B entity
17

or 340B pharmacy through any legally permissible means,
18

except that nothing in this paragraph shall prohibit the
19

establishment of differing copayments or other
20

cost-sharing amounts within the benefit plan for covered
21

persons who acquire covered prescription drugs from a
22

nonpreferred or nonparticipating provider;
23

(5) excludes a 340B entity or 340B pharmacy from a
24

pharmacy network on any basis that includes consideration
25

of whether the 340B entity or 340B pharmacy participates
26

in the 340B drug discount program;

HB1018
- 8 -
LRB104 03422 BAB 13444 b
1

(6) prevents a 340B entity or 340B pharmacy from using
2

a drug purchased under the 340B drug discount program; or
3

(7) any other provision that discriminates against a
4

340B entity or 340B pharmacy by treating the 340B entity
5

or 340B pharmacy differently than non-340B entities or
6

non-340B pharmacies for any reason relating to the
7

entity's participation in the 340B drug discount program.
8

As used in this subsection, "pharmacy benefit manager" and
9
"third-party payer" do not include pharmacy benefit managers
10
and third-party payers acting on behalf of a Medicaid program.
11

(f-5) A pharmacy benefit manager or an affiliate acting on
12
the pharmacy benefit manager's behalf shall not steer a
13
covered individual.
14

(g) A violation of this Section by a pharmacy benefit
15
manager constitutes an unfair or deceptive act or practice in
16
the business of insurance under Section 424.
17

(h) A provision that violates subsection (f) in a contract
18
between a pharmacy benefit manager or a third-party payer and
19
a 340B entity that is entered into, amended, or renewed after
20
July 1, 2022 shall be void and unenforceable.
21

(i)(1) A pharmacy benefit manager may not retaliate
22
against a pharmacist or pharmacy for disclosing information in
23
a court, in an administrative hearing, before a legislative
24
commission or committee, or in any other proceeding, if the
25
pharmacist or pharmacy has reasonable cause to believe that
26
the disclosed information is evidence of a violation of a

HB1018
- 9 -
LRB104 03422 BAB 13444 b
1
State or federal law, rule, or regulation.
2

(2) A pharmacy benefit manager may not retaliate against a
3
pharmacist or pharmacy for disclosing information to a
4
government or law enforcement agency, if the pharmacist or
5
pharmacy has reasonable cause to believe that the disclosed
6
information is evidence of a violation of a State or federal
7
law, rule, or regulation.
8

(3) A pharmacist or pharmacy shall make commercially
9
reasonable efforts to limit the disclosure of confidential and
10
proprietary information.
11

(4) Retaliatory actions against a pharmacy or pharmacist
12
include cancellation of, restriction of, or refusal to renew
13
or offer a contract to a pharmacy solely because the pharmacy
14
or pharmacist has:
15

(A) made disclosures of information that the
16

pharmacist or pharmacy has reasonable cause to believe is
17

evidence of a violation of a State or federal law, rule, or
18

regulation;
19

(B) filed complaints with the plan or pharmacy benefit
20

manager; or
21

(C) filed complaints against the plan or pharmacy
22

benefit manager with the Department.
23

(j) This Section applies to contracts entered into or
24
renewed on or after July 1, 2022.
25

(k) This Section applies to any group or individual policy
26
of accident and health insurance or managed care plan that

HB1018
- 10 -
LRB104 03422 BAB 13444 b
1
provides coverage for prescription drugs and that is amended,
2
delivered, issued, or renewed on or after July 1, 2020.
3
(Source: P.A. 102-778, eff. 7-1-22; 103-154, eff. 6-30-23;
4
103-453, eff. 8-4-23.)

5

Section 99.
Effective date.
This Act takes effect July 1,
6
2025.

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