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EXPLANATION: CAPITALS INDICATE MATTER ADDED TO EXISTING LAW.
[Brackets] indicate matter deleted from existing law.
*hb1384*
HOUSE BILL 1384
J1, J5 6lr3260
By: Delegate Kipke
Introduced and read first time: February 13, 2026
Assigned to: Health
A BILL ENTITLED
AN ACT concerning 1
Maryland Medical Assistance Program – State Pharmacy Benefits Manager 2
FOR the purpose of requiring, on or before a certain date, the Maryland Department of 3
Health to select and contract with a State pharmacy benefits manager ; requiring 4
that each managed care contract entered into or renewed after a certain date require 5
the managed care organization to contract with and use the State pharmacy benefits 6
manager; requiring the Department to engage an independent consultant for a 7
certain purpose; and generally relating to a State pharmacy benefits manager for the 8
Maryland Medical Assistance Program. 9
BY repealing and reenacting, without amendments, 10
Article – Health – General 11
Section 15–103(a)(1) 12
Annotated Code of Maryland 13
(2023 Replacement Volume and 2025 Supplement) 14
BY adding to 15
Article – Health – General 16
Section 15–103(g) 17
Annotated Code of Maryland 18
(2023 Replacement Volume and 2025 Supplement) 19
BY repealing and reenacting, without amendments, 20
Article – Insurance 21
Section 15–1601(a), (p), and (q) 22
Annotated Code of Maryland 23
(2017 Replacement Volume and 2025 Supplement) 24
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 25
That the Laws of Maryland read as follows: 26
2 HOUSE BILL 1384
Article – Health – General 1
15–103. 2
(a) (1) The Secretary s hall administer the Maryland Medical Assistance 3
Program. 4
(G) (1) (I) IN THIS SUBSECTION THE FOLLOWIN G WORDS HAVE THE 5
MEANINGS INDICATED. 6
(II) “PHARMACY BENEFITS MAN AGER” HAS THE MEANING 7
STATED IN § 15–1601 OF THE INSURANCE ARTICLE. 8
(III) “SPREAD PRICING” MEANS THE MODEL OF P RESCRIPTION 9
DRUG PRICING IN WHIC H THE PHARMACY BENEF ITS MANAGER CHARGES THE 10
PROGRAM OR A MANAGED CARE ORGAN IZATION A CONTRACTED PRICE F OR A 11
PRESCRIPTION DRUG THAT DIFFERS FROM THE AMOUNT THE PHARMACY BENEFITS 12
MANAGER DIRECTLY OR INDIRECTLY PAYS THE PHARMACIST OR PHARMA CY FOR 13
THE PRESCRIPTION DRUG DISPENSED BY THE PHARMACIST OR PHARMACY. 14
(IV) “STATE PHARMACY BENEFI TS MANAGER ” MEANS THE 15
PHARMACY BENEFITS MA NAGER CONTRACTED BY THE DEPARTMENT UNDER THIS 16
SECTION TO ADMINISTER PHARMACY BENEFITS FOR ALL PROGRAM RECIPIENTS IN 17
THE STATE, INCLUDING THOSE ENROLLED IN A MANAGED CARE ORGANIZATION. 18
(2) (I) ON OR BEFORE JULY 1, 2028, THE DEPARTMENT SHALL 19
SELECT AND CONTRACT WITH A SINGLE THIRD –PARTY ADMINISTRATOR TO SERVE 20
AS THE STATE PHARMACY BENEFITS MANAGER. 21
(II) EACH MANAGED CARE CONTRAC T THAT IS ENTERED INTO 22
OR RENEWED BY THE DEPARTMENT ON OR AFTE R JULY 1, 2028, SHALL REQUIRE 23
THE MANAGED CARE ORG ANIZATION TO CONTRAC T WITH AND USE THE STATE 24
PHARMACY BENEFITS MA NAGER FOR THE PURPOS E OF ADMINISTERING A LL 25
PHARMACY BENEFITS FOR PROGRAM RECIPIENTS ENROLLED WITH THE MANAGED 26
CARE ORGANIZATION. 27
(3) THE CONTRACT ENTERED INTO UNDER PARAGRAPH (2)(I) OF THIS 28
SECTION SHALL: 29
(I) ESTABLISH THE STATE PHARMACY BENEFITS MA NAGER’S 30
FIDUCIARY DUTY OWED TO THE DEPARTMENT; 31
(II) REQUIRE THE USE OF PASS–THROUGH PRICING; 32
HOUSE BILL 1384 3
(III) REQUIRE THE STATE PHARMACY BENEFI TS MANAGER TO 1
USE THE COMMON FORMUL ARY, REIMBURSEMENT METHOD OLOGIES, AND 2
DISPENSING FEES NEGO TIATED BY THE DEPARTMENT WITH INPUT FROM 3
STAKEHOLDERS; 4
(IV) REQUIRE TRANSPARENCY IN DRUG COSTS, REBATES 5
COLLECTED AND PAID , DISPENSING FEES PAID , ADMINISTRATIVE FEES, AND ALL 6
OTHER CHARGES, FEES, COSTS, AND HOLDBACKS; AND 7
(V) PROHIBIT SPREAD PRICING. 8
(4) (I) TO ADVISE THE DEPARTMENT IN SELECTING AND 9
CONTRACTING WITH THE SINGLE THIRD –PARTY ADMINISTRATOR UNDER 10
PARAGRAPH (2)(I) OF THIS SUBSECTION , THE DEPARTMENT SHALL ENGAGE AN 11
INDEPENDENT CONSULTANT WITH DIRECT EXPERIENCE: 12
1. ADVISING MEDICAID FRAUD CONTROL UNITS; AND 13
2. WORKING WITH STATES THAT HAV E ESTABLISHED A 14
SINGLE PHARMACY BENEFITS MANAGER FOR THEIR MEDICAID PROGRAM. 15
(II) THE INDEPENDENT CONSULTANT ENGAGED UNDER 16
SUBPARAGRAPH (I) OF THIS PARAGRAPH MA Y NOT BE ENGAGED BY A MANAGED 17
CARE ORGANIZATION OR BY ANY PHARMACY BENE FITS MANAGER CONTRAC TED 18
WITH A MANAGED CARE ORGANIZATION. 19
Article – Insurance 20
15–1601. 21
(a) In this subtitle the following words have the meanings indicated. 22
(p) (1) “Pharmacy benefits management services” means: 23
(i) the procurement of prescription drugs at a negotiated rate for 24
dispensation within the State to beneficiaries; 25
(ii) the administration or management of prescription drug coverage 26
provided by a purchaser for beneficiaries; and 27
(iii) any of the following services provided with regard to the 28
administration of prescription drug coverage: 29
1. mail service pharmacy; 30
4 HOUSE BILL 1384
2. claims processing, retail network management, and 1
payment of claims to pharmacies for prescription drugs dispensed to beneficiaries; 2
3. clinical formulary development and management services; 3
4. rebate contracting and administration; 4
5. patient compliance, therapeutic intervention, and generic 5
substitution programs; or 6
6. disease management programs. 7
(2) “Pharmacy benefits management services” does not include any service 8
provided by a nonprofit health maintenance organization that operates as a grou p model, 9
provided that the service: 10
(i) is provided solely to a member of the nonprofit health 11
maintenance organization; and 12
(ii) is furnished through the internal pharmacy operations of the 13
nonprofit health maintenance organization. 14
(q) “Pharmacy benefits manager” means a person that performs pharmacy 15
benefits management services. 16
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect 17
October 1, 2026. 18