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STATE OF OKLAHOMA
1st Session of the 60th Legislature (2025)
SENATE BILL 1025 By: Haste
AS INTRODUCED
An Act relating to health care; amending 36 O.S.
2021, Sections 6960 and 6962, as last amended by
Sections 1 and 2, Chapter 306, O.S.L. 2024 (36 O.S.
Supp. 2024, Sections 6960 and 6962), which relate to
definitions and pharmacy benefits manager compliance;
defining terms; creating pharmacy benefits manager
disclosures; creating duties; creating the Oklahoma
Rebate Pass-Through and Pharmacy Benefits Manager
Meaningful Transparency Act of 2025; providing short
title; clarifying authority to take certain actions;
prohibiting the disclosure of certain information;
declaring that certain information not be considered
public record; defining terms; providing cost sharing
calculation methodology, limitations, and
requirements; creating penalties; providing certain
exceptions; amending 36 O.S. 2021, Section 6964,
which relates to a formulary for prescription drugs;
creating agency duties; amending 59 O.S. 2021,
Sections 357 and 358, as amended by Sections 4 and 5,
Chapter 332, O.S.L. 2024 (59 O.S. Supp. 2024,
Sections 357 and 358), which relate to definitions
and pharmacy benefits management licensure,
procedure, and penalties; modifying definitions;
creating duties; creating licensing application
requirements; providing for noncodification;
providing for codification; and providing an
effective date.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
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SECTION 1. AMENDATORY 36 O.S. 2021, Section 6960, as
last amended by Section 1, Chapter 306, O.S.L. 2024 (36 O.S. Supp.
2024, Section 6960), is amended to read as follows:
Section 6960. A. For purposes of the Patient’s Right to
Pharmacy Choice Act:
1. “Administrative fees” means fees or payments from
pharmaceutical manufacturers to, or otherwise retained by, a
pharmacy benefits manager (PBM) or its designee pursuant to a
contract between a PBM or affiliate and the manufacturer in
connection with the PBM’s administering, invoicing, allocating, and
collecting the rebates;
2. “Aggregate retained rebate percentage” means the percentage
of all rebates received by a PBM from all pharmaceutical
manufacturers which is not passed on to the PBM’s health plan or
health insurer clients. Aggregate retained rebate percentage shall
be expressed without disclosing any identifying information
regarding any health plan, prescription drug, or therapeutic class,
and shall be calculated by dividing:
a. the aggregate dollar amount of all rebates that the
PBM received during the prior calendar year from all
pharmaceutical manufacturers and did not pass through
to the PBM’s health plan or health insurer clients, by
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b. the aggregate dollar amount of all rebates that the
pharmacy benefits manager received during the prior
calendar year from all pharmaceutical manufacturers;
3. “Covered entity” means a nonprofit hospital or medical
service organization, for-profit hospital or medical service
organization, insurer, health benefit plan, health maintenance
organization, health program administered by the state in the
capacity of providing health coverage, or an employer, labor union,
or other group of persons that provides health coverage to persons
in this state. This term does not include a health plan that
provides coverage only for accidental injury, specified disease,
hospital indemnity, disability income, or other limited benefit
health insurance policies and contracts that do not include
prescription drug coverage;
4. “Defined cost sharing” means a deductible payment or
coinsurance amount imposed on an enrollee for a covered prescription
drug under the enrollee’s health plan;
5. “Formulary” means a list of prescription drugs, as well as
accompanying tiering and other coverage information, that has been
developed by an insurer, a health plan, or the designee of a health
insurer or health plan, which the health insurer, health plan, or
designee of the health insurer or health plan references in
determining applicable coverage and benefit levels;
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6. “Generic equivalent” means a drug that is designated to be
therapeutically equivalent, as indicated by the United States Food
and Drug Administration’s Approved Drug Products with Therapeutic
Equivalence Evaluations; provided, however, that a drug shall not be
considered a generic equivalent until the drug becomes nationally
available;
2. 7. “Health insurer” means any corporation, association,
benefit society, exchange, partnership or individual licensed by the
Oklahoma Insurance Code;
8. “Health insurer administrative service fees” means fees or
payments from a health insurer or a designee of the health insurer
to, or otherwise retained by, a PBM or its designee pursuant to a
contract between a PBM or affiliate, and the health insurer or
designee of the health insurer in connection with the PBM managing
or administering the pharmacy benefits and administering, invoicing,
allocating, and collecting rebates;
3. 9. “Health insurer payor” means a health insurance company,
health maintenance organization, union, hospital and medical
services organization or any entity providing or administering a
self-funded health benefit plan;
10. “Health plan” means a policy, contract, certification, or
agreement offered or issued by a health insurer to provide, deliver,
arrange for, pay for, or reimburse any of the costs of health
services;
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4. 11. “Mail-order pharmacy” means a pharmacy licensed by this
state that primarily dispenses and delivers covered drugs via common
carrier;
12. “Pharmacy and therapeutics committee” or “P&T committee”
means a committee at a hospital or a health insurance plan that
decides which drugs will appear on that entity’s drug formulary;
5. 13. “Pharmacy benefits manager” or “PBM” means a person,
business, or other entity that, either directly or through an
intermediary, performs pharmacy benefits management, as defined in
paragraph 7 of Section 357 of Title 59 of the Oklahoma Statutes.
The term shall include a person or entity acting on behalf of a PBM
in a contractual or employment relationship in the performance of
pharmacy benefits management for a managed care company, nonprofit
hospital, medical service organization, insurance company, third-
party payor or a health program administered by a department of this
state. PBM does not include a pharmacy services administrative
organization;
6. 14. “Pharmacy benefits management” means a service provided
to covered entities to facilitate the provisions of prescription
drug benefits to covered individuals within the state, including,
but not limited to, negotiating pricing and other terms with drug
manufacturers and providers. Pharmacy benefits management may
include any or all of the following services:
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a. claims processing, retail network management, and
payment of claims to pharmacies for prescription drugs
dispensed to covered individuals,
b. administration or management of pharmacy discount
cards or programs,
c. clinical formulary development and management
services, or
d. rebate contracting and administration;
15. “Price protection rebate” means a negotiated price
concession that accrues directly or indirectly to the health
insurer, or other party on behalf of the health insurer, in the
event of an increase in the wholesale acquisition of a drug above a
specified threshold;
7. 16. “Provider” means a pharmacy, as defined in Section 353.1
of Title 59 of the Oklahoma Statutes or an agent or representative
of a pharmacy;
17. “Rebates” means:
a. negotiated price concessions including, but not
limited to, base price concessions, whether described
as a rebate or otherwise, and reasonable estimates of
any price protection rebates and performance-based
price concessions that may accrue directly or
indirectly to a health insurer, health plan, or PBM
during the coverage year from a manufacturer,
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dispensing pharmacy, or other party in connection with
the dispensing or administration of a prescription
drug, and
b. reasonable estimates of any price concessions, fees,
and other administrative costs that are passed
through, or are reasonably anticipated to be passed
through, to a health insurer, health plan, or PBM and
serve to reduce the health insurer, health plan, or
PBM’s liabilities for a prescription drug;
8. 18. “Retail pharmacy network” means retail pharmacy
providers contracted with a PBM in which the pharmacy primarily
fills and sells prescriptions via a retail, storefront location;
9. 19. “Rural service area” means a five-digit ZIP code in
which the population density is less than one thousand (1,000)
individuals per square mile;
10. 20. “Spread pricing” means a prescription drug pricing
model utilized by a pharmacy benefits manager in which the PBM
charges a health benefit plan a contracted price for prescription
drugs that differs from the amount the PBM directly or indirectly
pays the pharmacy or pharmacist for providing pharmacy services;
11. 21. “Suburban service area” means a five-digit ZIP code in
which the population density is between one thousand (1,000) and
three thousand (3,000) individuals per square mile; and
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12. 22. “Urban service area” means a five-digit ZIP code in
which the population density is greater than three thousand (3,000)
individuals per square mile.
B. Nothing in the definitions of pharmacy benefits manager or
pharmacy benefits management as such terms are defined in the
Patient’s Right to Pharmacy Choice Act, the Pharmacy Audit Integrity
Act, or Sections 357 through 360 of Title 59 of the Oklahoma
Statutes shall be construed to deem the following entities to be a
pharmacy benefits manager:
1. An employer of its own self-funded health benefit plan,
except, to the extent permitted by applicable law, where the
employer without the utilization of a third party and unrelated to
the employer’s own pharmacy:
a. negotiates directly with drug manufacturers,
b. processes claims on behalf of its members, or
c. manages its own retail network of pharmacies; or
2. A pharmacy that provides a patient with a discount card or
program that is for exclusive use at the pharmacy offering the
discount.
SECTION 2. AMENDATORY 36 O.S. 2021, Section 6962, as
last amended by Section 2, Chapter 306, O.S.L. 2024 (36 O.S. Supp.
2024, Section 6962), is amended to read as follows:
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Section 6962. A. The Attorney General shall review and approve
retail pharmacy network access for all pharmacy benefits managers
(PBMs) to ensure compliance with Section 6961 of this title.
B. A PBM, or an agent of a PBM, shall not:
1. Cause or knowingly permit the use of advertisement,
promotion, solicitation, representation, proposal or offer that is
untrue, deceptive or misleading;
2. Charge a pharmacist or pharmacy a fee related to the
adjudication of a claim including without limitation a fee for:
a. the submission of a claim,
b. enrollment or participation in a retail pharmacy
network, or
c. the development or management of claims processing
services or claims payment services related to
participation in a retail pharmacy network;
3. Reimburse a pharmacy or pharmacist in the state an amount
less than the amount that the PBM reimburses a pharmacy owned by or
under common ownership with a PBM for providing the same covered
services. The reimbursement amount paid to the pharmacy shall be
equal to the reimbursement amount calculated on a per-unit basis
using the same generic product identifier or generic code number
paid to the PBM-owned or PBM-affiliated pharmacy;
4. Deny a provider the opportunity to participate in any
pharmacy network at preferred participation status if the provider
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is willing to accept the terms and conditions that the PBM has
established for other providers as a condition of preferred network
participation status;
5. Deny, limit or terminate a provider’s contract based on
employment status of any employee who has an active license to
dispense, despite probation status, with the State Board of
Pharmacy;
6. Retroactively deny or reduce reimbursement for a covered
service claim after returning a paid claim response as part of the
adjudication of the claim, unless:
a. the original claim was submitted fraudulently, or
b. to correct errors identified in an audit, so long as
the audit was conducted in compliance with Sections
356.2 and 356.3 of Title 59 of the Oklahoma Statutes;
7. Fail to make any payment due to a pharmacy or pharmacist for
covered services properly rendered in the event a PBM terminates a
provider from a pharmacy benefits manager network;
8. Conduct or practice Either directly or through an
intermediary, agent, or affiliate, engage in, facilitate, or enter
into a contract with another person involving spread pricing, as
defined in Section 6960 of this title, in this state; or
9. Charge a pharmacist or pharmacy a fee related to
participation in a retail pharmacy network including but not limited
to the following:
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a. an application fee,
b. an enrollment or participation fee,
c. a credentialing or re-credentialing fee,
d. a change of ownership fee, or
e. a fee for the development or management of claims
processing services or claims payment services; or
10. Prohibit or penalize a pharmacy or pharmacist for:
a. disclosing to an individual information regarding the
existence and clinical efficacy of a generic
equivalent that would be less expensive to the
enrollee:
(1) under his or her health plan prescription drug
benefit, or
(2) outside his or her health plan prescription drug
benefit, without requesting any health plan
reimbursement, than the drug that was originally
prescribed, or
b. selling to an individual, instead of a particular
prescribed drug, a therapeutically equivalent drug
that would be less expensive to the enrollee:
(1) under his or her health plan prescription drug
benefit, or
(2) outside his or her health plan prescription drug
benefit, without requesting any health plan
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reimbursement, than the drug that was originally
prescribed.
C. The prohibitions under this section shall apply to contracts
between pharmacy benefits managers and providers for participation
in retail pharmacy networks.
1. A PBM contract shall:
a. not restrict, directly or indirectly, any pharmacy
that dispenses a prescription drug from informing, or
penalize such pharmacy for informing, an individual of
any differential between the individual’s out-of-
pocket cost or coverage with respect to acquisition of
the drug and the amount an individual would pay to
purchase the drug directly, and
b. ensure that any entity that provides pharmacy benefits
management services under a contract with any such
health plan or health insurance coverage does not,
with respect to such plan or coverage, restrict,
directly or indirectly, a pharmacy that dispenses a
prescription drug from informing, or penalize such
pharmacy for informing, a covered individual of any
differential between the individual’s out-of-pocket
cost under the plan or coverage with respect to
acquisition of the drug and the amount an individual
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would pay for acquisition of the drug without using
any health plan or health insurance coverage.
2. A pharmacy benefits manager’s contract with a provider shall
not prohibit, restrict, or limit disclosure of information or
documents to the Attorney General, law enforcement or state and
federal governmental officials investigating or examining a
complaint or conducting a review of a pharmacy benefits manager’s
compliance with the requirements under the Patient’s Right to
Pharmacy Choice Act, the Pharmacy Audit Integrity Act, and Sections
357 through 360 of Title 59 of the Oklahoma Statutes.
D. A pharmacy benefits manager shall:
1. Establish and maintain an electronic claim inquiry
processing system using the National Council for Prescription Drug
Programs’ current standards to communicate information to pharmacies
submitting claim inquiries;
2. Fully disclose to insurers, self-funded employers, unions or
other PBM clients the existence of the respective aggregate
prescription drug discounts, rebates received from drug
manufacturers and pharmacy audit recoupments;
3. Provide the Attorney General, insurers, self-funded employer
plans and unions unrestricted audit rights of and access to the
respective PBM pharmaceutical manufacturer and provider contracts,
plan utilization data, plan pricing data, pharmacy utilization data
and pharmacy pricing data;
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4. Maintain, for no less than three (3) years, documentation of
all network development activities including but not limited to
contract negotiations and any denials to providers to join networks.
This documentation shall be made available to the Attorney General
upon request; and
5. Report to the Attorney General, on a quarterly basis for
each health insurer payor, on the following information:
a. the aggregate amount of rebates received by the PBM,
b. the aggregate amount of rebates distributed to the
appropriate health insurer payor,
c. the aggregate amount of rebates passed on to the
enrollees of each health insurer payor at the point of
sale that reduced the applicable deductible,
copayment, coinsure or other cost sharing amount of
the enrollee,
d. the individual and aggregate amount paid by the health
insurer payor to the PBM for pharmacy services
itemized by pharmacy, drug product and service
provided, and
e. the individual and aggregate amount a PBM paid a
provider for pharmacy services itemized by pharmacy,
drug product and service provided.
E. Nothing in the Patient’s Right to Pharmacy Choice Act shall
prohibit the Attorney General from requesting and obtaining detailed
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data, including raw data, in response to the information provided by
a PBM in the quarterly reports required by this section. The
Attorney General may alter the frequency of the reports required by
this section at his or her sole discretion.
F. The Attorney General may promulgate rules to implement the
provisions of the Patient’s Right to Pharmacy Choice Act, the
Pharmacy Audit Integrity Act, and Sections 357 through 360 of Title
59 of the Oklahoma Statutes.
SECTION 3. NEW LAW A new section of law not to be
codified in the Oklahoma Statutes reads as follows:
This act shall be known and may be cited as the “Oklahoma Rebate
Pass-Through and Pharmacy Benefits Manager Meaningful Transparency
Act of 2025”.
SECTION 4. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 6962.2 of Title 36, unless there
is created a duplication in numbering, reads as follows:
A. An enrollee’s defined cost sharing for each prescription
drug shall be calculated at the point of sale based on a price that
is reduced by an amount equal to at least eighty-five percent (85%)
of all rebates received, or to be received, in connection with the
dispensing or administration of the prescription drug.
B. For any violation of this section, the Insurance
Commissioner may subject a pharmacy benefits manager (PBM) to an
administrative penalty of not less than One Hundred Dollars
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($100.00) nor more than Ten Thousand Dollars ($10,000.00) for each
occurrence. Such administrative penalty may be enforced in the same
manner in which civil judgments may be enforced.
C. Nothing in subsections A and B of this section shall
preclude a PBM from decreasing an enrollee’s defined cost sharing by
an amount greater than that required under subsection A of this
section.
D. In implementing the requirements of this section, the state
shall only regulate a PBM to the extent permissible under applicable
law.
E. In complying with the provisions of this section, a PBM or
its agents shall not publish or otherwise reveal information
regarding the actual amount of rebates a PBM receives on a product
or therapeutic class of products, manufacturer, or pharmacy-specific
basis. Such information is protected as a trade secret, is not a
public record as defined in the Oklahoma Open Records Act, Section
24A.1 et seq. of Title 51 of the Oklahoma Statutes, and shall not be
disclosed directly or indirectly, or in a manner that would allow
for the identification of an individual product, therapeutic class
of products, or manufacturer, or in a manner that would have the
potential to compromise the financial, competitive, or proprietary
nature of the information. A PBM shall impose the confidentiality
protections of this section on any vendor or downstream third party
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that performs health care or administrative services on behalf of
the insurer that may receive or have access to rebate information.
SECTION 5. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 6970 of Title 36, unless there
is created a duplication in numbering, reads as follows:
A. For purposes of this section:
1. “Defined cost sharing” means a deductible payment or
coinsurance amount imposed on an enrollee for a covered prescription
drug under the enrollee’s health plan;
2. “Insurer” means any health insurance issuer that is subject
to state law regulating insurance and offers health insurance
coverage, as defined in 42 U.S.C., Section 300gg-91, or any state or
local governmental employer plan;
3. “Price protection rebate” means a negotiated price
concession that accrues directly or indirectly to the insurer, or
other party on behalf of the insurer, in the event of an increase in
the wholesale acquisition cost of a drug above a specified
threshold; and
4. “Rebate” means:
a. negotiated price concessions including, but not
limited to, base price concessions, whether described
as a rebate or otherwise, and reasonable estimates of
any price protection rebates and performance-based
price concessions that may accrue directly or
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indirectly to the insurer during the coverage year
from a manufacturer, dispensing pharmacy, or other
party in connection with the dispensing or
administration of a prescription drug, and
b. reasonable estimates of any negotiated price
concessions, fees, and other administrative costs that
are passed through, or are reasonably anticipated to
be passed through, to the insurer and serve to reduce
the insurer’s liabilities for a prescription drug.
B. An enrollee’s defined cost sharing for each prescription
drug shall be calculated at the point of sale based on a price that
is reduced by an amount equal to at least eighty-five percent (85%)
of all rebates received, or to be received, in connection with the
dispensing or administration of the prescription drug.
C. For any violation of this section, the Insurance
Commissioner may subject an insurer to an administrative penalty of
not less than One Hundred Dollars ($100.00) nor more than Ten
Thousand Dollars ($10,000.00) for each occurrence. Such
administrative penalty may be enforced in the same manner in which
civil judgments may be enforced.
D. Nothing in subsections A through C of this section shall
preclude an insurer from decreasing an enrollee’s defined cost
sharing by an amount greater than that required under subsection B
of this section.
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E. In implementing the requirements of this section, the state
shall only regulate an insurer to the extent permissible under
applicable law.
F. In complying with the provisions of this section, an insurer
or its agents shall not publish or otherwise reveal information
regarding the actual amount of rebates an insurer receives on a
product or therapeutic class of products, manufacturer, or pharmacy-
specific basis. Such information is protected as a trade secret, is
not a public record as defined in the Oklahoma Open Records Act,
Section 24A.1 et seq. of Title 51 of the Oklahoma Statutes, and
shall not be disclosed directly or indirectly, or in a manner that
would allow for the identification of an individual product,
therapeutic class of products, or manufacturer, or in a manner that
would have the potential to compromise the financial, competitive,
or proprietary nature of the information. An insurer shall impose
the confidentiality protections of this section on any vendor or
downstream third party that performs health care or administrative
services on behalf of the insurer and that may receive or have
access to rebate information.
SECTION 6. AMENDATORY 36 O.S. 2021, Section 6964, is
amended to read as follows:
Section 6964. A. A health insurer’s insurer or its agent’s
including pharmacy benefits managers, pharmacy and therapeutics
committee (P&T committee) shall establish a formulary, which shall
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be a list of prescription drugs, both generic and brand name, used
by practitioners to identify drugs that offer the greatest overall
value.
B. A health insurer shall prohibit conflicts of interest for
members of the P&T committee. The P&T committee shall review the
formulary annually and must meet the following requirements:
1. A person may not serve on a P&T committee if the person is
currently employed or was employed within the preceding year by a
pharmaceutical manufacturer, developer, labeler, wholesaler or
distributor. A majority of P&T committee members shall be practicing
physicians, practicing pharmacists, or both, and shall be licensed
in Oklahoma;
2. A health insurer shall require any member of the P&T
committee to disclose any compensation or funding from a
pharmaceutical manufacturer, developer, labeler, wholesaler or
distributor. Such P&T committee member shall be recused from voting
on any product manufactured or sold by such pharmaceutical
manufacturer, developer, labeler, wholesaler or distributor. P&T
committee members shall practice in various clinical specialties
that adequately represent the needs of health plan enrollees, and
there shall be an adequate number of high-volume specialists and
specialists treating rare and orphan diseases;
3. The P&T committee shall meet no less frequently than on a
quarterly basis;
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4. P&T committee formulary development shall be conducted
pursuant to a transparent process, and formulary decisions and
rationale shall be documented in writing, with any records and
documents relating to the process available upon request to the
health plan, subject to the conditions in subsection C of this
section. In the case of P&T committee decisions that relate to
Medicaid managed care organizations’ prescription drug coverage
policies, if the P&T committee relies upon any third party to
provide cost-effectiveness analysis or research, the P&T committee
shall:
a. disclose to the health benefit plan, the state, and
the general public the name of the relevant third
party, and
b. provide a process through which patients and providers
potentially impacted by the third party’s analysis or
research may provide input to the P&T committee;
5. Specialists with current clinical expertise who actively
treat patients in a specific therapeutic area, and specific
conditions within a therapeutic area, shall participate in formulary
decisions regarding each therapeutic area and specific condition;
6. The P&T committee shall base its clinical decisions on the
strength of scientific evidence, standards of practice, and
nationally accepted treatment guidelines;
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7. The P&T committee shall consider whether a particular drug
has a clinically meaningful therapeutic advantage over other drugs
in terms of safety, effectiveness, or clinical outcome for patient
populations who may be treated with the drug;
8. The P&T committee shall evaluate and analyze treatment
protocols and procedures related to the health plan’s formulary at
least annually;
9. The P&T committee shall review formulary management
activities, including exceptions and appeals processes, prior
authorization, step therapy, quantity limits, generic substitutions,
therapeutic interchange, and other drug utilization management
activities for clinical appropriateness and consistency with
industry standards and patient and provider organization guidelines;
10. The P&T committee shall annually review and provide a
written report to the pharmacy benefits manager on:
a. the percentage of prescription drugs on formulary
subject to each of the types of utilization management
described in paragraph 9 of this subsection,
b. rates of adherence and nonadherence to medicines by
therapeutic area,
c. rates of abandonment of medicines by therapeutic area,
d. recommendations for improved adherence and reduced
abandonment, and
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e. recommendations for improvement in formulary
management practices consistent with patient and
provider organization and other clinical guidelines,
provided that the report shall be subject to the
conditions in subsection C of this section;
11. The P&T committee shall review and make a formulary
decision on a new U.S. Food and Drug Administration-approved drug
within ninety (90) days of such drug’s approval, or shall provide a
clinical justification if this time frame is not met; and
12. The P&T committee shall review procedures for medical
review of, and transitioning new plan enrollees to, appropriate
formulary alternatives to ensure that such procedures appropriately
address situations involving enrollees stabilized on drugs that are
not on the health plan formulary, or that are on formulary but are
subject to prior authorization, step therapy, or other utilization
management requirements.
C. The health insurer, its agents, including pharmacy benefits
managers, and the Department shall not publish or otherwise disclose
any confidential, proprietary information, including, but not
limited to, any information that would reveal the identity of a
specific health plan, the prices charged for a specific drug or
class of drugs, the amount of any rebates provided for a specific
drug or class of drugs, the manufacturer, or that would otherwise
have the potential to compromise the financial, competitive, or
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proprietary nature of the information. Any such information shall
be protected from disclosure as confidential and proprietary
information, is not a record as defined in the Oklahoma Open Records
Act, Section 24A.3 of Title 51 of the Oklahoma Statutes, and shall
not be disclosed directly or indirectly. A health insurer shall
impose the confidentiality protections of this section on any vendor
or downstream third party that performs health care or
administrative services on behalf of the pharmacy benefits manager
that may receive or have access to rebate information.
SECTION 7. AMENDATORY 59 O.S. 2021, Section 357, as
amended by Section 4, Chapter 332, O.S.L. 2024 (59 O.S. Supp. 2024,
Section 357), is amended to read as follows:
Section 357. A. As used in Sections 357 through 360 of this
title:
1. “Covered entity” means a nonprofit hospital or medical
service organization, for-profit hospital or medical service
organization, insurer, health benefit plan, health maintenance
organization, health program administered by the state in the
capacity of providing health coverage, or an employer, labor union,
or other group of persons that provides health coverage to persons
in this state. This term does not include a health benefit plan
that provides coverage only for accidental injury, specified
disease, hospital indemnity, disability income, or other limited
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benefit health insurance policies and contracts that do not include
prescription drug coverage;
2. “Covered individual” means a member, participant, enrollee,
contract holder or policy holder or beneficiary of a covered entity
who is provided health coverage by the covered entity. A covered
individual includes any dependent or other person provided health
coverage through a policy, contract or plan for a covered
individual;
3. “Department” means the Insurance Department;
4. “Maximum allowable cost”, “MAC”, or “MAC list” means the
list of drug products delineating the maximum per-unit reimbursement
for multiple-source prescription drugs, medical product, or device;
5. “Multisource drug product reimbursement” (reimbursement)
means the total amount paid to a pharmacy inclusive of any reduction
in payment to the pharmacy, excluding prescription dispense fees;
6. “Office” means the Office of the Attorney General;
7. “Pharmacy benefits management” means a service provided to
covered entities to facilitate the provision of prescription drug
benefits to covered individuals within the state, including
negotiating pricing and other terms with drug manufacturers and
providers. Pharmacy benefits management may include any or all of
the following services:
a. claims processing, performance of drug utilization
review, processing of drug prior authorization
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requests, retail network management and payment of
claims to pharmacies for prescription drugs dispensed
to covered individuals,
b. clinical formulary development and management
services, or
c. rebate contracting and administration;,
d. adjudication of appeals and grievances related to the
prescription drug benefit, or
e. controlling the cost of prescription drugs;
8. “Pharmacy benefits manager” or “PBM” means a person,
business, or other entity that, either directly or through an
intermediary, performs pharmacy benefits management. The term shall
include a person or entity acting on behalf of a PBM in a
contractual or employment relationship in the performance of
pharmacy benefits management for a managed care company, nonprofit
hospital, medical service organization, insurance company, third-
party payor, or a health program administered by an agency or
department of this state. PBM does not include a pharmacy services
administrative organization;
9. “Plan sponsor” means the employers, insurance companies,
unions and health maintenance organizations or any other entity
responsible for establishing, maintaining, or administering a health
benefit plan on behalf of covered individuals; and
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10. “Provider” means a pharmacy licensed by the State Board of
Pharmacy, or an agent or representative of a pharmacy, including,
but not limited to, the pharmacy’s contracting agent, which
dispenses prescription drugs or devices to covered individuals.
B. Nothing in the definition of pharmacy benefits management or
pharmacy benefits manager in the Patient’s Right to Pharmacy Choice
Act, Pharmacy Audit Integrity Act, or Sections 357 through 360 of
this title shall deem an employer a “pharmacy benefits manager” of
its own self-funded health benefit plan, except, to the extent
permitted by applicable law, where the employer, without the
utilization of a third party and unrelated to the employer’s own
pharmacy:
a. negotiates directly with drug manufacturers,
b. processes claims on behalf of its members, or
c. manages its own retail network of pharmacies.
SECTION 8. AMENDATORY 59 O.S. 2021, Section 358, as
amended by Section 5, Chapter 332, O.S.L. 2024 (59 O.S. Supp. 2024,
Section 358), is amended to read as follows:
Section 358. A. In order to provide pharmacy benefits
management or any of the services included under the definition of
pharmacy benefits management in this state, a pharmacy benefits
manager or any entity acting as one in a contractual or employment
relationship for a covered entity shall first obtain a license from
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the Insurance Department, and the Department may charge a fee for
such licensure.
B. The Department shall establish, by regulation, licensure
procedures, required disclosures for pharmacy benefits managers
(PBMs) and other rules as may be necessary for carrying out and
enforcing the provisions of this title. The licensure procedures
shall, at a minimum, include the completion of an application form
that shall include the name and address of an agent for service of
process, the payment of a requisite fee, and evidence of the
procurement of a surety bond the following:
1. The name, address, and telephone contact number of the PBM;
2. The name and address of the PBM’s agent for service of
process in the state;
3. The name and address of each person with management or
control over the PBM;
4. Evidence of the procurement of a surety bond;
5. The name and address of each person with a beneficial
ownership interest in the PBM;
6. In the case of a PBM applicant that is a partnership or
other unincorporated association, limited liability corporation, or
corporation, and has five or more partners, members, or
stockholders:
a. the applicant’s legal structure and the total number
of partners, members, or stockholders,
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b. the name, address, usual occupation, and professional
qualifications of the five partners, members, or
stockholders with the five largest ownership interests
in the PBM, and
c. the applicant’s agreement that, upon request by the
Department, it shall furnish the Department with
information regarding the name, address, usual
occupation, and professional qualifications of any
other partners, members, or stockholders;
7. A signed statement indicating that the PBM has not been
convicted of a felony and has not violated any of the requirements
of the Oklahoma Pharmacy Act and the Patient’s Right to Pharmacy
Choice Act, or, if the applicant cannot provide such a statement, a
signed statement describing all relevant convictions or violations;
and
8. Any other information the Commissioner deems necessary to
review.
C. The Department or the Office of the Attorney General may
subpoena witnesses and information. Its compliance officers may
take and copy records for investigative use and prosecutions.
Nothing in this subsection shall limit the Office of the Attorney
General from using its investigative demand authority to investigate
and prosecute violations of the law.
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D. The Department may suspend, revoke or refuse to issue or
renew a license for noncompliance with any of the provisions hereby
established or with the rules promulgated by the Department; for
conduct likely to mislead, deceive or defraud the public or the
Department; for unfair or deceptive business practices or for
nonpayment of an application or renewal fee or fine. The Department
may also levy administrative fines for each count of which a PBM has
been convicted in a Department hearing.
E. 1. The Office of the Attorney General, after notice and
opportunity for hearing, may instruct the Insurance Commissioner
that the PBM’s license be censured, suspended, or revoked for
conduct likely to mislead, deceive, or defraud the public or the
State of Oklahoma; or for unfair or deceptive business practices, or
for any violation of the Patient’s Right to Pharmacy Choice Act, the
Pharmacy Audit Integrity Act, or Sections 357 through 360 of this
title. The Office of the Attorney General may also levy
administrative fines for each count of which a PBM has been
convicted following a hearing before the Attorney General. If the
Attorney General makes such instruction, the Commissioner shall
enforce the instructed action within thirty (30) calendar days.
2. In addition to or in lieu of any censure, suspension, or
revocation of a license by the Commissioner, the Attorney General
may levy a civil or administrative fine of not less than One Hundred
Dollars ($100.00) and not greater than Ten Thousand Dollars
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($10,000.00) for each violation of this subsection and/or assess any
other penalty or remedy authorized by this section. For purposes of
this section, each day a PBM fails to comply with an investigation
or inquiry may be considered a separate violation.
F. The Attorney General may promulgate rules to implement the
provisions of Sections 357 through 360 of this title.
SECTION 9. This act shall become effective November 1, 2025.
60-1-830 CAD 1/16/2025 2:29:19 PM