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An Act
ENROLLED SENATE
BILL NO. 1447 By: Gollihare, Bullard, and
Burns of the Senate
and
Marti of the House
An Act relating to the Oklahoma Employees Insurance
Plan; defining terms; requiring certain provisions to
be included in certain contract; prohibiting pharmacy
benefits manager (PBM) from changing drug placement
on a formulary without certain written authorization;
prohibiting PBM from prohibiting certain guarantees
of set pricing; prohibiting PBM from including
certain plan designs without certain impact analysis
and certain written approval of certain provisions by
state plan; prohibiting PBM from establishing certain
less favorable network terms; prohibiting
establishment of certain gag clauses by certain PBM;
prohibiting establishment of certain contract
provisions that create certain conditions that
exclude certain pharmacies without certain
justification; requiring PBM to disclose certain
affiliates or subcontractors prior to awarding of
certain contract; requiring certain rebates to be
passed through to state plan; construing provisions;
establishing certain determination of certain
guarantees; requiring PBM to maintain certain System
and Organization Controls (SOC) Type 2 certification;
requiring PBM to provide certain written impact
analysis prior to approval of changes to certain
contract provisions; requiring certain impact
analysis to include certain provisions; requiring PBM
to submit certain report including certain claim-
level reporting data; requiring certain report to
include certain provisions; allowing certain contract
proposal to be scored based on certain provisions;
providing for codification; and providing an
effective date.
ENR. S. B. NO. 1447 Page 2
SUBJECT: Oklahoma Employees Insurance Plan
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 1330.1 of Title 74, unless there
is created a duplication in numbering, reads as follows:
As used in this act:
1. “Affiliate” means any person or entity that controls, is
controlled by, or is under common control with another person or
entity;
2. “Affiliated pharmacy” means any pharmacy, mail pharmacy,
specialty pharmacy, or pharmacy services provider that is owned,
operated, managed, or controlled by a pharmacy benefits manager
(PBM) or that otherwise shares profits or losses with the PBM or an
affiliate through common ownership, management, or contractual
arrangement;
3. “Control” means the possession of the power to direct or
cause the direction of management and policies of a person or
entity, whether through ownership of voting securities, by contract,
or otherwise. Control shall be established if a person or entity
owns, controls, or holds with power to vote, ten percent (10%) or
more of the voting securities or other ownership interest of the
other person or entity;
4. “Operation data” means all data and records generated,
received, maintained, or derived in connection with the provision of
PBM services to a state plan, including claims data, pricing files,
payment and remittance data, adjudication edits, rejection and
reversal data, provider network files, pharmacy contracts and
amendments, audit records, formulary files, utilization management
outputs, communications affecting benefits, and any reports derived
from such data;
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5. “Rebate” means any consideration or thing of value paid,
credited, earned, received, retained, or recovered from a
pharmaceutical manufacturer by a pharmacy benefits manager in
connection with the purchase, dispensing, coverage, placement,
administration, or utilization of a prescription drug or other
covered product for a person covered under the state plan,
regardless of how such consideration is characterized. Rebate
includes, but is not limited to, base rebates, formulary rebates,
incentive rebates, credits, price protection payments, market-share
incentives, promotional allowances, commissions, educational grants,
market-share utilization payments, drug pull-through programs,
implementation allowances, clinical detailing payments, rebate
submission fees, administrative fees, management fees, rebate
contracting fees, contract aggregation payments, and any other
similar payment or remuneration. Rebate does not include pharmacy
purchase discounts and related service fees attributable to or based
on the purchase of drugs by specialty drug pharmacies;
6. “Remuneration” means anything of value, whether in cash or
in kind, paid, transferred, or provided to or for the benefit of a
PBM, or any affiliate or subcontractor of such PBM, in connection
with a prescription drug product or pharmacy benefit including, but
not limited to, rebates, discounts, price concessions,
administrative fees, services fees, data fees, network access fees,
market share fees, formulary placement fees, inflationary or price
protection payments, coupon or co-pay offset payments, dispensing or
transaction fees, reconciliation payments, and any other payments in
cash or credit regardless of characterization;
7. “State plan” means the self-insured plan provided pursuant
to the Oklahoma Employees Insurance Plan;
8. “Subcontractor” means any person or entity, other than an
employee of the PBM that performs, delegates, supports, or
administers any PBM function including claims processing, network
administration, rebate contracting or aggregation, formulary or
utilization management, mail or specialty pharmacy services,
auditing, pricing services, or data hosting, analytics, reporting,
or transmission whether under a written or oral agreement;
9. “Total net cost” means, for a stated measurement period, the
sum of all amounts paid by the state plan for covered prescription
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drugs including, but not limited to, all ingredient cost amounts,
dispensing fees, and any other amounts billed to the state plan and
all amounts paid by covered members for covered prescription drugs,
including co-payments, coinsurance, and deductible amounts, minus
all rebates and remuneration required to be passed through to the
state plan. Total net cost shall be calculated without regard to
the gross rebate volume or the list price of the drug; and
10. “Utilization management” means the same as defined in
Section 2562 of Title 63 of the Oklahoma Statutes.
SECTION 2. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 1330.2 of Title 74, unless there
is created a duplication in numbering, reads as follows:
A. Any pharmacy benefits manager (PBM) contract with a state
plan shall:
1. Declare state plan ownership of all plan-specific
operational data including, but not limited to, claims, pricing,
rebates, formulary, utilization management outputs, audit data, and
any such related reporting maintained by the PBM or any affiliate or
subcontractor of such PBM;
2. Provide that the state plan have broad audit rights and
shall determine designated auditors over any PBM and any affiliates
or subcontractors of such PBM to verify compliance with contract
provisions;
3. Establish network adequacy including rural access and
compliance with any applicable pharmacy choice and access rules
established by contract;
4. Provide that the state plan have exclusive authority over
formulary selection, tiering, preferred status, exclusions,
specialty designation, and utilization management of any provisions
of such contract. Nothing in this paragraph shall be construed to
prohibit the PBM from providing recommendations to the state plan
for formulary selection, tiering, preferred status, exclusions,
specialty designation, or utilization management; and
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5. Offer for inclusion in such contract, at the election of the
state plan, one or more set pricing guarantee methodologies for
covered outpatient drugs including, but not limited to, National
Average Drug Acquisition Cost (NADAC) plus a dispensing fee, maximum
allowable cost (MAC) pricing, or any objectively verifiable
benchmark approved by the state plan.
B. No PBM shall:
1. Modify criteria, add restrictions, or change placement of
drugs on a formulary without written authorization by the state plan
to make such changes;
2. Restrict or prohibit the state plan from requiring or
negotiating set pricing guarantees;
3. Include any plan design or incentive to steer any members of
the state plan to a pharmacy affiliated with such PBM unless such
plan design or incentive is authorized in writing by the state plan
after submission of an impact analysis established pursuant to
subsection A of Section 3 of this act;
4. Establish network terms or reimbursement methodologies that
are less favorable to nonaffiliated pharmacies than to affiliated
pharmacies;
5. Establish gag clauses limiting the state plan’s ability to
share contract terms, performance metrics, audit results, or cost
data with oversight entities, auditors, actuaries, or counsel. Any
contract terms shared pursuant to this paragraph shall be subject to
reasonable confidentiality; and
6. Establish contract provisions that create reimbursement or
network conditions that exclude specific pharmacies from the network
without documented and state plan-approved access and cost
justifications.
C. The PBM shall be required to disclose any affiliates or
subcontractors of such PBM to the state plan prior to the awarding
of a contract and shall disclose any additional affiliate or
subcontractor at no fewer than thirty (30) days after such affiliate
or subcontractor is associated with the PBM.
ENR. S. B. NO. 1447 Page 6
D. All rebates shall be passed through to the state plan and
shall be subject to audit by the state plan, including inspection of
manufacturer rebate contracts without redaction. Nothing in this
subsection shall be construed to require the pass-through of any
amounts authorized as fixed and separately stated administrative
fees to the state plan.
E. Any guarantees established by the contract between a PBM and
a state plan shall be determined by total net cost and access
outcomes and shall not be determined by rebate volume. Such
performance guarantees shall include clear remedies in the form of
credits payable by the plan for failure to comply with the
provisions of the contract.
F. A PBM shall:
1. Maintain System and Organization Controls (SOC) Type 2
certification for the duration of the contract with the state plan;
and
2. Provide to the state plan, all plan-specific operational
data and reporting in the form and medium prescribed by the plan
within the time frame established by the contract, or if not
specified, within five (5) business days of the state plan’s request
for then existing data, and within thirty (30) days after the close
of each month for monthly files and reports. Such PBM shall not
withhold or delay such data or charge any amount except for the
fixed administrative fee for extraction, access, interfaces,
licensing, or delivery, including any fees imposed by affiliates or
subcontractors of such PBM, and shall remain responsible for
compliance even if such data is held or processed by such affiliate
or subcontractor.
SECTION 3. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 1330.3 of Title 74, unless there
is created a duplication in numbering, reads as follows:
A. The pharmacy benefits manager (PBM) shall provide a written
impact analysis to the state plan prior to the state plan approving
any change to contract provisions, formularies, utilization
management criteria, network design, reimbursement methodologies, or
ENR. S. B. NO. 1447 Page 7
any plan design or incentive pursuant to paragraph 3 of subsection B
of Section 2 of this act. No change shall be implemented unless the
state plan authorizes in writing such change. Such impact analysis
shall include at minimum:
1. The total number of members impacted by each proposed
change;
2. The total net plan cost impact of each proposed change;
3. The member out-of-pocket impact of each proposed change;
4. The state plan cost impact of each proposed change; and
5. The pharmacy access impact of each proposed change,
including rural access impacts.
B. The PBM shall submit an electronic report in a form and
medium prescribed by the state plan that shall include for each
prescription drug claim itemized, claim-level reporting data
sufficient to validate the following:
1. The date of dispensing;
2. The National Drug Code (NDC);
3. The drug quantity;
4. The number of days’ supply;
5. The dispensing pharmacy identifier in the form of the
National Provider Identifier (NPI) and the National Council for
Prescription Drug Programs (NCPDP) Number;
6. If the dispensing pharmacy is affiliated with the PBM;
7. The final total payment received by the dispensing pharmacy
from all sources;
8. The ingredient cost paid to the dispensing pharmacy;
9. The final dispensing fee paid to the dispensing pharmacy;
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10. Any post-adjudication fees, withholds, recoupments,
incentives, or other adjustments applied to the claim;
11. The total gross amount billed to the state plan for the
claim;
12. The total gross amount billed to the state plan for the
drug’s ingredient cost;
13. The total gross amount billed to the state plan for the
dispensing fee;
14. The total net amount billed to the state plan for the
claim;
15. The total net amount billed to the state plan for the
drug’s ingredient cost;
16. The total net amount billed to the state plan for the
dispensing fee; and
17. All other amounts charged in connection with the claim.
C. Any contract term in violation of the provisions of this act
shall be voidable and severable at the election of the state plan.
Any violation of the provisions of this act may constitute a
material breach and may be grounds for termination for cause, in
addition to any other remedies available under contract or law.
D. Any request for proposal for PBM services for the state plan
shall include:
1. Bidder certification of compliance;
2. A compliance narrative; and
3. Sample contract language demonstrating compliance with the
provisions of this act.
ENR. S. B. NO. 1447 Page 9
SECTION 4. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 1330.4 of Title 74, unless there
is created a duplication in numbering, reads as follows:
In evaluating proposals for a contract between a pharmacy
benefits manager (PBM) and the state plan, the state plan may assign
favorable scoring or weighting to proposals based on factors in
addition to price including, but not limited to:
1. Accessibility and in-state presence, including the ability
of the PBM to provide regular in-person meetings with state
officials and the positive economic impact of the PBM’s operations
within this state, including employment, investment, and other
economic activity within this state;
2. Compliance history, including the PBM’s record of regulatory
actions, legal judgments, settlements, or enforcement actions
involving a state, self-insured plan, or governmental entity
relating to pharmacy reimbursement, claims processing, audit
practices, or other PBM business activities; and
3. Transparent pricing models, including the offering of a
flat-fee-per-claim-processed model or a per-member-per-month
administrative fee model that minimizes or eliminates spread pricing
and other undisclosed revenue streams.
SECTION 5. This act shall become effective November 1, 2026.
ENR. S. B. NO. 1447 Page 10
Passed the Senate the 26th day of March, 2026.
Presiding Officer of the Senate
Passed the House of Representatives the 28th day of April, 2026.
Presiding Officer of the House
of Representatives
OFFICE OF THE GOVERNOR
Received by the Office of the Governor this ____________________
day of ___________________, 20_______, at _______ o'clock _______ M.
By: _________________________________
Approved by the Governor of the State of Oklahoma this _________
day of ___________________, 20_______, at _______ o'clock _______ M.
_________________________________
Governor of the State of Oklahoma
OFFICE OF THE SECRETARY OF STATE
Received by the Office of the Secretary of State this __________
day of __________________, 20 _______, at _______ o'clock _______ M.
By: _________________________________