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An Act
ENROLLED SENATE
BILL NO. 773 By: Gollihare and Jech of the
Senate
and
Stinson of the House
An Act relating to pharmacy benefit managers;
amending 36 O.S. 2021, Sections 6960, as last amended
by Section 1, Chapter 306, O.S.L. 2024, 6962, as last
amended by Section 2, Chapter 306, O.S.L. 2024, 6965,
as last amended by Section 3, Chapter 306, O.S.L.
2024, and Section 3, Chapter 38, O.S.L. 2022, as last
amended by Section 4, Chapter 306, O.S.L. 2024 (36
O.S. Supp. 2024, Sections 6960, 6962, 6965, and
6966.1), which relate to definitions, compliance
review, and power, authority to investigate, examine,
and enforce, and violations, penalties, and hearings;
modifying definitions; prohibiting certain
circumstances; requiring nonpayment under providing
venue for certain court proceeding; allowing Attorney
General to obtain certain information; extending
certain duties; allowing certain request for a court
reporter; requiring certain refund of certain costs
by Attorney General; establishing certain fines and
penalties; updating statutory references; and
providing an effective date.
SUBJECT: Pharmacy benefit manager payments
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
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:
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Section 6960. A. For purposes of the Patient’s Right to
Pharmacy Choice Act:
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 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;
2. “Health insurer” means any corporation, association, benefit
society, exchange, partnership or individual licensed by the
Oklahoma Insurance Code;
3. “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;
4. “Mail-order pharmacy” means a pharmacy licensed by this
state that primarily dispenses and delivers covered drugs via common
carrier;
5. “Pharmacy benefits manager” or “PBM” means a person,
business, or other entity that performs pharmacy benefits
management. The term shall include any business or entity licensed
by the Insurance Department to perform PBM services, or 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;
6. “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
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manufacturers and providers. Pharmacy benefits management may
include any or all of the following services:
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. c. rebate contracting and administration;
7. “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;
8. “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. “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. “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. “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
12. “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.
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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:
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,
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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
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;
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8. Fail to make any payment due to a pharmacy or pharmacist for
covered services properly rendered in the event a PBM terminates its
contract with a plan sponsor or insurer;
9. Conduct or practice spread pricing, as defined in Section
6960 of this title, in this state; or
9. 10. Charge a pharmacist or pharmacy a fee related to
participation in a retail pharmacy network including, but not
limited to, the following:
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.
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
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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
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’ Programs’s 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;
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:
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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
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. AMENDATORY 36 O.S. 2021, Section 6965, as
last amended by Section 3, Chapter 306, O.S.L. 2024 (36 O.S. Supp.
2024, Section 6965), is amended to read as follows:
Section 6965. A. The Attorney General shall have power and
authority to examine and investigate the affairs of every pharmacy
benefits manager (PBM) engaged in pharmacy benefits management in
this state in order to determine whether such entity is in
compliance with the Patient’s Right to Pharmacy Choice Act, the
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Pharmacy Audit Integrity Act, and Sections 357 through 360 of Title
59 of the Oklahoma Statutes.
B. The Attorney General shall have the power and authority to
subpoena witnesses and records, whether prior to or during an
investigation or prosecution of a complaint, from any relevant
entity or persons to ensure compliance with 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.
C. All PBM files and records shall be subject to examination by
the Attorney General or by duly appointed designees. The Attorney
General, authorized employees and examiners shall have access to any
of a PBM’s files and records that may relate to a particular
complaint under investigation or to an inquiry or examination by the
Attorney General.
D. Every officer, director, employee or agent of the PBM, upon
receipt of any inquiry from the Attorney General, shall, within
twenty (20) days from the date the inquiry is sent, furnish the
Attorney General with an adequate response to the inquiry.
E. When making an examination under this section, the Attorney
General may retain subject matter experts, attorneys, appraisers,
independent actuaries, independent certified public accountants or
an accounting firm or individual holding a permit to practice public
accounting, certified financial examiners or other professionals and
specialists as examiners, the cost of which shall be borne by the
PBM that is the subject of the examination.
F. 1. Protected health information (PHI) held by a PBM shall
be provided at the request of the Attorney General for the purpose
of conducting investigations into potential violations of state laws
and regulations related to the PBM. Disclosure of protected health
information shall be limited to the extent necessary for the
investigation and enforcement of state law.
2. All disclosures of protected health information shall be
made in compliance with all applicable federal and state privacy
laws, including the Health Insurance Portability and Accountability
Act of 1996 (HIPAA), and other relevant laws protecting the privacy
and confidentiality of health information.
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3. Any protected health information obtained for an
investigation shall be handled and maintained per applicable federal
and state privacy laws and regulations, including HIPAA.
4. Unauthorized disclosure of protected health information
obtained during an investigation is strictly prohibited and subject
to legal penalties.
G. 1. If the Attorney General, after notice and opportunity
for hearing, finds that any PBM operating within this state has not
fully cooperated with an investigation or inquiry conducted by the
Attorney General related to compliance with 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, the Attorney
General may instruct the Insurance Commissioner that the PBM be
censured or his or her license be suspended or revoked. If the
Attorney General makes such instruction, the Commissioner shall
enforce the instructed action within thirty (30) days.
2. In addition to or in lieu of any censure, suspension, or
revocation by the Commissioner, the Attorney General may levy a
civil or administrative fine not less than One Hundred Dollars
($100.00) and not greater than Ten Thousand Dollars ($10,000.00) for
each violation of this subsection and assess any other penalty or
remedy authorized by this act section and Sections 6960, 6962,
6966.1, 6966.2, and 6967 of this title. For purposes of this
section, each day a PBM fails to comply with an investigation or
inquiry may be considered a separate violation.
H. The proper venue to compel compliance with a subpoena of a
person or entity under this section shall be in the Oklahoma County
District Court.
I. No provision of this state’s law shall be construed to
prohibit the Attorney General from obtaining any information or
documentation pertaining to prescription drug transactions
including, but not limited to, data, statements, testimonies,
contracts, communications, provider manuals, or any other
documentation or materials, whether related to discount programs,
loyalty programs, or otherwise. The duty to provide cooperation as
set forth in this section shall extend to all PBMs, insurers,
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auditors, employers, vendors, or any other individuals or entities
acting on behalf of or in collaboration with a PBM.
SECTION 4. AMENDATORY Section 3, Chapter 38, O.S.L.
2022, as last amended by Section 4, Chapter 306, O.S.L. 2024 (36
O.S. Supp. 2024, Section 6966.1), is amended to read as follows:
Section 6966.1. A. The Insurance Commissioner may censure,
suspend, revoke, or refuse to issue or renew a license of or levy a
civil penalty against any person licensed under the insurance laws
of this state for any violation of the Patient’s Right to Pharmacy
Choice Act, Section 6958 et seq. of this title.
B. 1. If the Attorney General finds, after notice and
opportunity for hearing, that a pharmacy benefits manager (PBM)
violated one or more provisions of the Patient’s Right to Pharmacy
Choice Act, the Pharmacy Audit Integrity Act or the provisions of
Sections 357 through 360 of Title 59 of the Oklahoma Statutes, the
Attorney General may instruct the Insurance Commissioner that the
PBM be censured or his or her license be suspended or revoked. If
the Attorney General makes such instruction, the Commissioner shall
enforce such action within thirty (30) days.
2. In addition to or in lieu of any censure or suspension or
revocation of a license by the Commissioner, the Attorney General
may levy a civil or administrative fine not less than One Hundred
Dollars ($100.00) and not greater than Ten Thousand Dollars
($10,000.00) for each violation of the provisions of the Patient’s
Right to Pharmacy Choice Act, the Pharmacy Audit Integrity Act or
the provisions of Sections 357 through 360 of Title 59 of the
Oklahoma Statutes.
3. The Attorney General may order restitution for economic loss
suffered by pharmacies or patients for violations of the Patient’s
Right to Pharmacy Choice Act, the Pharmacy Audit Integrity Act, or
the provisions of Sections 357 through 360 of Title 59 of the
Oklahoma Statutes.
C. Notwithstanding whether the license of a PBM has been
issued, suspended, revoked, surrendered or lapsed by operation of
law, the Attorney General is hereby authorized to enforce the
provisions of the Patient’s Right to Pharmacy Choice Act and impose
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any penalty or remedy authorized under the act against a PBM under
investigation for or charged with a violation of the Patient’s Right
to Pharmacy Choice Act, the Pharmacy Audit Integrity Act, the
provisions of Sections 357 through 360 of Title 59 of the Oklahoma
Statutes or any provision of the insurance laws of this state.
D. Each day that a PBM conducts business in this state without
a license from the Insurance Department shall be deemed a violation
of the Patient’s Right to Pharmacy Choice Act.
E. 1. All hearings conducted by the Office of the Attorney
General pursuant to this section shall be public and held in
accordance with the Administrative Procedures Act.
2. Hearings shall be held at the Office of the Attorney General
or any other place the Attorney General may deem convenient.
3. The Attorney General, upon written request from a PBM
affected by the hearing, shall cause a full stenographic record of
the proceedings to be made by a competent court reporter. This
record shall be at the expense of the PBM. The Attorney General may
request a court reporter without a request from a PBM, which shall
be at the cost of the Office of the Attorney General unless the
Attorney General is the prevailing party in litigation following a
final order.
4. The ordinary fees and costs of the hearing examiner
appointed pursuant to Section 319 of this title may be assessed by
the hearing examiner against the respondent unless the respondent is
the prevailing party.
F. 1. Any PBM whose license has been censured, suspended,
revoked, or denied renewal, or who has had monetary damages or a
fine levied against him or her shall have the right of appeal from
the final order of the Attorney General, pursuant to Section 318 et
seq. of Title 75 of the Oklahoma Statutes.
2. Any monetary damages, administrative fines, or court costs
owed by the PBM resulting from any appeal of a final order of the
Attorney General pursuant to Section 318 of Title 75 of the Oklahoma
Statutes shall be placed in a holding account with the Office of the
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Attorney General within thirty (30) days of the issuance of the
final order.
3. If the PBM prevails on every issue raised in the appeal of a
final order of the Attorney General pursuant to Section 318 of Title
75 of the Oklahoma Statutes, the Attorney General shall refund all
monies related to the appeal at issue and paid by the PBM within
sixty (60) days of the expiration of the appeal deadlines for the
Office of the Attorney General.
4. Any instance in which a PBM fails to pay monies owed as a
result of a final order or an appeal of a final order within thirty
(30) days of the issuance of the final order shall be considered a
separate violation of the provisions of Sections 6958 through 6969
of this title and Sections 356 through 356.5 and 357 through 360 of
Title 59 of the Oklahoma Statutes.
5. The PBM shall be assessed a fine of Ten Thousand Dollars
($10,000.00) per calendar day for each day the PBM fails to comply
with this section.
6. A PBM that fails to comply with this section for more than
six (6) months shall have its license to operate in this state
suspended for the duration of time it takes the PBM to comply with
this section.
G. If the Attorney General determines, based upon an
investigation of complaints, that a PBM has engaged in violations of
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 with such frequency as to indicate a
general business practice, and that the PBM should be subjected to
closer supervision with respect to those practices, the Attorney
General may require the PBM to file a report at any periodic
interval the Attorney General deems necessary.
H. 1. The Attorney General shall have the authority to collect
all fines, penalties, restitution, and interest thereon pursuant to
the provisions of the Patient’s Right to Pharmacy Choice Act, the
Pharmacy Audit Integrity Act, and the provisions of Sections 357
through 360 of Title 59 of the Oklahoma Statutes, or any other
charge, cause of action, prelitigation settlement, or other
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settlement that requires the recovery of money as a result of
violations of the Patient’s Right to Pharmacy Choice Act. Funds
collected by the Attorney General pursuant to 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 shall be
deposited into the Attorney General’s Pharmacy Benefits Manager
Enforcement Revolving Fund created in Section 5 of this act 6966.2
of this title.
2. Costs of investigation, litigation, attorney fees, and other
expenses incurred shall be retained by the Office of the Attorney
General. Remaining funds shall be distributed to pharmacists,
patients, or other injured parties as determined by the Attorney
General.
3. The Attorney General shall promulgate rules for the
distribution of funds pursuant to this subsection.
SECTION 5. This act shall become effective November 1, 2025.
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Passed the Senate the 25th day of March, 2025.
Presiding Officer of the Senate
Passed the House of Representatives the 5th day of May, 2025.
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: _________________________________