Pharmacy Benefits Managers - Trade Practices

2025-2026 Bill 4794: Pharmacy Benefits Managers - Trade Practices - South Carolina Legislature Online

South Carolina General Assembly
126th Session, 2025-2026
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H. 4794
STATUS INFORMATION
General Bill
Sponsors: Reps. Sessions, Schuessler, Davis, B.L. Cox, Lawson, C. Mitchell, Pope, Kilmartin, White, Guest, Taylor, Pedalino and McCabe
Document Path: LC-0494WAB26.docx
Introduced in the House on January 13, 2026
Currently residing in the House
Summary: Pharmacy Benefits Managers - Trade Practices
HISTORY OF LEGISLATIVE ACTIONS

Date

Body

Action Description with journal page number

12/16/2025

House

Prefiled

12/16/2025

House

Referred to Committee on
Labor, Commerce and Industry

1/13/2026

House

Introduced and read first time (
House Journal-page 93
)

1/13/2026

House

Referred to Committee on
Labor, Commerce and Industry
(
House Journal-page 93
)

1/14/2026

House

Member(s) request name added as sponsor: Kilmartin

1/20/2026

House

Member(s) request name added as sponsor: White

1/21/2026

House

Member(s) request name added as sponsor: Guest

2/3/2026

House

Member(s) request name added as sponsor: Taylor

2/10/2026

House

Member(s) request name added as sponsor:
Pedalino, McCabe

View the latest
legislative information
at the website
VERSIONS OF THIS BILL
12/17/2025

A bill

TO AMEND THE SOUTH CAROLINA CODE OF LAWS BY AMENDING
SECTION
38-71-2200
, RELATING TO DEFINITIONS CONCERNING PHARMACY BENEFITS
MANAGERS, SO AS TO DEFINE NECESSARY TERMS; AND BY AMENDING SECTION
38-71-2230
,
RELATING TO PROHIBITED ACTIONS OF PHARMACY BENEFITS MANAGERS, SO AS TO PROHIBIT
PATIENT STEERING AND CERTAIN OTHER TRADE PRACTICES.

B
e it enacted by the
General Assembly of the State of South Carolina:

S
ECTION 1.
S
ection
38-71-2200
of the S.C. Code is amended by
adding:

(
14) "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.

S
ECTION 2.
S
ection
38-71-2200
(13) of the S.C. Code is amended to
read:

(
13) "Specialized delivery drug"
means a prescription drug that meets a majority of the following criteria, as
set forth by the manufacturer, FDA, or other applicable law or regulatory body
and:

(
a)
requires special handling or storage;

(
b)
requires complex and extended patient education or counseling;

(
c)
requires intensive monitoring;

(
d)
requires clinical oversight;
or

(
e)
requires product support services; and the drug is used to treat chronic and
complex, or rare medical conditions:

(
i)
that can be progressive; or

(
ii)
that can be debilitating or fatal if left untreated or undertreated
.
;

(
f) exceeds a cost threshold
established by the South Carolina Department of Insurance; or

(
g) treats rare, chronic, or complex
medical conditions including, but not limited to, cancer, rheumatoid arthritis,
multiple sclerosis, or rare genetic disorders.

S
ECTION 3.
S
ection
38-71-2230
of the S.C. Code is amended by
adding:

(
I)
(
1) A pharmacy benefits manager in
South Carolina is prohibited from doing any of the following:

(
a)
committing any unfair and deceptive trade practice prohibited by the South
Carolina Unfair Trade Practices Act;

(
b)
performing any act that violates the duties, obligations, and responsibilities
imposed under this chapter on a pharmacy benefits manager;

(
c)
buying, selling, transferring, or providing personal healthcare or contact
information of any beneficiary to any other party for any purpose with one
exception. A pharmacy benefits manager may provide such information regarding
beneficiaries of a health plan to that health plan provider if requested by the
health plan provider;

(
d)
conducting or participating in spread pricing;

(
e)
directly or indirectly engaging in patient steering to a pharmacy in which the
pharmacy benefits manager maintains an ownership interest or control without
making a written disclosure and receiving acknowledgment from the patient. The
disclosure required by this subitem must provide notice that the pharmacy
benefits manager has an ownership interest in or control of the pharmacy, and
that the patient has the right under the law to use any alternate pharmacy that
he chooses. The pharmacy benefits manager is prohibited from retaliation or
further attempts to influence the patient, or treat the patient or the
patient's claim any differently if the patient chooses to use the alternate
pharmacy. The provisions of this subitem do not apply to employers, unions,
associations, or other persons who employ, own, operate, control, or contract
directly with a pharmacy or pharmacist for the purpose of managing or
controlling prescription costs paid for the benefit of an employee or member or
those covered by the employee or member's plan, or when the persons contract
with a pharmacy benefits manager to steer employees or members to pharmacists
or pharmacies which the person owns, operates, or controls;

(
f)
penalizing a beneficiary or providing an inducement to the beneficiary for the
purpose of getting the beneficiary to use specific retail, mail-order pharmacy,
or another network pharmacy provider in which a pharmacy benefits manager has
an ownership or controlling interest or that has an ownership or controlling
interest in a pharmacy benefits manager. For purposes of this subitem,
"inducement" means the providing of financial incentives, including variations
in premiums, deductibles, copayments, or coinsurance. The provisions of this
subitem do not apply to employers, unions, associations, or other persons who
employ, own, operate, control, or contract directly with a pharmacy or
pharmacist for the purpose of managing or controlling prescription costs paid
for the benefit of an employee or member or those covered by the employee or
member's plan, or when the persons contract with a pharmacy benefits manager to
steer employees or members to pharmacists or pharmacies which the person owns,
operates, or controls;

(
g)
retroactively denying or reducing a claim of a pharmacist or pharmacy for
payment or demand repayment of all or part of a claim after the claim has been
paid, in part or in full, by the pharmacy benefits manager;

(
h)
reimbursing a local pharmacist or local pharmacy less than the amount it
reimburses chain pharmacies, mail-order pharmacies, specialty pharmacies, or
affiliates of the pharmacy benefits manager for the same drug or device or for
the same pharmacy service in this State;

(
i)
failing to publicly update maximum allowable cost lists as required by Section
38-71-2240
(B)(2);

(
j)
failing to honor maximum allowable cost (MAC) prices as set forth in Section
38-71-2240
; A pharmacy benefits manager may not require a pharmacist or
pharmacy to purchase drugs from any particular wholesaler. However, if a
pharmacy benefits manager recommends or provides a wholesaler, then that
wholesaler must be willing and able to honor the pharmacy benefits manager's
MAC price, ship the order, and have receipt of the order within two business
days with no additional charge to the pharmacist. The wholesaler with the
lowest price, which is listed as the MAC price, is not obligated to sell or
ship to a nonmember pharmacist or pharmacy. If the wholesaler chooses not to
sell the drug to the pharmacist or pharmacy, then the MAC price set by the
pharmacy benefits manager must be adjusted to the price available to the
pharmacist or pharmacy through another wholesaler;

(
k)
failing to meet the payment standards established in this article;

(
l)
failing to provide detailed remittance advice to pharmacists and pharmacies;

(
m)
failing to pay any state or local sales tax imposed on any drug, device, or
pharmacy services or to remit the sales tax to the appropriate pharmacist or
pharmacy for the tax proceeds to be forwarded to the sales tax authority. A
pharmacy benefits manager who does not pay the sales tax is liable to the
taxing authority for the tax, interest, penalties, and any other fees or costs
imposed by law for failure to pay sales taxes. No pharmacy benefits manager may
deduct the taxes from any amount due to a pharmacist or pharmacy for a drug,
device, or pharmacy service or charge or pay anyone a fee or surcharge for
paying any sales tax or remitting any sales tax proceeds to a pharmacist or
pharmacy if that fee or surcharge would be imposed directly or indirectly on
the pharmacist or pharmacy. A pharmacy benefits manager who pays any
out-of-state pharmacist or pharmacy for drugs or devices shipped to a
beneficiary in this State or for pharmacy services rendered to a beneficiary
that is taxable in this State shall remit the tax directly to the appropriate
taxing authority. A pharmacist or pharmacy that does not receive sales tax
proceeds from a pharmacy benefits manager for any drug, device, or pharmacy
service subject to sales taxes has no responsibility for payment of the taxes
if the pharmacist or pharmacy provides written notification to the appropriate
taxing authority, the Department of Insurance, and the Board of Pharmacy of the
pharmacy benefits manager's failure to remit the sales taxes at the time the next
sales tax return is due to be filed. State or local sales taxes and other
applicable state-imposed taxes or fees must be considered as part of the
allowable cost and shall be included in the claim submitted by a pharmacist or
pharmacy;

(
n)
restricting early refills on maintenance drugs to an amount less than seven
days for a prescription of at least a thirty-day supply. However, at the
direction of the Department of Health and Human Services, for purposes of
administering the Medicaid pharmacy benefits program, a pharmacy benefits
manager may apply a more restrictive early refill policy without violating the
provisions of this subsection;

(
o)
requiring a beneficiary to follow a plan's step-therapy protocol if the
prescribed drug is on the health plan's prescription drug formulary, the
beneficiary has tried the step-therapy-required prescription drug while under
his current or previous health plan, and the provider has submitted a
justification and supporting clinical documentation that such prescription drug
was discontinued due to lack of efficacy or effectiveness, diminished effect,
or an adverse effect or event;

(
p)
delaying a decision on a request for authorization to dispense a prescription
drug for more than seventy-two hours, or twenty-four hours in exigent
circumstances in which the patient, in the opinion of the prescribing provider,
pharmacy, or pharmacist submitting the authorization request, is suffering from
a health condition that may seriously jeopardize the patient's life, health, or
ability to regain maximum function. A request for authorization must include
relevant data or appropriate documentation to render a decision on a request
for authorization;

(
q)
exploiting prescription drug information obtained from beneficiaries for
monetary gain or economic power over beneficiaries, pharmacists, or pharmacies;

(
r)
selling, exchanging, or using in any manner prescription drug information
regarding a beneficiary obtained through a beneficiary's use of a prescription
for purposes of marketing, solicitation, consumer steering, referral, or any
other practice or act, except as otherwise provided for in this subsection,
that provides the pharmacy benefits manager or any of its affiliates or
subsidiaries economic power or control over pharmacists or pharmacies or
interferes in the free choice of a beneficiary;

(
s)
engaging in drug repackaging and markups. A pharmacy benefits manager that owns
or controls a mail-order pharmacy may not allow the mail-order pharmacy to
repackage drugs and sell the repackaged items at higher prices than the
original average wholesale price unless beneficiaries who may buy the
repackaged drugs are informed in writing that the drugs have been repackaged
and are being sold at the higher price;

(
t)
conducting business or otherwise operating in this State without being:

(
i) registered with and in good
standing with the South Carolina Secretary of State to do business in this
State; and

(
ii) licensed by and in good
standing with the Department of Insurance.

(
2)
(
a) An enrollee's defined cost
sharing for a prescription drug must be calculated at the point-of-sale based
on a price that is reduced by an amount equal to at least one hundred percent
of all rebates received, or to be received, in connection with the dispensing
or administration of the prescription drug.

(
b)
This item may not be construed to preclude a healthcare insurer from decreasing
an enrollee's defined cost sharing by an amount greater than that required
under subitem (a).

(
c)
In implementing the requirements of this item, the state may only regulate a
healthcare insurer to the extent permissible under applicable law.

(
d)
(
i) In complying with this section, a
healthcare insurer or its agents shall provide the enrollee with a
transactional history of the applied rebate beginning with the pharmaceutical
or pharmaceutical product's manufacturer and ending with the enrollee or final
consumer.

(
ii) The actual amount of a rebate
received or remitted by any party in the transactional history stated in sub-subitem
(i) may not be considered a trade secret or proprietary information.

(
iii) A healthcare insurer shall
impose the confidentiality protections of this section on any vendor or
downstream third party that performs healthcare or administrative services on
behalf of the healthcare insurer that may receive or have access to rebate
information.

(
3)
(
a) The commission of any of the acts
or any combination of acts prohibited by items (1) or (2) must be considered an
unfair method of competition and unfair practice or act in accordance with the
South Carolina Unfair Trade Practices Act if the violations are committed or
performed with such frequency as to indicate a general business practice.

(
b)
For purposes of this subsection, a violation must be considered to have
occurred each time a prohibited act is committed.

(
c)
Each day that a pharmacy benefits manager operates without being registered
with and in good standing with the Secretary of State to do business in this
State or without being licensed by and in good standing with the Department of
Insurance must be considered a separate violation.

(
4)
Nothing in this subsection may be construed to:

(
a)
interfere with or violate a consumer's right to know where the consumer may
have access to the lowest cost drugs, whether a consumer is using insurance or
other third-party reimbursement or not; or

(
b)
interfere with the requirement that consumers receive notice of changes to
pharmacy networks, such as the inclusion of new pharmacies or removal of
existing pharmacies from networks.

S
ECTION 4. This act takes effect upon approval
by the Governor.

----XX----

This web page was last updated on January 13, 2026 at 2:41 PM