Stricken language would be deleted from and underlined language would be added to present law.
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State of Arkansas 1
95th General Assembly A Bill 2
Regular Session, 2025 SENATE BILL 475 3
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By: Senator J. Dismang 5
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For An Act To Be Entitled 8
AN ACT TO ESTABLISH THE PHARMACY SERVICES 9
ADMINISTRATIVE ORGANIZATION ACT; TO REGULATE PHARMACY 10
SERVICES ADMINISTRATIVE ORGANIZATIONS; AND FOR OTHER 11
PURPOSES. 12
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Subtitle 15
TO ESTABLISH THE PHARMACY SERVICES 16
ADMINISTRATIVE ORGANIZATION ACT; AND TO 17
REGULATE PHARMACY SERVICES 18
ADMINISTRATIVE ORGANIZATIONS. 19
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BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS: 21
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SECTION 1. Arkansas Code Title 23, Chapter 99, is amended to add an 23
additional subchapter to read as follows: 24
Subchapter 19 — Pharmacy Services Administrative Organization Act 25
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23-99-1901. Title. 27
This subchapter shall be known and may be cited as the "Pharmacy 28
Services Administrative Organization Act". 29
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23-99-1902. Definitions. 31
As used in this subchapter: 32
(1)(A) "Administrative services" means a service provided by a 33
pharmacy services administrative organization. 34
(B) "Administrative services" includes without limitation: 35
(i) Assistance with a claim; 36 SB475
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(ii) Assistance with an audit; 1
(iii) Assistance with access to a pharmacy network; 2
(iv) Assistance with interactions between a pharmacy 3
and a pharmacy benefits manager; 4
(v) Centralized payment; 5
(vi) Certification in a specialized care program; 6
(vii) Compliance support; 7
(viii) Setting a flat fee for generic drugs; 8
(ix) Assistance with store layout; 9
(x) Marketing support; 10
(xi) Management and analysis of payment and drug 11
dispensing data; or 12
(xii) Provision of resources for a retail cash card; 13
(2) "Pharmacy benefits manager" means a person or an entity 14
operating within this state that contracts with a health benefit plan, an 15
employer, or a union to administer or manage prescription drug benefits on 16
behalf of a healthcare insurer that provides prescription drug benefits; 17
(3)(A) "Pharmacy services administrative organization" means an 18
entity operating within this state that contracts with one (1) or more 19
independent pharmacies to conduct business on their behalf with a third -party 20
payer. 21
(B) "Pharmacy services administrative organization" 22
includes a person or entity that performs one (1) or more administrative 23
services on behalf of one (1) or more pharmacies and negotiates and enters a 24
contract with a third -party payer or pharmacy benefits manager on behalf of a 25
pharmacy; 26
(4) "Pharmacy services administrative organization -pharmacy 27
contract" means a contractual agreement between a pharmacy services 28
administrative organization and an independent pharmacy by which a pharmacy 29
services administrative organization agrees to negotiate with a third -party 30
payer on behalf of an independent pharmacy and to provide other services as 31
stated in the pharmacy services administrative organization -pharmacy 32
contract; and 33
(5)(A) "Third-party payer" means an organization operating 34
within this state that pays or insures health, medical, or prescription drug 35
expenses on behalf of beneficiaries. 36 SB475
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(B) "Third-party payer" includes a: 1
(i) Plan sponsor; 2
(ii) Healthcare service plan; 3
(iii) Health maintenance organization; or 4
(iv) Healthcare insurer. 5
(C) "Third-party payer" does not include a nonfederal 6
governmental plan as defined in 29 U.S.C. § 1002(32), as it existed on 7
January 1, 2025. 8
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23-99-1903. Registration required. 10
(a)(1) A person or organization shall not establish or operate as a 11
pharmacy services administrative organization in Arkansas for health benefit 12
plans without obtaining a license from the Insurance Commissioner under this 13
subchapter. 14
(2) The commissioner shall prescribe the application for a 15
license to operate in Arkansas as a pharmacy services administrative 16
organization and may charge application fees and renewal fees as established 17
by rule. 18
(b) The commissioner shall issue rules establishing the licensing, 19
fees, application, financial standards, penalties, compliance and enforcement 20
requirements, and reporting requirements of a pharmacy services 21
administrative organization under this subchapter. 22
(c) This subchapter does not require a third -party payer to enter a 23
contract with a pharmacy services administrative organization. 24
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23-99-1904. Notice and disclosure requirements. 26
(a) A pharmacy services administrative organization -pharmacy contract 27
shall include a provision that requires a pharmacy services administrative 28
organization to provide to an independent pharmacy a copy of the pharmacy 29
services administrative organization -pharmacy contract, amendment, payment 30
schedule, or reimbursement rates within three (3) calendar days after the 31
execution of a pharmacy services administrative organization -pharmacy 32
contract, or an amendment to a pharmacy services administrative organization -33
pharmacy contract, signed on behalf of the independent pharmacy. 34
(b) A pharmacy services administrative organization shall disclose to 35
the State Insurance Department the extent of any ownership or control of the 36 SB475
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pharmacy services administrative organization by a parent company, 1
subsidiary, or other organization that: 2
(1) Provides pharmacy services or support; 3
(2) Provides prescription drug or device services; or 4
(3) Manufactures, sells, or distributes prescription drugs, 5
biologicals, or medical devices. 6
(c) A pharmacy services administrative organization shall notify the 7
department in writing within five (5) calendar days of any material change in 8
its ownership or control relating to any company, subsidiary, or other 9
organization described in subsection (b) of this section. 10
(d)(1) Before entering into a pharmacy services administrative 11
organization-pharmacy contract, a pharmacy services administrative 12
organization shall disclose to an independent pharmacy a written disclosure 13
of ownership or control in order to assist the independent pharmacy in making 14
an informed decision regarding its relationship with the pharmacy services 15
administrative organization. 16
(2) The disclosure required under subdivision (d)(1) of this 17
section shall include the extent of any ownership or control by a parent 18
company, subsidiary, or other organization that: 19
(A) Provides pharmacy services or support; 20
(B) Provides prescription drug or device services; or 21
(C) Manufactures, sells, or distributes prescription 22
drugs, biologicals, or medical devices. 23
(e) A pharmacy services administrative organization -pharmacy contract 24
shall provide that the pharmacy services administrative organization shall 25
notify the independent pharmacy in writing within five (5) calendar days of 26
any material change in its ownership or control related to any company, 27
subsidiary, or other organization described in subdivision (d)(1) of this 28
section. 29
(f)(1) Before entering into a contract with a third -party payer, a 30
pharmacy services administrative organization shall furnish to a pharmacy 31
benefits manager or a third -party payer a written disclosure of ownership or 32
control in order to assist the pharmacy benefits manager or the third -party 33
payer in making an informed decision regarding the pharmacy benefits 34
manager's or the third -party payer's relationship with the pharmacy services 35
administrative organization and the independent pharmacy or pharmacies for 36 SB475
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which the pharmacy services administrative organization is negotiating. 1
(2) The disclosure required under subdivision (f)(1) of this 2
section shall include the extent of any ownership or control by any parent 3
company, subsidiary, or other organization that: 4
(A) Provides pharmacy services or support; 5
(B) Provides prescription drug or device services; or 6
(C) Manufactures, sells, or distributes prescription 7
drugs, biologicals, or medical devices. 8
(g) A pharmacy services administrative organization -pharmacy contract 9
with a third-party payer shall require that a pharmacy services 10
administrative organization shall notify the third -party payer in writing 11
within five (5) calendar days of any material change in its ownership or 12
control related to any company, subsidiary, or other organization described 13
in subdivision (f)(1) of this section. 14
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23-99-1905. Accounting — Audits — Timely transmission of remittance — 16
Reporting patient cost sharing assistance. 17
(a) A contract between a pharmacy benefits manager and a pharmacy 18
services administrative organization under which the pharmacy benefits 19
manager has the right or obligation to conduct an audit of an independent 20
pharmacy shall contain specific language that permits the pharmacy benefits 21
manager to obtain information from the pharmacy services administrative 22
organization in connection with the pharmacy benefits manager’s audit of an 23
independent pharmacy. 24
(b) A pharmacy services administrative organization -pharmacy contract 25
shall provide that a remittance for a claim submitted by a pharmacy benefits 26
manager or third-party payer on behalf of a pharmacy to the pharmacy services 27
administrative organization shall be passed through by the pharmacy services 28
administrative organization to the independent pharmacy within a reasonable 29
amount of time, established in the pharmacy services administrative 30
organization-pharmacy contract, after receipt of the remittance by the 31
pharmacy services administrative organization from a pharmacy benefits 32
manager or third-party payer. 33
(c)(1) A pharmacy services administrative organization that provides, 34
accepts, or processes a discount, concession, or product voucher to reduce, 35
directly or indirectly, a covered person’s out -of-pocket expense for the 36 SB475
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order, dispensing, substitution, sale, or purchase of a prescription drug 1
shall provide to the State Insurance Department an annual report, available 2
for public audit. 3
(2) The annual report required under subdivision (c)(1) of this 4
section shall include an aggregate total of: 5
(A) All transactions by the independent pharmacy; and 6
(B) Any payments received by a pharmacy services 7
administrative organization itself for providing, processing, or accepting a 8
discount, concession, or product voucher on behalf of an independent 9
pharmacy. 10
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23-99-1906. Wholesale and pharmacy services administrative 12
organization services — Single pharmacy services administrative organization -13
pharmacy contract. 14
(a) A pharmacy services administrative organization that owns or is 15
owned by, in whole or in part, an entity that manufactures, sells, or 16
distributes prescription drugs, biologicals, or medical devices, as a 17
condition of entering into a pharmacy services administrative organization -18
pharmacy contract, shall not require that the independent pharmacy purchase 19
any drugs or medical devices solely from the entity with which the pharmacy 20
services administrative organization has an ownership interest or from an 21
entity with an ownership interest in the pharmacy services administrative 22
organization. 23
(b) A pharmacy services administrative organization that owns or is 24
owned by, in whole or in part, an entity that manufactures, sells, or 25
distributes prescription drugs, biologicals, or medical devices shall 26
disclose to the State Insurance Department any agreement with an independent 27
pharmacy in which the independent pharmacy purchases prescription drugs, 28
biologicals, or medical devices from a pharmacy services administrative 29
organization or from an entity that owns or is owned by, in whole or in part, 30
the pharmacy services administrative organization. 31
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23-99-1907. Notice of appeals. 33
(a) A pharmacy services administrative organization -pharmacy contract 34
shall provide that if there is a dispute between an independent pharmacy and 35
a pharmacy benefits manager or a third -party payer, the pharmacy services 36 SB475
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administrative organization shall ensure and facilitate timely communication 1
from the independent pharmacy to the pharmacy benefits manager or the third -2
party payer. 3
(b) A pharmacy services administrative organization -pharmacy contract 4
shall provide that the pharmacy services administrative organization shall 5
forward a notice of appeal from an independent pharmacy to the pharmacy 6
benefits manager or the third -party payer in a timely manner. 7
(c) If an appeal does not meet the minimum requirements described in 8
the pharmacy services administrative organization -pharmacy contract, the 9
pharmacy services administrative organization shall: 10
(1) Provide the pharmacy with the reason for the denial of the 11
appeal; and 12
(2) Allow the pharmacy to resubmit the appeal for a review by a 13
pharmacy benefits manager. 14
(d) In connection with an appeal or similar process under § 17 -92-507, 15
a third-party payer's or pharmacy benefits manager’s notice or provision of 16
information to a pharmacy services administrative organization is deemed to 17
be notice or provision of information to the pharmacy on whose behalf the 18
pharmacy services administrative organization has contracted. 19
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23-99-1908. Enforcement. 21
(a) The Insurance Commissioner shall enforce this subchapter. 22
(b)(1) The commissioner may examine or audit the books and records of 23
a pharmacy services administrative organization providing claims 24
administrative services for a pharmacy to determine if the pharmacy services 25
administrative organization is in compliance with this subchapter. 26
(2) The information or data acquired during an examination under 27
subdivision (b)(1) of this section is: 28
(A) Considered proprietary and confidential under §§ 23 -29
61-107(a)(4) and 23-61-207; and 30
(B) Not subject to the Freedom of Information Act of 1967, 31
§ 25-19-101 et seq. 32
(c) After notice and opportunity for hearing, the commissioner may: 33
(1) Impose a civil penalty of up to five thousand dollars 34
($5,000) per violation against a pharmacy services administrative 35
organization if the commissioner finds that the pharmacy services 36 SB475
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administrative organization has violated this subchapter; or 1
(2) Revoke or suspend the license of a pharmacy services 2
administrative organization . 3
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