Stricken language would be deleted from and underlined language would be added to present law.
Act 773 of the Regular Session
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State of Arkansas As Engrossed: S3/19/25 S4/2/25 1
95th General Assembly A Bill 2
Regular Session, 2025 SENATE BILL 475 3
4
By: Senator J. Dismang 5
By: Representative Eaves 6
7
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
13
14
Subtitle 15
TO ESTABLISH THE PHARMACY SERVICES 16
ADMINISTRATIVE ORGANIZATION ACT; AND TO 17
REGULATE PHARMACY SERVICES 18
ADMINISTRATIVE ORGANIZATIONS. 19
20
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 As Engrossed: S3/19/25 S4/2/25 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
pharmacies to conduct business on their behalf with a third -party payer. 20
(B) "Pharmacy services administrative organization" 21
includes a person or entity that performs one (1) or more administrative 22
services on behalf of one (1) or more pharmacies and negotiates and enters a 23
contract with a third -party payer or pharmacy benefits manager on behalf of a 24
pharmacy; 25
(4) "Pharmacy services administrative organization -pharmacy 26
contract" means a contractual agreement between a pharmacy services 27
administrative organization and a pharmacy by which a pharmacy services 28
administrative organization agrees to negotiate with a third -party payer on 29
behalf of a pharmacy and to provide other services as stated in the pharmacy 30
services administrative organization -pharmacy contract; and 31
(5)(A) "Third-party payer" means an organization operating 32
within this state that pays or insures health, medical, or prescription drug 33
expenses on behalf of beneficiaries. 34
(B) "Third-party payer" includes a: 35
(i) Plan sponsor; 36 As Engrossed: S3/19/25 S4/2/25 SB475
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(ii) Healthcare service plan; 1
(iii) Health maintenance organization; or 2
(iv) Healthcare insurer. 3
(C) "Third-party payer" does not include a nonfederal 4
governmental plan as defined in 29 U.S.C. § 1002(32), as it existed on 5
January 1, 2025. 6
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23-99-1903. Registration required. 8
(a)(1) A person or organization shall not establish or operate as a 9
pharmacy services administrative organization in Arkansas for health benefit 10
plans without obtaining a license from the Insurance Commissioner under this 11
subchapter. 12
(2) The commissioner shall prescribe the application for a 13
license to operate in Arkansas as a pharmacy services administrative 14
organization and may charge application fees and renewal fees as established 15
by rule. 16
(b) The commissioner shall issue rules establishing the licensing, 17
fees, application, financial standards, penalties, compliance and enforcement 18
requirements, and reporting requirements of a pharmacy services 19
administrative organization under this subchapter. 20
(c) This subchapter does not require a third -party payer to enter a 21
contract with a pharmacy services administrative organization. 22
23
23-99-1904. Notice and disclosure requirements. 24
(a) A pharmacy services administrative organization -pharmacy contract 25
shall include a provision that requires a pharmacy services administrative 26
organization to provide to a pharmacy a copy of the pharmacy services 27
administrative organization -pharmacy contract, amendment, payment schedule, 28
or reimbursement rates within three (3) calendar days after the execution of 29
a pharmacy services administrative organization -pharmacy contract, or an 30
amendment to a pharmacy services administrative organization -pharmacy 31
contract, signed on behalf of the pharmacy. 32
(b) A pharmacy services administrative organization shall disclose to 33
the State Insurance Department the extent of any ownership or control of the 34
pharmacy services administrative organization by a parent company, 35
subsidiary, or other organization that: 36 As Engrossed: S3/19/25 S4/2/25 SB475
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(1) Provides pharmacy services or support; 1
(2) Provides prescription drug or device services; or 2
(3) Manufactures, sells, or distributes prescription drugs, 3
biologicals, or medical devices. 4
(c) A pharmacy services administrative organization shall notify the 5
department in writing within five (5) calendar days of any material change in 6
its ownership or control relating to any company, subsidiary, or other 7
organization described in subsection (b) of this section. 8
(d)(1) Before entering into a pharmacy services administrative 9
organization-pharmacy contract, a pharmacy services administrative 10
organization shall disclose to a pharmacy a written disclosure of ownership 11
or control in order to assist the pharmacy in making an informed decision 12
regarding its relationship with the pharmacy services administrative 13
organization. 14
(2) The disclosure required under subdivision (d)(1) of this 15
section shall include the extent of any ownership or control by a parent 16
company, subsidiary, or other organization that: 17
(A) Provides pharmacy services or support; 18
(B) Provides prescription drug or device services; or 19
(C) Manufactures, sells, or distributes prescription 20
drugs, biologicals, or medical devices. 21
(e) A pharmacy services administrative organization -pharmacy contract 22
shall provide that the pharmacy services administrative organization shall 23
notify the pharmacy in writing within five (5) calendar days of any material 24
change in its ownership or control related to any company, subsidiary, or 25
other organization described in subdivision (d)(1) of this section. 26
(f)(1) Before entering into a contract with a third -party payer, a 27
pharmacy services administrative organization shall furnish to a pharmacy 28
benefits manager or a third -party payer a written disclosure of ownership or 29
control in order to assist the pharmacy benefits manager or the third -party 30
payer in making an informed decision regarding the pharmacy benefits 31
manager's or the third -party payer's relationship with the pharmacy services 32
administrative organization and the pharmacy or pharmacies for which the 33
pharmacy services administrative organization is negotiating. 34
(2) The disclosure required under subdivision (f)(1) of this 35
section shall include the extent of any ownership or control by any parent 36 As Engrossed: S3/19/25 S4/2/25 SB475
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company, subsidiary, or other organization that: 1
(A) Provides pharmacy services or support; 2
(B) Provides prescription drug or device services; or 3
(C) Manufactures, sells, or distributes prescription 4
drugs, biologicals, or medical devices. 5
(g) A pharmacy services administrative organization -pharmacy contract 6
with a third-party payer shall require that a pharmacy services 7
administrative organization shall notify the third -party payer in writing 8
within five (5) calendar days of any material change in its ownership or 9
control related to any company, subsidiary, or other organization described 10
in subdivision (f)(1) of this section. 11
12
23-99-1905. Wholesale and pharmacy services administrative 13
organization services — Single pharmacy services administrative organization -14
pharmacy contract. 15
(a) A pharmacy services administrative organization that owns or is 16
owned by, in whole or in part, an entity that manufactures, sells, or 17
distributes prescription drugs, biologicals, or medical devices, as a 18
condition of entering into a pharmacy services administrative organization -19
pharmacy contract, shall not require that the pharmacy purchase any drugs or 20
medical devices solely from the entity with which the pharmacy services 21
administrative organization has an ownership interest or from an entity with 22
an ownership interest in the pharmacy services administrative 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 a pharmacy in 27
which the pharmacy purchases prescription drugs, biologicals, or medical 28
devices from a pharmacy services administrative organization or from an 29
entity that owns or is owned by, in whole or in part, the pharmacy services 30
administrative organization. 31
32
23-99-1906. Notice of appeals. 33
(a) A pharmacy services administrative organization -pharmacy contract 34
shall provide that if there is a dispute between a pharmacy and a pharmacy 35
benefits manager or a third -party payer, the pharmacy services administrative 36 As Engrossed: S3/19/25 S4/2/25 SB475
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organization shall ensure and facilitate timely communication from the 1
pharmacy to the pharmacy benefits manager or the third -party payer. 2
(b) A pharmacy services administrative organization -pharmacy contract 3
shall provide that the pharmacy services administrative organization shall 4
forward a notice of appeal from a pharmacy to the pharmacy benefits manager 5
or the third-party payer in a timely manner. 6
(c) If an appeal does not meet the minimum requirements described in 7
the pharmacy services administrative organization -pharmacy contract, the 8
pharmacy services administrative organization shall: 9
(1) Provide the pharmacy with the reason for the denial of the 10
appeal; and 11
(2) Allow the pharmacy to resubmit the appeal for a review by a 12
pharmacy benefits manager. 13
(d) In connection with an appeal or similar process under § 17 -92-507, 14
a third-party payer's or pharmacy benefits manager’s notice or provision of 15
information to a pharmacy services administrative organization is deemed to 16
be notice or provision of information to the pharmacy on whose behalf the 17
pharmacy services administrative organization has contracted. 18
19
23-99-1907. Enforcement. 20
(a) The Insurance Commissioner shall enforce this subchapter. 21
(b)(1) The commissioner may examine or audit the books and records of 22
a pharmacy services administrative organization providing claims 23
administrative services for a pharmacy to determine if the pharmacy services 24
administrative organization is in compliance with this subchapter. 25
(2) The information or data acquired during an examination under 26
subdivision (b)(1) of this section is: 27
(A) Considered proprietary and confidential under §§ 23 -28
61-107(a)(4) and 23-61-207; and 29
(B) Not subject to the Freedom of Information Act of 1967, 30
§ 25-19-101 et seq. 31
(c) After notice and opportunity for hearing, the commissioner may: 32
(1) Impose a civil penalty of up to five thousand dollars 33
($5,000) per violation against a pharmacy services administrative 34
organization if the commissioner finds that the pharmacy services 35
administrative organization has violated this subchapter; or 36 As Engrossed: S3/19/25 S4/2/25 SB475
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(2) Revoke or suspend the license of a pharmacy services 1
administrative organization . 2
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/s/J. Dismang 4
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APPROVED: 4/17/25 7
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