First Regular Session
Seventy-fifth General Assembly
STATE OF COLORADO
REENGROSSED
This Version Includes All Amendments
Adopted in the House of Introduction
LLS NO. 25-0095.03 Kristen Forrestal x4217
HOUSE BILL 25-1094
House Committees Senate Committees
Health & Human Services
Appropriations
A BILL FOR AN ACT
C
ONCERNING PHARMACY BENEFIT MANAGER P RACTICES THAT AFFECT101
PRESCRIPTION DRUG COSTS .102
Bill Summary
(Note: This summary applies to this bill as introduced and does
not reflect any amendments that may be subsequently adopted. If this bill
passes third reading in the house of introduction, a bill summary that
applies to the reengrossed version of this bill will be available at
http://leg.colorado.gov
.)
The bill:
! Allows a pharmacy benefit manager (PBM) to earn income
derived from the assessment of a flat-dollar service fee;
! Prohibits a PBM from earning income based on the cost of
a prescription drug;
! Prohibits a PBM from designing a formulary to favor a
HOUSE
3rd Reading Unamended
March 17, 2025
HOUSE
Amended 2nd Reading
March 14, 2025
HOUSE SPONSORSHIP
Brown and Johnson, Bacon, Bird, Boesenecker, Duran, English, Joseph, Lieder, Lindsay,
McCluskie, McCormick, Paschal, Sirota, Smith, Stewart K., Valdez, Woodrow, Zokaie
SENATE SPONSORSHIP
Pelton B. and Roberts,
Shading denotes HOUSE amendment. Double underlining denotes SENATE amendment.
Capital letters or bold & italic numbers indicate new material to be added to existing law.
Dashes through the words or numbers indicate deletions from existing law. certain branded pharmaceutical or biologic;
! Sets the amount that a PBM shall reimburse an unaffiliated
pharmacy or a PBM-affiliated retail, mail order, or
specialty pharmacy for a prescription drug;
! Requires a PBM to credit income derived from a source
other than a flat-dollar service fee to a health insurance
carrier (carrier) or a self-funded health benefit plan; and
! Requires a PBM to make certain documents and data
available to a carrier, a self-funded plan, or the
commissioner of insurance upon request.
Be it enacted by the General Assembly of the State of Colorado:1
SECTION 1. In Colorado Revised Statutes, add 10-16-122.8 as2
follows:3
10-16-122.8. Pharmacy benefit manager practices -4
agreements - fees - documentation - rules. (1) A
PHARMACY BENEFIT5
MANAGER MAY EARN INCOME DERIVED FROM THE ASSESSMENT OF A6
SINGLE, FLAT-DOLLAR SERVICE FEE FOR THE PROVISION OF A PRESCRIPTION7
DRUG, WHICH SERVICE FEE IS TRANSPARENTLY EXPRESSED IN A WRITTEN8
AGREEMENT BETWEEN THE PBM AND
HEALTH BENEFIT PLAN. THE9
SINGLE, FLAT-DOLLAR SERVICE FEE MAY VARY FROM CLIENT TO CLIENT OF10
THE PBM BASED ON THE NUMBER OF HEALTH BENEFIT PLAN11
PARTICIPANTS, CLINICAL AND ADMINISTRATIVE SERVICES PROVIDED ,12
VALUE-BASED PAYMENT ARRANGEMENT , AND OTHER CONSIDERATIONS.13
(2) (a) THROUGHOUT THE COURSE OF PROVIDING PRESCRIPTION14
DRUG BENEFITS AND CLAIMS PROCESSING SERVICES FOR HEALTH BENEFIT15
PLANS, A PBM SHALL NOT:16
(I) E
ARN ANY INCOME THAT IS DIRECTLY OR INDIRECTLY BASED ON17
THE NET ACQUISITION COST OF A PRESCRIPTION DRUG, INCLUDING INCOME18
FROM PRESCRIPTION DRUG MARK -UPS, COPAYMENTS THAT EXCEED THE19
COST OF PRESCRIPTION DRUGS, UP-CHARGING OR SPREAD-PRICING, GROUP20
1094-2- PURCHASING ORGANIZATION REVENUES , MANUFACTURER -DERIVED1
REVENUES, OR ANY OTHER ARRANGEMENTS CONCERNING THE PRICING OF2
PRESCRIPTION DRUGS; OR3
(II) D
ESIGN A PRESCRIPTION DRUG FORMULARY TO FAVOR A4
CERTAIN BRANDED PHARMACEUTICAL OR BIOLOGIC OVER A5
THERAPEUTICALLY EQUIVALENT GENERIC OR BIOSIMILAR , UNLESS THE6
BRANDED PHARMACEUTICAL OR BIOLOGIC HAS A LOWER
NET7
ACQUISITION COST AND THAT LOWER COST IS REFLECTED IN A LOWER8
OUT-OF-POCKET EXPENSE FOR CONSUMERS .9
(b) IF A PBM, WHICH MAY BE A PARENT OR SUBSIDIARY ENTITY TO10
OR OTHERWISE INTEGRATED WITH AN INSURANCE CARRIER THAT OFFERS11
A HEALTH BENEFIT PLAN, INADVERTENTLY COLLECTS INCOME DERIVED12
FROM SOURCES PROHIBITED BY SUBSECTION (2)(a)(I) OF THIS SECTION, THE13
PBM SHALL PASS THE INCOME THROUGH TO THE HEALTH BENEFIT PLAN14
BENEFICIARIES.15
(c) A PBM MUST BE REIMBURSED BY A HEALTH BENEFIT PLAN FOR16
LOWERING AGGREGATED PRESCRIPTION DRUG SPENDING FOR THE PLAN17
OVER A GIVEN PERIOD OF TIME. A PBM MUST ALSO BE REIMBURSED FOR18
THE DIRECT SERVICES THE PBM PROVIDES TO THE HEALTH BENEFIT PLAN.19
(d) A PBM MAY INCLUDE IN ITS CONTRACTS OR OTHER20
AGREEMENTS WITH PRESCRIPTION DRUG MANUFACTURERS PROVISIONS21
THAT LIMIT THE INCREASE OF THE WHOLESALE ACQUISITION COST OF22
PRESCRIPTION DRUGS THAT THEY INCLUDE IN THEIR FORMULARIES AND23
BENEFIT DESIGNS.24
(e) THIS SUBSECTION (2) DOES NOT PREVENT A PBM FROM25
NEGOTIATING A PRESCRIPTION DRUG REBATE OR OTHER DISCOUNT AS A26
PERCENTAGE OF THE PRESCRIPTION DRUG 'S LIST PRICE.27
1094
-3- (3) THROUGHOUT THE COURSE OF PROVIDING PRESCRIPTION DRUG1
BENEFITS AND CLAIMS PROCESSING SERVICES FOR HEALTH BENEFIT PLANS,2
A PBM SHALL REIMBURSE AN UNAFFILIATED PHARMACY OR A3
PBM-
AFFILIATED RETAIL, MAIL ORDER, OR SPECIALTY PHARMACY FOR THE4
FULFILLMENT OF A PRESCRIPTION DRUG IN AN AMOUNT EQUAL TO THE5
NATIONAL AVERAGE DRUG ACQUISITION COST FOR THE DISPENSED6PRESCRIPTION DRUG INGREDIENTS AND A REASONABLE AND ADEQUATE7
DISPENSING FEE. IF THE NATIONAL AVERAGE DRUG ACQUISITION COST IS8
NOT AVAILABLE AT THE TIME A PRESCRIPTION DRUG IS ADMINISTERED OR9
DISPENSED, A PBM SHALL NOT REIMBURSE IN AN AMOUNT THAT IS LESS10
THAN THE WHOLESALE ACQUISITION COST OF THE PRESCRIPTION DRUG .11
12
(4) (a) A CONTRACT BETWEEN A PBM AND A COVERED PERSON'S13
HEALTH BENEFIT PLAN MUST INCLUDE A PROVISION THAT REQUIRES THE14
PBM TO DISCLOSE PRESCRIPTION DRUG COST INFORMATION TO THE15
HEALTH BENEFIT PLAN, INCLUDING CLAIMS-LEVEL PHARMACY DATA AND16
PBM INCOME DERIVED FROM PROHIBITED SOURCES THAT THE PBM MUST17
PASS THROUGH TO THE HEALTH BENEFITS PLAN IN ACCORDANCE WITH18
SUBSECTION (2)(b) OF THIS SECTION. THE INFORMATION MUST BE19
PROVIDED WITHIN THIRTY DAYS AFTER THE DATE OF THE NOTIFICATION TO20
THE PBM BY THE HEALTH BENEFIT PLAN OR AT REGULAR NEGOTIATED21
REPORTING INTERVALS NECESSARY FOR THE HEALTH BENEFIT PLAN TO22
DETERMINE THE PBM'S COMPLIANCE WITH THE CONTRACT TERMS AND23
THIS SECTION. THE PBM SHALL ASSESS NO ADDITIONAL FEES WITH24
REGARD TO PROVISION OF THIS INFORMATION .25
(b) THE CONTRACT BETWEEN THE PBM AND A COVERED PERSON'S26
HEALTH BENEFIT PLAN MUST INCLUDE A PROVISION AUTHORIZING THE27
1094
-4- COVERED PERSON'S HEALTH BENEFIT PLAN TO ANNUALLY EXECUTE AN1
AUDIT FOR THE PURPOSE OF VALIDATING COMPLIANCE WITH CONTRACT2
TERMS AND THIS SECTION.3
(5) T
HE COMMISSIONER MAY ADOPT RULES AS NECESSARY TO4
ENFORCE THIS SECTION.5
SECTION 2. Act subject to petition - effective date -6
applicability. (1) This act takes effect
January 1, 2027; except that, if a7
referendum petition is filed pursuant to section 1 (3) of article V of the8
state constitution against this act or an item, section, or part of this act9
within the ninety-day period after final adjournment of the general10
assembly, then the act, item, section, or part will not take effect unless11
approved by the people at the general election to be held in November12
2026 and, in such case, will take effect January 1, 2027, or on the date of13
the official declaration of the vote thereon by the governor, whichever is14
later.15
(2) This act applies to conduct occurring on or after the applicable16
effective date of this act.17
1094
-5-