Introduced Version
SENATE BILL No. 140
_____
DIGEST OF INTRODUCED BILL
Citations Affected: IC 25-26-27; IC 27-1.
Synopsis: Pharmacy benefits. Requires an ambulatory pharmacy to
provide, before March 1, 2027, and March 1 of every other year
thereafter, data to the Indiana board of pharmacy (board) relating to the
pharmacy's dispensing costs for the previous calendar year. Requires
the board to share the dispensing data with the commissioner of the
department of insurance (commissioner). Requires the commissioner
to: (1) make a determination relating to the average cost to dispense a
prescription drug in an ambulatory pharmacy for purposes of
determining the minimum reimbursement for a professional dispensing
fee; and (2) conduct a study every two years relating to the dispensing
data. Requires an insurer, a pharmacy benefit manager, or any other
administrator of pharmacy benefits to ensure that a network utilized by
the insurer, pharmacy benefit manager, or other administrator is
reasonably adequate and accessible and file an annual report regarding
the networks with the commissioner. Sets forth certain limitations and
requirements with respect to the provision of pharmacy or pharmacist
services under a health plan. Allows any insured, pharmacy, or
pharmacist impacted by an alleged violation to file a complaint with the
commissioner. Provides that the commissioner may order
reimbursement to any person who has incurred a monetary loss as a
result of a violation. Repeals a superseded provision relating to equal
access and incentives to pharmacies within a pharmacy benefit
manager's network.
Effective: January 1, 2026.
Charbonneau
January 8, 2025, read first time and referred to Committee on Health and Provider
Services.
2025 IN 140—LS 6503/DI 141 Introduced
First Regular Session of the 124th General Assembly (2025)
PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
Constitution) is being amended, the text of the existing provision will appear in this style type,
additions will appear in this style type, and deletions will appear in this style type.
Additions: Whenever a new statutory provision is being enacted (or a new constitutional
provision adopted), the text of the new provision will appear in this style type. Also, the
word NEW will appear in that style type in the introductory clause of each SECTION that adds
a new provision to the Indiana Code or the Indiana Constitution.
Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts
between statutes enacted by the 2024 Regular Session of the General Assembly.
SENATE BILL No. 140
A BILL FOR AN ACT to amend the Indiana Code concerning
insurance.
Be it enacted by the General Assembly of the State of Indiana:
1 SECTION 1. IC 25-26-27 IS ADDED TO THE INDIANA CODE
2 AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE
3 JANUARY 1, 2026]:
4 Chapter 27. Reporting Requirements for Ambulatory
5 Pharmacies
6 Sec. 1. As used in this chapter, "ambulatory pharmacy" has the
7 meaning set forth in IC 27-1-24.6-3.
8 Sec. 2. As used in this chapter, "board" means the Indiana
9 board of pharmacy.
10 Sec. 3. As used in this chapter, "commissioner" means the
11 commissioner of the department of insurance.
12 Sec. 4. (a) An ambulatory pharmacy that is:
13 (1) located in Indiana; and
14 (2) licensed under this article;
15 shall, before March 1, 2027, and March 1 of every other year
16 thereafter, provide data to the board relating to the pharmacy's
17 dispensing costs for the previous calendar year.
2025 IN 140—LS 6503/DI 141 2
1 (b) The data must be provided in accordance with the
2 requirements under IC 27-1-24.6-18 and section 5 of this chapter.
3 Sec. 5. The board shall adopt rules under IC 4-22-2 to
4 implement section 4 of this chapter. The rules adopted under this
5 section must:
6 (1) incorporate the data elements to be collected from each
7 ambulatory pharmacy, as determined by the commissioner
8 under IC 27-1-24.6-18; and
9 (2) establish the reporting format and manner of data
10 submission.
11 Sec. 6. (a) The board shall share the data collected under this
12 chapter with the commissioner not later than thirty (30) days after
13 the board receives the data.
14 (b) In carrying out the board's duties under this chapter, the
15 board shall cooperate and consult with the commissioner.
16 (c) All information and data acquired by the board or
17 commissioner under this chapter or IC 27-1-24.6-18 is:
18 (1) declared confidential and proprietary; and
19 (2) not subject to disclosure under IC 5-14-3.
20 Sec. 7. The board or commissioner may retain or contract with
21 one (1) or more third party vendors or contractors to collect or
22 process the data required under this chapter, or provide any other
23 expertise, service, or function necessary to carry out the board's or
24 commissioner's duties under this chapter or IC 27-1-24.6-18, if the
25 vendor or contractor:
26 (1) agrees in a written or electronic record to maintain the
27 confidential and proprietary status of the data and all
28 information relating to the data; and
29 (2) is not owned by or affiliated with a pharmacy benefit
30 manager (as defined in IC 27-1-24.5-12).
31 SECTION 2. IC 27-1-24.5-19 IS REPEALED [EFFECTIVE
32 JANUARY 1, 2026]. Sec. 19. (a) A pharmacy benefit manager shall
33 provide equal access and incentives to all pharmacies within the
34 pharmacy benefit manager's network.
35 (b) A pharmacy benefit manager may not do any of the following:
36 (1) Condition participation in any network on accreditation,
37 credentialing, or licensing of a pharmacy, other than a license or
38 permit required by the Indiana board of pharmacy or other state
39 or federal regulatory authority for the services provided by the
40 pharmacy. However, nothing in this subdivision precludes the
41 department from providing credentialing or accreditation
42 standards for pharmacies.
2025 IN 140—LS 6503/DI 141 3
1 (2) Discriminate against any pharmacy.
2 (3) Directly or indirectly retroactively deny a claim or aggregate
3 of claims after the claim or aggregate of claims has been
4 adjudicated, unless any of the following apply:
5 (A) The original claim was submitted fraudulently.
6 (B) The original claim payment was incorrect because the
7 pharmacy or pharmacist had already been paid for the drug.
8 (C) The pharmacist services were not properly rendered by the
9 pharmacy or pharmacist.
10 (4) Reduce, directly or indirectly, payment to a pharmacy for
11 pharmacist services to an effective rate of reimbursement,
12 including permitting an insurer or plan sponsor to make such a
13 reduction.
14 (5) Reimburse a pharmacy that is affiliated with the pharmacy
15 benefit manager, other than solely being included in the pharmacy
16 benefit manager's network, at a greater reimbursement rate than
17 other pharmacies in the same network.
18 (6) Impose limits, including quantity limits or refill frequency
19 limits, on a pharmacy's access to medication that differ from those
20 existing for a pharmacy benefit manager affiliate.
21 (7) Share any covered individual's information, including
22 de-identified covered individual information, received from a
23 pharmacy or pharmacy benefit manager affiliate, except as
24 permitted by the federal Health Insurance Portability and
25 Accountability Act (HIPAA) (P.L.104-191).
26 A violation of this subsection by a pharmacy benefit manager
27 constitutes an unfair or deceptive act or practice in the business of
28 insurance under IC 27-4-1-4.
29 SECTION 3. IC 27-1-24.6 IS ADDED TO THE INDIANA CODE
30 AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE
31 JANUARY 1, 2026]:
32 Chapter 24.6. Pharmacy Benefits
33 Sec. 1. This chapter applies to a policy or contract that is issued,
34 delivered, entered into, renewed, or amended after December 31,
35 2025.
36 Sec. 2. As used in this chapter, "actual overpayment" means the
37 portion of any amount paid for pharmacy or pharmacist services
38 that:
39 (1) is duplicative because the pharmacy or pharmacist has
40 already been paid for the services; or
41 (2) was erroneously paid because the services were not
42 rendered in accordance with the prescriber's order, in which
2025 IN 140—LS 6503/DI 141 4
1 case only the amount paid for the portion of the prescription
2 that was filled incorrectly or in excess of the prescriber's
3 order is deemed an actual overpayment.
4 Sec. 3. As used in this chapter, "ambulatory pharmacy" means
5 a pharmacy that:
6 (1) is open to the general public; and
7 (2) dispenses outpatient prescription drugs.
8 Sec. 4. As used in this chapter, "common control" includes:
9 (1) sharing common management or managers; and
10 (2) having common members on boards of directors.
11 Sec. 5. As used in this chapter, "cost sharing" means the cost to
12 an insured under a health plan according to any coverage limit,
13 copayment, coinsurance, deductible, or other out-of-pocket expense
14 requirements imposed by the health plan.
15 Sec. 6. (a) As used in this chapter, "health plan" means the
16 following:
17 (1) A state employee health plan (as defined in IC 5-10-8-6.7).
18 (2) A policy of accident and sickness insurance (as defined in
19 IC 27-8-5-1). However, the term does not include the
20 coverages described in IC 27-8-5-2.5(a).
21 (3) An individual contract (as defined in IC 27-13-1-21) or a
22 group contract (as defined in IC 27-13-1-16) that provides
23 coverage for basic health care services (as defined in
24 IC 27-13-1-4).
25 (4) Any other plan or program that provides payment,
26 reimbursement, or indemnification to a covered individual for
27 the cost of prescription drugs.
28 (b) The term does not include the following:
29 (1) A self-insured health plan provided by a hospital or health
30 system to its employees and dependents of employees if the
31 hospital or health system owns a pharmacy.
32 (2) A prescription drug plan established under Medicare Part
33 D.
34 Sec. 7. As used in this chapter, "insured" means an individual
35 covered under a health plan.
36 Sec. 8. (a) As used in this chapter, "insurer" means any of the
37 following that offer or issue a health plan:
38 (1) An insurance company.
39 (2) A health maintenance organization.
40 (3) A limited health service organization.
41 (4) A self-insurer, including a governmental plan, church
42 plan, or multiple employer welfare arrangement.
2025 IN 140—LS 6503/DI 141 5
1 (5) A provider sponsored integrated health delivery network.
2 (6) A self-insured employer organized association.
3 (7) A nonprofit hospital, medical-surgical, dental, and health
4 service corporation.
5 (8) Any other third party payor that is:
6 (A) authorized to transact health insurance business in
7 Indiana; or
8 (B) not exempt by federal law from regulation under the
9 insurance laws of Indiana.
10 (b) The term includes any person or entity that has contracted
11 with a state or federal agency to provide coverage under a health
12 plan.
13 Sec. 9. As used in this chapter, "national drug code number"
14 means the unique national drug code number that identifies:
15 (1) a specific approved drug;
16 (2) the manufacturer of the drug; and
17 (3) the package presentation of the drug.
18 Sec. 10. As used in this chapter, "net amount" means the
19 amount paid to a pharmacy or pharmacist by the insurer,
20 pharmacy benefit manager, or other administrator minus:
21 (1) any fees;
22 (2) any price concessions; and
23 (3) all other revenue;
24 passing from the pharmacy or pharmacist to the insurer,
25 pharmacy benefit manager, or other administrator.
26 Sec. 11. As used in this chapter, "pharmacy" has the meaning
27 set forth in IC 25-26-13-2.
28 Sec. 12. As used in this chapter, "pharmacy affiliate" means a
29 pharmacy, including a specialty pharmacy, that directly or
30 indirectly, through one (1) or more intermediaries:
31 (1) owns or controls;
32 (2) is owned or controlled by; or
33 (3) is under common ownership or common control with;
34 an insurer, a pharmacy benefit manager, or other administrator of
35 pharmacy benefits.
36 Sec. 13. As used in this chapter, "pharmacy benefit manager"
37 has the meaning set forth in IC 27-1-24.5-12.
38 Sec. 14. (a) As used in this chapter, "pharmacy or pharmacist
39 services" means any:
40 (1) health care procedures or treatments within the scope of
41 practice of a pharmacist; or
42 (2) services provided by a pharmacy or pharmacist.
2025 IN 140—LS 6503/DI 141 6
1 (b) The term includes the sale and provision of the following by
2 a pharmacy or pharmacist:
3 (1) Prescription drugs.
4 (2) Home medical equipment (as defined in IC 25-26-21-2).
5 Sec. 15. As used in this chapter, "wholesale acquisition cost":
6 (1) means the manufacturer's list price for a drug to
7 wholesalers or direct purchasers in the United States for the
8 most recent month for which the information is available, as
9 reported in wholesale price guides or other publications of
10 drug pricing data; and
11 (2) does not include prompt pay or other discounts, rebates,
12 or reductions in price.
13 Sec. 16. (a) An insurer, a pharmacy benefit manager, or any
14 other administrator of pharmacy benefits that utilizes a network
15 to provide pharmacy or pharmacist services under a health plan
16 shall ensure that the network is reasonably adequate and accessible
17 with respect to the provision of pharmacy or pharmacist services.
18 (b) A reasonably adequate and accessible network with respect
19 to the provision of pharmacy or pharmacist services must, at a
20 minimum:
21 (1) offer an adequate number of accessible pharmacies that
22 are not mail order pharmacies; and
23 (2) provide convenient access to pharmacies that are not mail
24 order pharmacies within a reasonable distance of not more
25 than thirty (30) miles from each insured's residence, to the
26 extent that pharmacy or pharmacist services are available.
27 (c) An insurer, a pharmacy benefit manager, and any other
28 administrator of pharmacy benefits shall file an annual report with
29 the commissioner in a manner and form prescribed by the
30 commissioner. The annual report must describe the networks of
31 the insurer, pharmacy benefit manager, or other administrator
32 that are utilized for the provision of pharmacy or pharmacist
33 services under a health plan.
34 (d) The commissioner shall review each network reported under
35 subsection (c) to ensure that the network complies with this section.
36 (e) All information and data acquired by the department under
37 this section that is generally recognized as confidential or
38 proprietary is confidential for the purposes of IC 5-14-3-4 and may
39 not be disclosed by the department. However, the department may
40 publicly disclose aggregated information that is not descriptive of
41 any readily identifiable person or entity.
42 Sec. 17. (a) A contract between a pharmacy or pharmacist and
2025 IN 140—LS 6503/DI 141 7
1 an insurer, a pharmacy benefit manager, or any other
2 administrator of pharmacy benefits for the provision of pharmacy
3 or pharmacist services under a health plan, either directly or
4 through a pharmacy services administration organization or group
5 purchasing organization, must include provisions that do the
6 following:
7 (1) Outline the terms and conditions for the provision of
8 pharmacy or pharmacist services.
9 (2) Prohibit the insurer, pharmacy benefit manager, or other
10 administrator from doing the following:
11 (A) Reducing payment for pharmacy or pharmacist
12 services, directly or indirectly, under a reconciliation
13 process to an effective rate of reimbursement, including
14 creating, imposing, or establishing:
15 (i) direct or indirect remuneration fees;
16 (ii) generic effective rates;
17 (iii) dispensing effective rates;
18 (iv) brand effective rates;
19 (v) any other effective rates;
20 (vi) in network fees;
21 (vii) performance fees;
22 (viii) point of sale fees;
23 (ix) retroactive fees;
24 (x) preadjudication fees;
25 (xi) post-adjudication fees; and
26 (xii) any other mechanism that reduces or aggregately
27 reduces payment for pharmacy or pharmacist services.
28 (B) Subject to subsection (b), retroactively denying,
29 reducing reimbursement for, or seeking any refunds or
30 recoupments for a claim for pharmacy or pharmacist
31 services, in whole or in part, from the pharmacy or
32 pharmacist after returning a paid claim response as part
33 of the adjudication of the claim, including claims for the
34 cost of a medication or dispensed product and claims for
35 pharmacy or pharmacist services that are deemed
36 ineligible for coverage, unless:
37 (i) the original claim was submitted fraudulently; or
38 (ii) the pharmacy or pharmacist received an actual
39 overpayment.
40 (C) Reimbursing the pharmacy or pharmacist for a
41 prescription drug or other service at a net amount that is
42 less than the amount the insurer, pharmacy benefit
2025 IN 140—LS 6503/DI 141 8
1 manager, or other administrator reimburses itself or a
2 pharmacy affiliate for the same:
3 (i) prescription drug by national drug code number; or
4 (ii) service.
5 (D) Collecting cost sharing from a pharmacy or
6 pharmacist that was provided to the pharmacy or
7 pharmacist by an insured for the provision of pharmacy or
8 pharmacist services under the health plan.
9 (E) Designating a prescription drug as a specialty drug
10 unless the drug is a limited distribution drug that:
11 (i) requires special handling; and
12 (ii) is not commonly carried at retail pharmacies or
13 oncology clinics or practices.
14 (3) Notwithstanding any other law, provide the following
15 minimum reimbursements to the pharmacy or pharmacist for
16 each prescription drug or other service provided by the
17 pharmacy or pharmacist:
18 (A) Reimbursement for the cost of the drug or other
19 service at an amount that is not less than:
20 (i) the national average drug acquisition cost for the
21 drug or service at the time the drug or service is
22 administered, dispensed, or provided; or
23 (ii) if the national average drug acquisition cost is not
24 available at the time a drug is administered or dispensed,
25 the wholesale acquisition cost for the drug at the time the
26 drug is administered or dispensed.
27 For purposes of this clause, the insurer, pharmacy benefit
28 manager, or other administrator shall utilize the most
29 recently published monthly national average drug
30 acquisition cost as a point of reference for the ingredient
31 drug product component of a pharmacy's or pharmacist's
32 reimbursement for drugs appearing on the national
33 average drug acquisition cost list.
34 (B) This clause does not apply to a mail order
35 pharmaceutical distributor, including a mail order
36 pharmacy. For health plan years:
37 (i) beginning on or after January 1, 2028, reimbursement
38 for a professional dispensing fee in an amount that is not
39 less than the average cost to dispense a prescription drug
40 in an ambulatory pharmacy located in Indiana, as
41 determined by the commissioner; or
42 (ii) beginning after December 31, 2025, and before
2025 IN 140—LS 6503/DI 141 9
1 January 1, 2028, and for any subsequent health plan
2 years for which a determination under item (i) has not
3 taken effect, reimbursement for a professional
4 dispensing fee for an independent retail pharmacy in
5 Indiana or a pharmacist practicing at an independent
6 retail pharmacy in Indiana that is not less than ten
7 dollars and sixty-four cents ($10.64).
8 (b) An insurer, a pharmacy benefit manager, or any other
9 administrator of pharmacy benefits may not request a refund or
10 make a recoupment of a dispensing fee paid to the pharmacy if the
11 correct medication was dispensed to the patient.
12 Sec. 18. (a) In acquiring data for, and making, the determination
13 required under section 17(a)(3)(B)(i) of this chapter, the
14 commissioner shall:
15 (1) adopt rules under IC 4-22-2 to establish the data elements
16 to be collected by the Indiana board of pharmacy under
17 IC 25-26-27-4;
18 (2) conduct a study of the dispensing data submitted to the
19 commissioner by the Indiana board of pharmacy in
20 accordance with IC 25-26-27-6;
21 (3) repeat the study described in subdivision (2) every two (2)
22 years to obtain updated information;
23 (4) adjust the determination required under section
24 17(a)(3)(B)(i) of this chapter every two (2) years as
25 appropriate based upon the results of each study; and
26 (5) comply with all requirements of IC 25-26-27.
27 (b) In carrying out the duties set forth in this section, the
28 commissioner shall cooperate and consult with the Indiana board
29 of pharmacy.
30 Sec. 19. (a) As used in this section, "interfere" includes:
31 (1) inducing;
32 (2) steering;
33 (3) offering financial or other incentives; and
34 (4) imposing a penalty.
35 (b) Except as provided in section 17 of this chapter, with respect
36 to the provision of pharmacy or pharmacist services under a health
37 plan, an insurer, a pharmacy benefit manager, or any other
38 administrator of pharmacy benefits:
39 (1) may not:
40 (A) require or incentivize an insured to use a mail order
41 pharmaceutical distribution, including a mail order
42 pharmacy, such as imposing any cost sharing requirement,
2025 IN 140—LS 6503/DI 141 10
1 fee, drug supply limitation, or other condition relating to
2 pharmacy or pharmacist services received from a retail
3 pharmacy that is greater, or more restrictive, than what
4 would otherwise be imposed if the insured used a mail
5 order pharmaceutical distributor, including a mail order
6 pharmacy;
7 (B) prohibit a pharmacy or pharmacist from, or impose a
8 penalty on a pharmacy or pharmacist for:
9 (i) selling a lower cost alternative to an insured, if a
10 lower cost alternative is available; or
11 (ii) providing information to an insured under subsection
12 (d);
13 (C) discriminate against any pharmacy or pharmacist that
14 is:
15 (i) located within the geographic coverage area of the
16 health plan; and
17 (ii) willing to agree to, or accept, reasonable terms and
18 conditions established for participation in the insurer's,
19 pharmacy benefit manager's, other administrator's, or
20 health plan's network;
21 (D) impose limits, including quantity limits or refill
22 frequency limits, on an insured's access to medication from
23 a pharmacy that are more restrictive than those existing
24 for a pharmacy affiliate;
25 (E) subject to subsection (c), require or incentivize an
26 insured to receive pharmacy or pharmacist services from
27 a pharmacy affiliate, including:
28 (i) requiring or incentivizing an insured to obtain a
29 specialty drug from a pharmacy affiliate;
30 (ii) charging less cost sharing to insureds that use
31 pharmacy affiliates than what is charged to insureds that
32 use nonaffiliated pharmacies; and
33 (iii) providing any incentives for insureds that use
34 pharmacy affiliates that are not provided for insureds
35 that use nonaffiliated pharmacies; or
36 (F) interfere with an insured's right to choose the insured's
37 network pharmacy of choice, such as:
38 (i) promoting one (1) participating pharmacy over
39 another;
40 (ii) offering a monetary advantage;
41 (iii) charging higher cost sharing; and
42 (iv) reducing an insured's allowable reimbursement for
2025 IN 140—LS 6503/DI 141 11
1 pharmacy or pharmacist services; and
2 (2) shall:
3 (A) provide equal access and incentives to all pharmacies
4 within the insurer's, pharmacy benefit manager's, other
5 administrator's, or health plan's network; and
6 (B) offer all pharmacies located in the health plan's
7 geographic coverage area eligibility to participate in the
8 insurer's, pharmacy benefit manager's, other
9 administrator's, or health plan's network under identical
10 reimbursement terms for the provision of pharmacy or
11 pharmacist services.
12 (c) Subsection (b)(1)(E) may not be construed to prohibit:
13 (1) communications to insureds regarding networks and
14 prices if the communication is accurate and includes
15 information about all eligible nonaffiliated pharmacies; or
16 (2) an insurer, a pharmacy benefit manager, or any other
17 administrator of pharmacy benefits from:
18 (A) requiring an insured to utilize a network that may
19 include pharmacy affiliates in order to receive coverage
20 under the health plan; or
21 (B) providing financial incentives for utilizing the network,
22 if the insurer, pharmacy benefit manager, or other
23 administrator complies with this section and section 16 of
24 this chapter.
25 (d) A pharmacist shall have the right to provide an insured with
26 information regarding lower cost alternatives to assist the insured
27 in making informed decisions.
28 Sec. 20. (a) Any insured, pharmacy, or pharmacist impacted by
29 an alleged violation of this chapter may file a complaint with the
30 commissioner.
31 (b) The commissioner shall:
32 (1) review and investigate all complaints filed under this
33 section;
34 (2) issue, in writing, a determination to the insured,
35 pharmacy, or pharmacist as to whether a violation occurred;
36 and
37 (3) for alleged violations of section 17(a)(2)(E) of this chapter,
38 consult with the Indiana board of pharmacy in making the
39 determination of whether a violation occurred.
40 (c) An insurer, a pharmacy benefit manager, or any other
41 administrator of pharmacy benefits shall:
42 (1) respond to; and
2025 IN 140—LS 6503/DI 141 12
1 (2) comply with;
2 any requests made by the commissioner under this section.
3 Sec. 21. In addition to any other remedies, penalties, or damages
4 available under common law or statute, the commissioner may
5 order reimbursement to any person who has incurred a monetary
6 loss as a result of a violation of this chapter.
7 Sec. 22. This chapter applies to the extent that it is not in conflict
8 with federal law.
2025 IN 140—LS 6503/DI 141