*SB0140.2*
February 14, 2025
SENATE BILL No. 140
_____
DIGEST OF SB 140 (Updated February 13, 2025 9:46 am - DI 120)
Citations Affected: IC 27-1.
Synopsis: Pharmacy benefits. 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 Repeals a superseded provision relating to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, Johnson T, Zay,
Randolph Lonnie M
January 8, 2025, read first time and referred to Committee on Health and Provider
Services.
January 23, 2025, amended, reported favorably — Do Pass; reassigned to Committee on
Appropriations.
February 13, 2025, amended, reported favorably — Do Pass.
SB 140—LS 6503/DI 141 February 14, 2025
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 IC 27-1-24.5-19 IS REPEALED [EFFECTIVE
2 JANUARY 1, 2026]. Sec. 19. (a) A pharmacy benefit manager shall
3 provide equal access and incentives to all pharmacies within the
4 pharmacy benefit manager's network.
5 (b) A pharmacy benefit manager may not do any of the following:
6 (1) Condition participation in any network on accreditation,
7 credentialing, or licensing of a pharmacy, other than a license or
8 permit required by the Indiana board of pharmacy or other state
9 or federal regulatory authority for the services provided by the
10 pharmacy. However, nothing in this subdivision precludes the
11 department from providing credentialing or accreditation
12 standards for pharmacies.
13 (2) Discriminate against any pharmacy.
14 (3) Directly or indirectly retroactively deny a claim or aggregate
15 of claims after the claim or aggregate of claims has been
16 adjudicated, unless any of the following apply:
17 (A) The original claim was submitted fraudulently.
SB 140—LS 6503/DI 141 2
1 (B) The original claim payment was incorrect because the
2 pharmacy or pharmacist had already been paid for the drug.
3 (C) The pharmacist services were not properly rendered by the
4 pharmacy or pharmacist.
5 (4) Reduce, directly or indirectly, payment to a pharmacy for
6 pharmacist services to an effective rate of reimbursement,
7 including permitting an insurer or plan sponsor to make such a
8 reduction.
9 (5) Reimburse a pharmacy that is affiliated with the pharmacy
10 benefit manager, other than solely being included in the pharmacy
11 benefit manager's network, at a greater reimbursement rate than
12 other pharmacies in the same network.
13 (6) Impose limits, including quantity limits or refill frequency
14 limits, on a pharmacy's access to medication that differ from those
15 existing for a pharmacy benefit manager affiliate.
16 (7) Share any covered individual's information, including
17 de-identified covered individual information, received from a
18 pharmacy or pharmacy benefit manager affiliate, except as
19 permitted by the federal Health Insurance Portability and
20 Accountability Act (HIPAA) (P.L.104-191).
21 A violation of this subsection by a pharmacy benefit manager
22 constitutes an unfair or deceptive act or practice in the business of
23 insurance under IC 27-4-1-4.
24 SECTION 2. IC 27-1-24.6 IS ADDED TO THE INDIANA CODE
25 AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE
26 JANUARY 1, 2026]:
27 Chapter 24.6. Pharmacy Benefits
28 Sec. 1. This chapter applies to a policy or contract that is issued,
29 delivered, entered into, renewed, or amended after December 31,
30 2025.
31 Sec. 2. As used in this chapter, "actual overpayment" means the
32 portion of any amount paid for pharmacy or pharmacist services
33 that:
34 (1) is duplicative because the pharmacy or pharmacist has
35 already been paid for the services; or
36 (2) was erroneously paid because the services were not
37 rendered in accordance with the prescriber's order, in which
38 case only the amount paid for the portion of the prescription
39 that was filled incorrectly or in excess of the prescriber's
40 order is deemed an actual overpayment.
41 Sec. 3. As used in this chapter, "ambulatory pharmacy" means
42 a pharmacy that:
SB 140—LS 6503/DI 141 3
1 (1) is open to the general public; and
2 (2) dispenses outpatient prescription drugs.
3 Sec. 4. As used in this chapter, "common control" includes:
4 (1) sharing common management or managers; and
5 (2) having common members on boards of directors.
6 Sec. 5. As used in this chapter, "cost sharing" means the cost to
7 an insured under a health plan according to any coverage limit,
8 copayment, coinsurance, deductible, or other out-of-pocket expense
9 requirements imposed by the health plan.
10 Sec. 6. (a) As used in this chapter, "health plan" means the
11 following:
12 (1) A state employee health plan (as defined in IC 5-10-8-6.7).
13 (2) A policy of accident and sickness insurance (as defined in
14 IC 27-8-5-1). However, the term does not include the
15 coverages described in IC 27-8-5-2.5(a).
16 (3) An individual contract (as defined in IC 27-13-1-21) or a
17 group contract (as defined in IC 27-13-1-16) that provides
18 coverage for basic health care services (as defined in
19 IC 27-13-1-4).
20 (4) Any other plan or program that provides payment,
21 reimbursement, or indemnification to a covered individual for
22 the cost of prescription drugs.
23 (b) The term does not include the following:
24 (1) A self-insured health plan provided by a hospital or health
25 system to its employees and dependents of employees if the
26 hospital or health system owns a pharmacy.
27 (2) A prescription drug plan established under Medicare Part
28 D.
29 Sec. 7. As used in this chapter, "insured" means an individual
30 covered under a health plan.
31 Sec. 8. (a) As used in this chapter, "insurer" means any of the
32 following that offer or issue a health plan:
33 (1) An insurance company.
34 (2) A health maintenance organization.
35 (3) A limited health service organization.
36 (4) A self-insurer, including a governmental plan, church
37 plan, or multiple employer welfare arrangement.
38 (5) A provider sponsored integrated health delivery network.
39 (6) A self-insured employer organized association.
40 (7) A nonprofit hospital, medical-surgical, dental, and health
41 service corporation.
42 (8) Any other third party payor that is:
SB 140—LS 6503/DI 141 4
1 (A) authorized to transact health insurance business in
2 Indiana; or
3 (B) not exempt by federal law from regulation under the
4 insurance laws of Indiana.
5 (b) The term includes any person or entity that has contracted
6 with a state or federal agency to provide coverage under a health
7 plan.
8 Sec. 9. As used in this chapter, "national drug code number"
9 means the unique national drug code number that identifies:
10 (1) a specific approved drug;
11 (2) the manufacturer of the drug; and
12 (3) the package presentation of the drug.
13 Sec. 10. As used in this chapter, "net amount" means the
14 amount paid to a pharmacy or pharmacist by the insurer,
15 pharmacy benefit manager, or other administrator minus:
16 (1) any fees;
17 (2) any price concessions; and
18 (3) all other revenue;
19 passing from the pharmacy or pharmacist to the insurer,
20 pharmacy benefit manager, or other administrator.
21 Sec. 11. As used in this chapter, "pharmacy" has the meaning
22 set forth in IC 25-26-13-2.
23 Sec. 12. As used in this chapter, "pharmacy affiliate" means a
24 pharmacy, including a specialty pharmacy, that directly or
25 indirectly, through one (1) or more intermediaries:
26 (1) owns or controls;
27 (2) is owned or controlled by; or
28 (3) is under common ownership or common control with;
29 an insurer, a pharmacy benefit manager, or other administrator of
30 pharmacy benefits.
31 Sec. 13. As used in this chapter, "pharmacy benefit manager"
32 has the meaning set forth in IC 27-1-24.5-12.
33 Sec. 14. (a) As used in this chapter, "pharmacy or pharmacist
34 services" means any:
35 (1) health care procedures or treatments within the scope of
36 practice of a pharmacist; or
37 (2) services provided by a pharmacy or pharmacist.
38 (b) The term includes the sale and provision of the following by
39 a pharmacy or pharmacist:
40 (1) Prescription drugs.
41 (2) Home medical equipment (as defined in IC 25-26-21-2).
42 Sec. 15. As used in this chapter, "wholesale acquisition cost":
SB 140—LS 6503/DI 141 5
1 (1) means the manufacturer's list price for a drug to
2 wholesalers or direct purchasers in the United States for the
3 most recent month for which the information is available, as
4 reported in wholesale price guides or other publications of
5 drug pricing data; and
6 (2) does not include prompt pay or other discounts, rebates,
7 or reductions in price.
8 Sec. 16. (a) An insurer, a pharmacy benefit manager, or any
9 other administrator of pharmacy benefits that utilizes a network
10 to provide pharmacy or pharmacist services under a health plan
11 shall ensure that the network is reasonably adequate and accessible
12 with respect to the provision of pharmacy or pharmacist services.
13 (b) A reasonably adequate and accessible network with respect
14 to the provision of pharmacy or pharmacist services must, at a
15 minimum:
16 (1) offer an adequate number of accessible pharmacies that
17 are not mail order pharmacies; and
18 (2) provide convenient access to pharmacies that are not mail
19 order pharmacies within a reasonable distance of not more
20 than thirty (30) miles from each insured's residence, to the
21 extent that pharmacy or pharmacist services are available.
22 (c) An insurer, a pharmacy benefit manager, and any other
23 administrator of pharmacy benefits shall file an annual report with
24 the commissioner in a manner and form prescribed by the
25 commissioner. The annual report must describe the networks of
26 the insurer, pharmacy benefit manager, or other administrator
27 that are utilized for the provision of pharmacy or pharmacist
28 services under a health plan.
29 (d) The commissioner shall review each network reported under
30 subsection (c) to ensure that the network complies with this section.
31 (e) All information and data acquired by the department under
32 this section that is generally recognized as confidential or
33 proprietary is confidential for the purposes of IC 5-14-3-4 and may
34 not be disclosed by the department. However, the department may
35 publicly disclose aggregated information that is not descriptive of
36 any readily identifiable person or entity.
37 Sec. 17. (a) A contract between a pharmacy or pharmacist and
38 an insurer, a pharmacy benefit manager, or any other
39 administrator of pharmacy benefits for the provision of pharmacy
40 or pharmacist services under a health plan, either directly or
41 through a pharmacy services administrative organization or group
42 purchasing organization, must include provisions that do the
SB 140—LS 6503/DI 141 6
1 following:
2 (1) Outline the terms and conditions for the provision of
3 pharmacy or pharmacist services.
4 (2) Prohibit the insurer, pharmacy benefit manager, or other
5 administrator from doing the following:
6 (A) Reducing payment for pharmacy or pharmacist
7 services, directly or indirectly, under a reconciliation
8 process to an effective rate of reimbursement, including
9 creating, imposing, or establishing:
10 (i) direct or indirect remuneration fees;
11 (ii) generic effective rates;
12 (iii) dispensing effective rates;
13 (iv) brand effective rates;
14 (v) any other effective rates;
15 (vi) in network fees;
16 (vii) performance fees;
17 (viii) point of sale fees;
18 (ix) retroactive fees;
19 (x) preadjudication fees;
20 (xi) post-adjudication fees; and
21 (xii) any other mechanism that reduces or aggregately
22 reduces payment for pharmacy or pharmacist services.
23 (B) Subject to subsection (b), retroactively denying,
24 reducing reimbursement for, or seeking any refunds or
25 recoupments for a claim for pharmacy or pharmacist
26 services, in whole or in part, from the pharmacy or
27 pharmacist after returning a paid claim response as part
28 of the adjudication of the claim, including claims for the
29 cost of a medication or dispensed product and claims for
30 pharmacy or pharmacist services that are deemed
31 ineligible for coverage, unless:
32 (i) the original claim was submitted fraudulently; or
33 (ii) the pharmacy or pharmacist received an actual
34 overpayment.
35 (C) Reimbursing the pharmacy or pharmacist for a
36 prescription drug or other service at a net amount that is
37 less than the amount the insurer, pharmacy benefit
38 manager, or other administrator reimburses itself or a
39 pharmacy affiliate for the same:
40 (i) prescription drug by national drug code number; or
41 (ii) service.
42 (D) Collecting cost sharing from a pharmacy or
SB 140—LS 6503/DI 141 7
1 pharmacist that was provided to the pharmacy or
2 pharmacist by an insured for the provision of pharmacy or
3 pharmacist services under the health plan.
4 (E) Designating a prescription drug as a specialty drug
5 unless the drug is a limited distribution drug that:
6 (i) requires special handling; and
7 (ii) is not commonly carried at retail pharmacies or
8 oncology clinics or practices.
9 (3) Notwithstanding any other law, provide the following
10 minimum reimbursements to the pharmacy or pharmacist for
11 each prescription drug or other service provided by the
12 pharmacy or pharmacist:
13 (A) Reimbursement for the cost of the drug or other
14 service at an amount that is not less than:
15 (i) the national average drug acquisition cost for the
16 drug or service at the time the drug or service is
17 administered, dispensed, or provided; or
18 (ii) if the national average drug acquisition cost is not
19 available at the time a drug is administered or dispensed,
20 the wholesale acquisition cost for the drug at the time the
21 drug is administered or dispensed.
22 For purposes of this clause, the insurer, pharmacy benefit
23 manager, or other administrator shall utilize the most
24 recently published monthly national average drug
25 acquisition cost as a point of reference for the ingredient
26 drug product component of a pharmacy's or pharmacist's
27 reimbursement for drugs appearing on the national
28 average drug acquisition cost list.
29 (B) This clause does not apply to a mail order
30 pharmaceutical distributor, including a mail order
31 pharmacy. For health plan years:
32 (i) beginning on or after January 1, 2028, reimbursement
33 for a professional dispensing fee in an amount that is not
34 less than the average cost to dispense a prescription drug
35 in an ambulatory pharmacy located in Indiana, as
36 determined by the commissioner; or
37 (ii) beginning after December 31, 2025, and before
38 January 1, 2028, and for any subsequent health plan
39 years for which a determination under item (i) has not
40 taken effect, reimbursement for a professional
41 dispensing fee for an independent retail pharmacy in
42 Indiana or a pharmacist practicing at an independent
SB 140—LS 6503/DI 141 8
1 retail pharmacy in Indiana that is not less than ten
2 dollars and sixty-four cents ($10.64).
3 (b) An insurer, a pharmacy benefit manager, or any other
4 administrator of pharmacy benefits may not request a refund or
5 make a recoupment of a dispensing fee paid to the pharmacy if the
6 correct medication was dispensed to the patient.
7 Sec. 18. (a) As used in this section, "interfere" includes:
8 (1) inducing;
9 (2) steering;
10 (3) offering financial or other incentives; and
11 (4) imposing a penalty.
12 (b) Except as provided in section 17 of this chapter, with respect
13 to the provision of pharmacy or pharmacist services under a health
14 plan, an insurer, a pharmacy benefit manager, or any other
15 administrator of pharmacy benefits:
16 (1) may not:
17 (A) require or incentivize an insured to use a mail order
18 pharmaceutical distribution, including a mail order
19 pharmacy, such as imposing any cost sharing requirement,
20 fee, drug supply limitation, or other condition relating to
21 pharmacy or pharmacist services received from a retail
22 pharmacy that is greater, or more restrictive, than what
23 would otherwise be imposed if the insured used a mail
24 order pharmaceutical distributor, including a mail order
25 pharmacy;
26 (B) prohibit a pharmacy or pharmacist from, or impose a
27 penalty on a pharmacy or pharmacist for:
28 (i) selling a lower cost alternative to an insured, if a
29 lower cost alternative is available; or
30 (ii) providing information to an insured under subsection
31 (d);
32 (C) discriminate against any pharmacy or pharmacist that
33 is:
34 (i) located within the geographic coverage area of the
35 health plan; and
36 (ii) willing to agree to, or accept, reasonable terms and
37 conditions established for participation in the insurer's,
38 pharmacy benefit manager's, other administrator's, or
39 health plan's network;
40 (D) impose limits, including quantity limits or refill
41 frequency limits, on an insured's access to medication from
42 a pharmacy that are more restrictive than those existing
SB 140—LS 6503/DI 141 9
1 for a pharmacy affiliate;
2 (E) subject to subsection (c), require or incentivize an
3 insured to receive pharmacy or pharmacist services from
4 a pharmacy affiliate, including:
5 (i) requiring or incentivizing an insured to obtain a
6 specialty drug from a pharmacy affiliate;
7 (ii) charging less cost sharing to insureds that use
8 pharmacy affiliates than what is charged to insureds that
9 use nonaffiliated pharmacies; and
10 (iii) providing any incentives for insureds that use
11 pharmacy affiliates that are not provided for insureds
12 that use nonaffiliated pharmacies;
13 (F) interfere with an insured's right to choose the insured's
14 network pharmacy of choice, such as:
15 (i) promoting one (1) participating pharmacy over
16 another;
17 (ii) offering a monetary advantage;
18 (iii) charging higher cost sharing; and
19 (iv) reducing an insured's allowable reimbursement for
20 pharmacy or pharmacist services;
21 (G) require a pharmacy or pharmacist to enter into an
22 additional contract with an affiliate of the insurer,
23 pharmacy benefit manager, or other administrator of
24 pharmacy benefits as a condition of entering into a
25 contract with this insurer, pharmacy benefit manager, or
26 administrator; or
27 (H) require a pharmacy or pharmacist to, as a condition of
28 a contract, agree to payment rates for any affiliate of the
29 insurer, pharmacy benefit manager, or other
30 administrator of pharmacy benefits that is not a party to
31 the contract; and
32 (2) shall:
33 (A) provide equal access and incentives to all pharmacies
34 within the insurer's, pharmacy benefit manager's, other
35 administrator's, or health plan's network; and
36 (B) offer all pharmacies located in the health plan's
37 geographic coverage area eligibility to participate in the
38 insurer's, pharmacy benefit manager's, other
39 administrator's, or health plan's network under identical
40 reimbursement terms for the provision of pharmacy or
41 pharmacist services.
42 (c) Subsection (b)(1)(E) may not be construed to prohibit:
SB 140—LS 6503/DI 141 10
1 (1) communications to insureds regarding networks and
2 prices if the communication is accurate and includes
3 information about all eligible nonaffiliated pharmacies; or
4 (2) an insurer, a pharmacy benefit manager, or any other
5 administrator of pharmacy benefits from:
6 (A) requiring an insured to utilize a network that may
7 include pharmacy affiliates in order to receive coverage
8 under the health plan; or
9 (B) providing financial incentives for utilizing the network,
10 if the insurer, pharmacy benefit manager, or other
11 administrator complies with this section and section 16 of
12 this chapter.
13 (d) A pharmacist shall have the right to provide an insured with
14 information regarding lower cost alternatives to assist the insured
15 in making informed decisions.
16 Sec. 19. (a) Any insured, pharmacy, or pharmacist impacted by
17 an alleged violation of this chapter may file a complaint with the
18 commissioner.
19 (b) The commissioner shall:
20 (1) review and investigate all complaints filed under this
21 section;
22 (2) issue, in writing, a determination to the insured,
23 pharmacy, or pharmacist as to whether a violation occurred;
24 and
25 (3) for alleged violations of section 17(a)(2)(E) of this chapter,
26 consult with the Indiana board of pharmacy in making the
27 determination of whether a violation occurred.
28 (c) An insurer, a pharmacy benefit manager, or any other
29 administrator of pharmacy benefits shall:
30 (1) respond to; and
31 (2) comply with;
32 any requests made by the commissioner under this section.
33 Sec. 20. (a) This section applies to a state employee health plan
34 (as defined in IC 5-10-8-6.7). If a pharmacy benefit manager is
35 used with regard to a state employee health plan, the commissioner
36 shall either:
37 (1) create a pharmacy benefit manager within the
38 department; or
39 (2) contract with an insurer, a pharmacy benefit manager, or
40 any other administrator of pharmacy benefits.
41 (b) All data collected by a contractor while administering a
42 contract under subsection (a)(2) is the property of the state.
SB 140—LS 6503/DI 141 11
1 Sec. 21. In addition to any other remedies, penalties, or damages
2 available under common law or statute, the commissioner may
3 order reimbursement to any person who has incurred a monetary
4 loss as a result of a violation of this chapter.
5 Sec. 22. This chapter applies to the extent that it is not in conflict
6 with federal law.
SB 140—LS 6503/DI 141 12
COMMITTEE REPORT
Mr. President: The Senate Committee on Health and Provider
Services, to which was referred Senate Bill No. 140, has had the same
under consideration and begs leave to report the same back to the
Senate with the recommendation that said bill be AMENDED as
follows:
Page 2, line 28, delete "and".
Page 2, line 30, delete "IC 27-1-24.5-12)." and insert "IC
27-1-24.5-12); and
(3) provides interoperability in the manner in which the data
is reported.".
Page 7, line 4, delete "administration" and insert "administrative".
Page 10, line 35, delete "or".
Page 11, line 1, delete "and".
Page 11, between lines 1 and 2, begin a new line double block
indented and insert:
"(G) require a pharmacy or pharmacist to enter into an
additional contract with an affiliate of the insurer,
pharmacy benefit manager, or other administrator of
pharmacy benefits as a condition of entering into a
contract with this insurer, pharmacy benefit manager, or
administrator; or
(H) require a pharmacy or pharmacist to, as a condition of
a contract, agree to payment rates for any affiliate of the
insurer, pharmacy benefit manager, or other
administrator of pharmacy benefits that is not a party to
the contract; and".
and when so amended that said bill do pass and be reassigned to the
Senate Committee on Appropriations.
(Reference is to SB 140 as introduced.)
CHARBONNEAU, Chairperson
Committee Vote: Yeas 10, Nays 1.
SB 140—LS 6503/DI 141 13
COMMITTEE REPORT
Mr. President: The Senate Committee on Appropriations, to which
was referred Senate Bill No. 140, has had the same under consideration
and begs leave to report the same back to the Senate with the
recommendation that said bill be AMENDED as follows:
Page 1, delete lines 1 through 17.
Page 2, delete lines 1 through 32.
Page 9, delete lines 14 through 31.
Page 9, line 32, delete "19." and insert "18.".
Page 11, line 41, delete "20." and insert "19.".
Page 12, between lines 15 and 16, begin a new paragraph and insert:
"Sec. 20. (a) This section applies to a state employee health plan
(as defined in IC 5-10-8-6.7). If a pharmacy benefit manager is
used with regard to a state employee health plan, the commissioner
shall either:
(1) create a pharmacy benefit manager within the
department; or
(2) contract with an insurer, a pharmacy benefit manager, or
any other administrator of pharmacy benefits.
(b) All data collected by a contractor while administering a
contract under subsection (a)(2) is the property of the state.".
Renumber all SECTIONS consecutively.
and when so amended that said bill do pass.
(Reference is to SB 140 as printed January 24, 2025.)
MISHLER, Chairperson
Committee Vote: Yeas 13, Nays 0.
SB 140—LS 6503/DI 141