EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
Underlining indicates amendments to bill.
Strike out indicates matter stricken from the bill by amendment or deleted from the law by
amendment.
*hb0813*
HOUSE BILL 813
J5 EMERGENCY BILL 5lr2785
HB 880/24 – HGO CF SB 438
By: Delegates S. Johnson and A. Johnson, A. Johnson, Alston, Bagnall, Bhandari,
Cullison, Guzzone, Hill, Hutchinson, Kaiser, Kerr, Kipke, Lopez, Martinez,
M. Morgan, Pena–Melnyk, Reilly, Rosenberg, Ross, Szeliga, Taveras,
White Holland, Woods, and Woorman
Introduced and read first time: January 29, 2025
Assigned to: Health and Government Operations
Committee Report: Favorable with amendments
House action: Adopted
Read second time: March 1, 2025
CHAPTER ______
AN ACT concerning 1
Pharmacy Benefits Administration – Maryland Medical Assistance Program and 2
Pharmacy Benefits Managers 3
Maryland Insurance Administration and Maryland Department of Health – 4
Workgroup to Study Pharmacy Benefits Managers 5
FOR the purpose of altering the reimbursement levels for drug products that the Maryland 6
Medical Assistance Program is required to establish and that pharmacy benefits 7
managers that contract with a pharmacy on behalf of a managed care organization 8
are required to reimburse the pharmacy; altering the definition of “purchaser” for 9
purposes of certain provisions of law regulating pharmacy benefits managers to 10
include certain insurers, nonprofit health service plans, and health maintenance 11
organizations requiring the Maryland Insurance Administration and the Maryland 12
Department of Health to convene a workgroup to study certain issues related to 13
pharmacy benefits managers and report to certain committees on or before a certain 14
date; and generally relating to pharmacy benefits administration a workgroup to 15
study pharmacy benefits managers. 16
BY repealing and reenacting, with amendments, 17
Article – Health – General 18
Section 15–118(b) 19
Annotated Code of Maryland 20
(2023 Replacement Volume and 2024 Supplement) 21 2 HOUSE BILL 813
BY adding to 1
Article – Health – General 2
Section 15–118(f) 3
Annotated Code of Maryland 4
(2023 Replacement Volume and 2024 Supplement) 5
BY repealing and reenacting, with amendments, 6
Article – Insurance 7
Section 15–1601(s) 8
Annotated Code of Maryland 9
(2017 Replacement Volume and 2024 Supplement) 10
BY adding to 11
Article – Insurance 12
Section 15–1632 13
Annotated Code of Maryland 14
(2017 Replacement Volume and 2024 Supplement) 15
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 16
That the Laws of Maryland read as follows: 17
Article – Health – General 18
15–118. 19
(b) (1) [Except] SUBJECT TO PARAGRAPH (2) OF THIS SUBSECTION A ND 20
EXCEPT as provided under paragraph [(2)] (3) of this subsection, the Program shall 21
establish [maximum] MINIMUM reimbursement levels for the drug products for which 22
there is a generic equivalent authorized under § 12–504 of the Health Occupations Article[, 23
based on the cost of the generic product]. 24
(2) EXCEPT AS PROVIDED IN PARAGRAPH (4) OF THIS SUBSECTION , 25
MINIMUM REIMBURSEMEN T LEVELS ESTABLISHED UNDER PARAGRAPH (1) OF THIS 26
SUBSECTION SHALL BE AT LEAST EQUAL TO TH E NATIONAL AVERAGE DRUG 27
ACQUISITION COST OF THE GENERIC PRODU CT PLUS THE FEE –FOR–SERVICE 28
PROFESSIONAL DISPENS ING FEE DETERMINED B Y THE DEPARTMENT IN 29
ACCORDANCE WITH THE MOST RECENT IN –STATE COST–OF–DISPENSING SURVEY . 30
[(2)] (3) [If] EXCEPT AS PROVIDED IN PARAGRAPH (4) OF THIS 31
SUBSECTION, IF a prescriber directs a specific brand name drug, the reimbursement level 32
shall be based on the [cost] NATIONAL AVERAGE DRUG ACQUISITION COST of the 33
brand name product PLUS THE FEE–FOR–SERVICE PROFESSIONAL DISPENSING FEE 34
DETERMINED BY THE DEPARTMENT IN ACC ORDANCE WITH THE MOS T RECENT 35
IN–STATE COST–OF–DISPENSING SURVEY . 36
HOUSE BILL 813 3
(4) PARAGRAPHS (2) AND (3) OF THIS SUBSECTION D O NOT APPLY TO: 1
(I) A PHARMACY OWNED BY OR UNDER THE SAME CORPO RATE 2
AFFILIATION AS A PHA RMACY BENEFITS MANAG ER; OR 3
(II) A MAIL ORDER PHARMACY. 4
(F) THE PROVISIONS OF § 15–1632 OF THE INSURANCE ARTICLE APPLY TO 5
A MANAGED CARE ORGAN IZATION THAT USES A PHARMACY BENEFITS MA NAGER TO 6
MANAGE PRESCRIPTION DRUG COVERAGE BENEFI TS ON BEHALF OF THE MANAGED 7
CARE ORGANIZATION . 8
Article – Insurance 9
15–1601. 10
(s) (1) “Purchaser” means a person that offers a plan or program in the State, 11
including the State Employee and Retiree Health and Welfare Benefits Program, AN 12
INSURER, A NONPROFIT HEALTH S ERVICE PLAN , OR A HEALTH MAINTENA NCE 13
ORGANIZATION , that: 14
[(1)] (I) provides prescription drug coverage or benefits in the State; and 15
[(2)] (II) enters into an agreement with a pharmacy benefits manager for 16
the provision of pharmacy benefits management services. 17
(2) “PURCHASER” DOES NOT INCLUDE A NONPROFIT HEALTH 18
MAINTENANCE ORGANIZA TION THAT: 19
(I) OPERATES AS A GROUP MODEL; 20
(II) PROVIDES SERVICES SO LELY TO A MEMBER OR PATIENT OF 21
THE NONPROFIT HEALTH MAINTENANCE ORGANIZA TION; AND 22
(III) FURNISHES SERVICES T HROUGH THE INTERNAL PHARMACY 23
OPERATIONS OF THE NO NPROFIT HEALTH MAINT ENANCE ORGANIZATION . 24
15–1632. 25
A PHARMACY BENEFITS MA NAGER THAT CONTRACTS WITH A PHARMACY ON 26
BEHALF OF A MANAGED CARE ORGANIZATION , AS DEFINED IN § 15–101 OF THE 27
HEALTH – GENERAL ARTICLE, SHALL REIMBURSE THE PHARMACY AN AMOUNT 28
THAT IS AT LEAST EQU AL TO THE NATIONAL AVERAGE DRUG ACQUISITION COST 29
PLUS THE FEE–FOR–SERVICE PROFESSIONAL DISPENSING FEE DETER MINED BY THE 30
MARYLAND DEPARTMENT OF HEALTH FOR THE MARYLAND MEDICAL ASSISTANCE 31 4 HOUSE BILL 813
PROGRAM IN ACCORDANCE WITH THE MOST RECENT IN –STATE 1
COST–OF–DISPENSING SURVEY . 2
SECTION 2. AND BE IT FURTHER ENACTED, That this Act is an emergency 3
measure, is necessary for the immediate preservation of the public health or safety, has 4
been passed by a yea and nay vote supported by three–fifths of all the members elected to 5
each of the two Houses of the General Assembly, and shall take effect from the date it is 6
enacted. 7
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 8
That the Maryland Insurance Administration and the Maryland Department of Health 9
shall: 10
(1) convene a workgroup of interested stakeholders, including community 11
pharmacies from both chain and independent settings, pharmacy services administrative 12
organizations, pharmacists, pharmacy benefits managers, and managed care organizations 13
and third–party experts in the field of drug pricing in Medicaid; 14
(2) review reimbursement for pharmacists, including: 15
(i) existing Maryland Medical Assistance Program requirements for 16
pharmacy benefits managers and managed care organizations related to dispensing fee 17
reimbursement, pharmacy benefits managers fees charged to pharmacies and the 18
Maryland Medical Assistance Program, transparency in pricing and reimbursement data, 19
specialty drug designations, and appeals processes; 20
(ii) how other states’ pharmacy benefits services operate in 21
Medicaid, including in Ohio, Kentucky, New York, California, and West Virginia; 22
(iii) measures that offset the Department’s costs to fund the Medicaid 23
Managed Care Program and adop t NADAC plus the Fee–for–Service Professional 24
Dispensing, including: 25
1. savings associated with NADAC ingredient cost pricing 26
and managed care organizations; and 27
2. pharmacy benefits managers administrative fee 28
consolidation and rebate allocations; and 29
(iv) strategies for adopting pharmacy reimbursement parity and 30
drug pricing transparency; 31
(3) review coverage requirements for specialty drugs, including: 32
(i) which drugs are considered specialty for purposes of formularies 33
across carriers and pharmacy benefits managers; and 34
HOUSE BILL 813 5
(ii) what these drugs have in common for purposes of developing a 1
new definition for “specialty drug”; 2
(4) review ERISA exemptions for pharmacy benefits management 3
regulation, including: 4
(i) the scope of Rutledge v. Pharmaceutical Care Management 5
Association and subsequent case law and federal guidance; 6
(ii) how other states have responded to the Rutledge decision; and 7
(iii) what, if any, other State laws should be amended; 8
(5) on or before December 31, 2025, submit an interim report on their 9
findings and recommendations to the Senate Finance Committee and the House Health 10
and Government Operations Committee, in accordance with § 2 –1257 of the State 11
Government Article; and 12
(6) on or before December 31, 2026, submit a final report on their findings 13
and recommendations to the Senate Finance Committee and the House Health and 14
Government Operations Committee, in accordance with § 2–1257 of the State Government 15
Article. 16
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect June 17
1, 2025. 18
Approved:
________________________________________________________________________________
Governor.
________________________________________________________________________________
Speaker of the House of Delegates.
________________________________________________________________________________
President of the Senate.