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.
Italics indicate opposite chamber/conference committee amendments.
*hb0813*
HOUSE BILL 813
J5 EMERGENCY BILL (5lr2785)
ENROLLED BILL
— Health and Government Operations/Finance —
Introduced 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
Read and Examined by Proofreaders:
_______________________________________________
Proofreader.
_______________________________________________
Proofreader.
Sealed with the Great Seal and presented to the Governor, for his approval this
_______ day of _______________ at _________________ _______ o’clock, ________M.
______________________________________________
Speaker.
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 2 HOUSE BILL 813
Department of Health, in consultation with the Prescription Drug Affordability 1
Board, to convene a workgroup to study certain issues related to pharmacy benefits 2
managers and report to certain committees on or before a certain date; and generally 3
relating to pharmacy benefits administration a workgroup to study pharmacy 4
benefits managers. 5
BY repealing and reenacting, with amendments, 6
Article – Health – General 7
Section 15–118(b) 8
Annotated Code of Maryland 9
(2023 Replacement Volume and 2024 Supplement) 10
BY adding to 11
Article – Health – General 12
Section 15–118(f) 13
Annotated Code of Maryland 14
(2023 Replacement Volume and 2024 Supplement) 15
BY repealing and reenacting, with amendments, 16
Article – Insurance 17
Section 15–1601(s) 18
Annotated Code of Maryland 19
(2017 Replacement Volume and 2024 Supplement) 20
BY adding to 21
Article – Insurance 22
Section 15–1632 23
Annotated Code of Maryland 24
(2017 Replacement Volume and 2024 Supplement) 25
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 26
That the Laws of Maryland read as follows: 27
Article – Health – General 28
15–118. 29
(b) (1) [Except] SUBJECT TO PARAGRAPH (2) OF THIS SUBSECTION A ND 30
EXCEPT as provided under paragraph [(2)] (3) of this subsection, the Program shall 31
establish [maximum] MINIMUM reimbursement levels for the drug products for which 32
there is a generic equivalent authorized under § 12–504 of the Health Occupations Article[, 33
based on the cost of the generic product]. 34
(2) EXCEPT AS PROVIDED IN PARAGRAPH (4) OF THIS SUBSECTION , 35
MINIMUM REIMBURSEMEN T LEVELS ESTABLISHED UNDER PARAGRAPH (1) OF THIS 36
SUBSECTION SHALL BE AT LEAST EQUAL TO TH E NATIONAL AVERAGE DRUG 37 HOUSE BILL 813 3
ACQUISITION COST OF THE GENERIC P RODUCT PLUS THE FEE –FOR–SERVICE 1
PROFESSIONAL DISPENS ING FEE DETERMINED B Y THE DEPARTMENT IN 2
ACCORDANCE WITH THE MOST RECENT IN –STATE COST–OF–DISPENSING SURVEY . 3
[(2)] (3) [If] EXCEPT AS PROVIDED IN PARAGRAPH (4) OF THIS 4
SUBSECTION, IF a prescriber directs a specific brand name drug, the reimbursement level 5
shall be based on the [cost] NATIONAL AVERAGE DRUG ACQUISITION COST of the 6
brand name product PLUS THE FEE–FOR–SERVICE PROFESSIONAL DISPENSING FEE 7
DETERMINED BY THE DEPARTMENT IN ACCORDA NCE WITH THE MOST RE CENT 8
IN–STATE COST–OF–DISPENSING SURVEY . 9
(4) PARAGRAPHS (2) AND (3) OF THIS SUBSECTION D O NOT APPLY TO: 10
(I) A PHARMACY OWNED BY OR UNDER THE SAME CORPO RATE 11
AFFILIATION AS A PHA RMACY BENEFI TS MANAGER; OR 12
(II) A MAIL ORDER PHARMACY . 13
(F) THE PROVISIONS OF § 15–1632 OF THE INSURANCE ARTICLE APPLY TO 14
A MANAGED CARE ORGAN IZATION THAT USES A PHARMACY BENEFITS MA NAGER TO 15
MANAGE PRESCRIPTION DRUG COVERAGE BENEFI TS ON BEHALF OF THE MANAGED 16
CARE ORGANIZATION . 17
Article – Insurance 18
15–1601. 19
(s) (1) “Purchaser” means a person that offers a plan or program in the State, 20
including the State Employee and Retiree Health and Welfare Benefits Program, AN 21
INSURER, A NONPROFIT HEALTH S ERVICE PLAN , OR A HEALTH MAINTENANCE 22
ORGANIZATION , that: 23
[(1)] (I) provides prescription drug coverage or benefits in the State; and 24
[(2)] (II) enters into an agreement with a pharmacy benefits manager for 25
the provision of pharmacy benefits management services. 26
(2) “PURCHASER” DOES NOT INCLUDE A N ONPROFIT HEALTH 27
MAINTENANCE ORGANIZA TION THAT: 28
(I) OPERATES AS A GROUP MODEL; 29
(II) PROVIDES SERVICES SO LELY TO A MEMBER OR PATIENT OF 30
THE NONPROFIT HEALTH MAINTENANCE ORGANIZA TION; AND 31 4 HOUSE BILL 813
(III) FURNISHES SERVICES THROUGH THE INTERNAL PHARMACY 1
OPERATIONS OF THE NO NPROFIT HEALTH MAINT ENANCE ORGANIZATION . 2
15–1632. 3
A PHARMACY BENEFITS MA NAGER THAT CONTRACTS WITH A PHARMACY ON 4
BEHALF OF A MANAGED CARE ORGANIZATION , AS DEFINED IN § 15–101 OF THE 5
HEALTH – GENERAL ARTICLE, SHALL REIMBURSE THE PHARMACY AN AMOUNT 6
THAT IS AT LEAST EQU AL TO THE NATIONAL AVERAGE DRUG ACQUISITION COST 7
PLUS THE FEE–FOR–SERVICE PROFESSIONAL DISPENSING FEE DETER MINED BY THE 8
MARYLAND DEPARTMENT OF HEALTH FOR THE MARYLAND MEDICAL ASSISTANCE 9
PROGRAM IN ACCORDANCE WITH T HE MOST RECENT IN –STATE 10
COST–OF–DISPENSING SURVEY . 11
SECTION 2. AND BE IT FURTHER ENACTED, That this Act is an emergency 12
measure, is necessary for the immediate preservation of the public health or safety, has 13
been passed by a yea and nay vote supported by three–fifths of all the members elected to 14
each of the two Houses of the General Assembly, and shall take effect from the date it is 15
enacted. 16
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 17
That the Maryland Insurance Administration and the Maryland Department of Health, in 18
consultation with the Prescription Drug Affordability Board, shall: 19
(1) convene a workgroup of interested stakeholders, including community 20
pharmacies from both chain and independent settings, pharmacy services administrative 21
organizations, health insurance carriers, plan sponsor representatives, drug wholesalers 22
and distributors, non–pharmacy benefit manager–owned mail order pharmacies, brand 23
name and generic drug manufacturers, pharmacists, pharmacy benefits managers, and 24
managed care organizations, and third–party experts in the field of drug pricing in 25
Medicaid; 26
(2) review reimbursement for pharmacists, including: 27
(i) existing Maryland Medical Assistance Program requirements for 28
pharmacy benefits managers and managed care organizations related to dispensing fee 29
reimbursement, pharmacy benefits managers fees charged to pharmacies and the 30
Maryland Medical Assistance Program, transparency in pricing and reimbursement data, 31
specialty drug designations, and appeals processes; 32
(ii) how other states’ pharmacy benefits services operate in 33
Medicaid, including in Ohio, Kentucky, New York, California, and West Virginia; 34
HOUSE BILL 813 5
(iii) measures that offset the Department’s costs to fund the Medicaid 1
Managed Care Program and adopt NADAC plus the Fee –for–Service Professional 2
Dispensing, including: 3
1. savings associated with NADAC ingredient cost pricing 4
and managed care organizations; and 5
2. pharmacy benefits managers administrative fee 6
consolidation and rebate allocations; and 7
(iv) strategies for adopting pharmacy reimbursement parity and 8
drug pricing transparency; 9
(3) review coverage requirements for specialty drugs, including: 10
(i) which drugs are considered specialty for purposes of formularies 11
across carriers and pharmacy benefits managers; and 12
(ii) what these drugs have in common for purposes of developing a 13
new definition for “specialty drug”; 14
(4) review ERISA exemptions for pharmacy benefits management 15
regulation, including: 16
(i) the scope of Rutledge v. Pharmaceutical Care Management 17
Association and subsequent case law and federal guidance; 18
(ii) how other states have responded to the Rutledge decision; and 19
(iii) what, if any, other State laws should be amended; 20
(5) review the costs associated with pharmacies contracting with 21
commercial plans versus pharmacies contracting with the Maryland Medical Assistance 22
Program; 23
(6) review provisions of State law regarding pharmacy benefit managers, 24
specialty pharmacies, and anti–steering, including: 25
(i) § 15–1611.1 of the Insurance Article related to the use of specific 26
pharmacies or entities and the effect the section has on pharmacy costs in the fully insured 27
market; and 28
(ii) § 15–1612 of the Insurance Article related to reimbursement and 29
the effect the section has on pharmacy costs in the fully insured market; 30
(5) (7) on or before December 31, 2025, submit an interim report on their 31
findings and recommendations to the Senate Finance Committee and the House Health 32 6 HOUSE BILL 813
and Government Operations Committee, in accordance with § 2 –1257 of the State 1
Government Article; and 2
(6) (8) on or before December 31, 2026, submit a final report on their findings 3
and recommendations to the Senate Finance Comm ittee and the House Health and 4
Government Operations Committee, in accordance with § 2–1257 of the State Government 5
Article. 6
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect June 7
1, 2025. 8
Approved:
________________________________________________________________________________
Governor.
________________________________________________________________________________
Speaker of the House of Delegates.
________________________________________________________________________________
President of the Senate.