EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
*sb0438*
SENATE BILL 438
J5 EMERGENCY BILL 5lr2543
SB 1021/24 – FIN CF 5lr2785
By: Senator Lam
Introduced and read first time: January 21, 2025
Assigned to: Finance
A BILL ENTITLED
AN ACT concerning 1
Pharmacy Benefits Administration – Maryland Medical Assistance Program and 2
Pharmacy Benefits Managers 3
FOR the purpose of altering the reimbursement levels for drug products that the Maryland 4
Medical Assistance Program is required to establish and that pharmacy benefits 5
managers that contract with a pharmacy on behalf of a managed care organization 6
are required to reimburse the pharmacy; altering the definition of “purchaser” for 7
purposes of certain provisions of law regulating pharmacy benefits managers to 8
include certain insurers, nonprofit health service plans, and health maintenance 9
organizations; and generally relating to pharmacy benefits administration. 10
BY repealing and reenacting, with amendments, 11
Article – Health – General 12
Section 15–118(b) 13
Annotated Code of Maryland 14
(2023 Replacement Volume and 2024 Supplement) 15
BY adding to 16
Article – Health – General 17
Section 15–118(f) 18
Annotated Code of Maryland 19
(2023 Replacement Volume and 2024 Supplement) 20
BY repealing and reenacting, with amendments, 21
Article – Insurance 22
Section 15–1601(s) 23
Annotated Code of Maryland 24
(2017 Replacement Volume and 2024 Supplement) 25
BY adding to 26
Article – Insurance 27 2 SENATE BILL 438
Section 15–1632 1
Annotated Code of Maryland 2
(2017 Replacement Volume and 2024 Supplement) 3
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 4
That the Laws of Maryland read as follows: 5
Article – Health – General 6
15–118. 7
(b) (1) [Except] SUBJECT TO PARAGRAPH (2) OF THIS SUBSECTION A ND 8
EXCEPT as provided under paragraph [(2)] (3) of this subsection, the Program shall 9
establish [maximum] MINIMUM reimbursement levels for the drug products for which 10
there is a generic equivalent authorized under § 12–504 of the Health Occupations Article[, 11
based on the cost of the generic product]. 12
(2) EXCEPT AS PROVIDED IN PARAGRAPH (4) OF THIS SUBSECTION , 13
MINIMUM REIMBURSEMEN T LEVELS ESTABLISHED UNDER PARAGRAPH (1) OF THIS 14
SUBSECTION SHALL BE AT LEAST EQUAL TO TH E NATIONAL AVERAGE DRUG 15
ACQUISITION COST OF THE GENERIC PRODUCT PLUS THE FEE –FOR–SERVICE 16
PROFESSIONAL DISPENS ING FEE DETERMINED B Y THE DEPARTMENT IN 17
ACCORDANCE WITH THE MOST RECENT IN –STATE COST–OF–DISPENSING SURVEY . 18
[(2)] (3) [If] EXCEPT AS PROVIDED IN PARAGRAPH (4) OF THIS 19
SUBSECTION, IF a prescriber directs a specific brand name drug, the reimbursement level 20
shall be based on the [cost] NATIONAL AVERAGE DRUG ACQUISITION COST of the 21
brand name product PLUS THE FEE–FOR–SERVICE PROFESSIONAL DISPENSING FEE 22
DETERMINED BY THE DEPARTMENT IN ACCORDA NCE WITH THE MOST RECENT 23
IN–STATE COST–OF–DISPENSING SURVEY . 24
(4) PARAGRAPHS (2) AND (3) OF THIS SUBSECTION D O NOT APPLY TO: 25
(I) A PHARMACY OWNED BY OR UNDER THE SAME CORPO RATE 26
AFFILIATION AS A PHA RMACY BENEFITS MANAG ER; OR 27
(II) A MAIL ORDER PHARMACY . 28
(F) THE PROVISIONS OF § 15–1632 OF THE INSURANCE ARTICLE APPLY TO 29
A MANAGED CARE ORGAN IZATION THAT USES A PHARMACY BENEFITS MA NAGER TO 30
MANAGE PRESCRIPTION DRUG COVERAGE BENEFI TS ON BEHALF OF THE MANAGED 31
CARE ORGANIZATION . 32
Article – Insurance 33
SENATE BILL 438 3
15–1601. 1
(s) (1) “Purchaser” means a person that offers a plan or program in the State, 2
including the State Employee and Retiree Health and Welfare Benefits Program, AN 3
INSURER, A NONPROFIT HEALTH S ERVICE PLAN , OR A HEALTH MAINTENA NCE 4
ORGANIZATION , that: 5
[(1)] (I) provides prescription drug coverage or benefits in the State; and 6
[(2)] (II) enters into an agreement with a pharmacy benefits manager for 7
the provision of pharmacy benefits management services. 8
(2) “PURCHASER” DOES NOT INCLUDE A N ONPROFIT HEALTH 9
MAINTENANCE ORGANIZA TION THAT: 10
(I) OPERATES AS A GROUP MODEL; 11
(II) PROVIDES SERVICES SO LELY TO A MEMBER OR PATIENT OF 12
THE NONPROFIT HEALTH MAINTENANCE ORGANIZA TION; AND 13
(III) FURNISHES SERVICES T HROUGH THE INTERNAL PHARMACY 14
OPERATIONS OF THE NONPROFIT HEALTH MAINTENANCE ORGANIZA TION. 15
15–1632. 16
A PHARMACY BENEFITS MA NAGER THAT CONTRACTS WITH A PHARMACY ON 17
BEHALF OF A MANAGED CARE ORGANIZATION , AS DEFINED IN § 15–101 OF THE 18
HEALTH – GENERAL ARTICLE, SHALL REIMBURSE THE PHARMACY AN AMOUNT 19
THAT IS AT LEAST EQU AL TO THE NATIONAL AVERAGE DRUG ACQUISITION COST 20
PLUS THE FEE–FOR–SERVICE PROFESSIONAL DISPENSING FEE DETER MINED BY THE 21
MARYLAND DEPARTMENT OF HEALTH FOR THE MARYLAND MEDICAL ASSISTANCE 22
PROGRAM IN ACCORDANCE WITH THE MOST RECENT IN–STATE 23
COST–OF–DISPENSING SURVEY . 24
SECTION 2. AND BE IT FURTHER ENACTED, That this Act is an emergency 25
measure, is necessary for the immediate preservation of the public health or safety, has 26
been passed by a yea and nay vote supported by three–fifths of all the members elected to 27
each of the two Houses of the General Assembly, and shall take effect from the date it is 28
enacted. 29