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.
*sb0975*
SENATE BILL 975
J5 5lr2643
CF HB 1243
By: Senator Lam
Introduced and read first time: January 28, 2025
Assigned to: Finance
Committee Report: Favorable with amendments
Senate action: Adopted
Read second time: March 10, 2025
CHAPTER ______
AN ACT concerning 1
Health Insurance – Coverage for Specialty Drugs 2
FOR the purpose of prohibiting certain insurers, nonprofit health service plans, and health 3
maintenance organizations from excluding coverage for certain specialty drugs that 4
are administered or dispensed by a provider that meets certain criteria; requiring 5
the reimbursement rate for certain specialty drugs to meet certain criteria; and 6
generally relating to health insurance coverage for specialty drugs. 7
BY repealing and reenacting, without amendments, 8
Article – Insurance 9
Section 15–847(a)(1) and (5) 10
Annotated Code of Maryland 11
(2017 Replacement Volume and 2024 Supplement) 12
BY repealing and reenacting, with amendments, 13
Article – Insurance 14
Section 15–847(d), 15–1611.1, and 15–1612 15
Annotated Code of Maryland 16
(2017 Replacement Volume and 2024 Supplement) 17
BY adding to 18
Article – Insurance 19
Section 15–847(h) and 15–847.2 20
Annotated Code of Maryland 21
(2017 Replacement Volume and 2024 Supplement) 22 2 SENATE BILL 975
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 1
That the Laws of Maryland read as follows: 2
Article – Insurance 3
15–847. 4
(a) (1) In this section the following words have the meanings indicated. 5
(5) (i) “Specialty drug” means a prescription drug that: 6
1. is prescribed for an individual with a complex or chronic 7
medical condition or a rare medical condition; 8
2. costs $600 or more for up to a 30–day supply; 9
3. is not typically stocked at retail pharmacies; and 10
4. A. requires a difficult or unusual process of delivery to 11
the patient in the preparation, handling, storage, inventory, or distribution of the drug; or 12
B. requires enhanced patient education, management, or 13
support, beyond those required for traditional dispensing, before or after administration of 14
the drug. 15
(ii) “Specialty drug” does not include a prescription drug prescribed 16
to treat diabetes, HIV, or AIDS. 17
(d) Subject to SUBSECTION (H) OF THIS SECTION AND § 15–805 of this subtitle 18
[and], notwithstanding § 15–806 of this subtitle, [nothing in] AND EXCEPT AS PROVID ED 19
IN § 15–847.2 OF THIS SUBTITLE , this article or regulations adopted under this article 20
[precludes] DO NOT PRECLUDE an entity subject to this section from requiring a covered 21
specialty drug to be obtained through: 22
(1) a designated pharmacy or other source authorized under the Health 23
Occupations Article to dispense or administer prescription drugs; or 24
(2) a pharmacy participating in the entity’s provider network, if the entity 25
determines that the pharmacy: 26
(i) meets the entity’s performance standards; and 27
(ii) accepts the entity’s network reimbursement rates. 28
SENATE BILL 975 3
(H) THIS SECTION MAY NOT BE CONSTRUED TO SUPE RSEDE THE AUTHORITY 1
OF THE HEALTH SERVICES COST REVIEW COMMISSION TO SET RAT ES FOR 2
SPECIALTY DRUGS ADMI NISTERED TO PATIENTS IN A SETTING REGULAT ED BY THE 3
HEALTH SERVICES COST REVIEW COMMISSION. 4
15–847.2. 5
(A) IN THIS SECTION, “SPECIALTY DRUG ” HAS THE MEAN ING STATED IN § 6
15–847 OF THIS SUBTITLE . 7
(B) (1) THIS SECTION APPLIES TO: 8
(I) INSURERS AND NONPROF IT HEALTH SERVICE PL ANS THAT 9
PROVIDE COVERAGE FOR PRESCRIPTION DRUGS U NDER INDIVIDUAL , GROUP, OR 10
BLANKET HEALTH INSUR ANCE POLICIES OR CON TRACTS THAT ARE ISSUED OR 11
DELIVERED IN THE STATE; AND 12
(II) HEALTH MAINTENANCE O RGANIZATIONS THAT PR OVIDE 13
COVERAGE FOR PRESCRI PTION DRUGS UNDER IN DIVIDUAL OR GROUP CO NTRACTS 14
THAT ARE ISSUED OR D ELIVERED IN THE STATE. 15
(2) AN INSURER, A NONPROFIT HEALTH S ERVICE PLAN, OR A HEALTH 16
MAINTENANCE ORGANIZA TION THAT PROVIDES C OVERAGE FOR PRESCRIP TION 17
DRUGS THROUGH A PHAR MACY BENEFITS MANAGE R IS SUBJECT TO THE 18
REQUIREMENTS OF THIS SECTION. 19
(C) AN ENTITY SUBJECT TO THIS SECTION MAY NOT EXCLUDE COVERAGE 20
FOR A COVERED SPECIA LTY DRUG ADMINISTERED OR DISPENSED BY A PROVI DER 21
UNDER § 12–102 OF THE HEALTH OCCUPATIONS ARTICLE IF THE ENTITY 22
DETERMINES THAT : 23
(1) THE PROVIDER THAT AD MINISTERS OR DISPENS ES THE COVERED 24
SPECIALTY DRUG : 25
(I) IS AN IN–NETWORK PROVIDER OF COVERED MEDICAL 26
ONCOLOGY SERVICES ; AND 27
(II) COMPLIES WITH STATE REGULATIONS FOR THE 28
ADMINISTERING AND DI SPENSING OF SPECIALT Y DRUGS; AND 29
(2) THE COVERED SPECIALT Y DRUG IS: 30
(I) INFUSED, AUTO–INJECTED, OR AN ORAL TARGETED 31
IMMUNE MODULATOR ; OR 32 4 SENATE BILL 975
(II) AN ORAL ME DICATION THAT : 1
1. REQUIRES COMPLEX DOS ING BASED ON CLINICA L 2
PRESENTATION ; OR 3
2. IS USED CONCOMITANTL Y WITH OTHER INFUSIO N OR 4
RADIATION THERAPIES . 5
(D) (1) THE SUBJECT TO SUBSECTION (F) OF THIS SECTION , THE 6
REIMBURSEMENT RATE F OR SPECIALTY DRUGS COVERED UNDER THIS S ECTION 7
SHALL BE: 8
(1) (I) AGREED TO BY THE COV ERED, IN–NETWORK PROVIDER AND 9
THE ENTITY SUBJECT T O THIS SECTION; AND 10
(2) (II) BILLED AT A NONHOSPI TAL LEVEL OF CARE OR PLACE OF 11
SERVICE. 12
(2) UNLESS OTHERWISE AGRE ED TO BY THE COVERED, IN–NETWORK 13
PROVIDER AND THE ENT ITY SUBJECT TO THIS SECTION, THE REIMBURSEMENT RA TE 14
FOR SPECIALTY DRUGS COVERED UNDER THIS S ECTION MAY NOT EXCEE D THE RATE 15
APPLICABLE TO A DESI GNATED SPECIALTY PHA RMACY FOR DISPENSING THE 16
COVERED SPECIALTY DR UGS. 17
(E) THIS SECTION DOES NOT PROHIBIT AN ENTITY S UBJECT TO THIS 18
SECTION FROM REFUSIN G TO AUTHORIZE OR AP PROVE OR FROM DENYIN G 19
COVERAGE FOR A COVER ED SPECIALTY DRUG AD MINISTERED OR DISPEN SED BY A 20
PROVIDER IF ADMINIST ERING OR DISPENSING THE DRUG FAILS TO SA TISFY 21
MEDICAL NECESSITY CR ITERIA. 22
(F) THIS SECTION MAY NOT BE CONSTRUED TO SUPE RSEDE THE AUTHORITY 23
OF THE HEALTH SERVICES COST REVIEW COMMISSION TO SET RAT ES FOR 24
SPECIALTY DRUGS ADMI NISTERED TO PATIENTS IN A SETTING REGULAT ED BY THE 25
HEALTH SERVICES COST REVIEW COMMISSION. 26
15–1611.1. 27
(a) This section applies only to a pharmacy benefits manager that provides 28
pharmacy benefits management services on behalf of a carrier. 29
(b) Except as provided in subsection (c) of this section, a pharmacy benefits 30
manager may not require that a beneficiary use a specific pharmacy or entity to fill a 31
prescription if: 32
SENATE BILL 975 5
(1) the pharmacy benefits manager or a corporate affiliate of the pharmacy 1
benefits manager has an ownership interest in the pharmacy or entity; or 2
(2) the pharmacy or entity has an ownership interest in the pharmacy 3
benefits manager or a corporate affiliate of the pharmacy benefits manager. 4
(c) [A] EXCEPT AS PROVIDED IN § 15–847.2 OF THIS TITLE, A pharmacy 5
benefits manager may require a beneficiary to use a specific pharmacy or entity for a 6
specialty drug as defined in § 15–847 of this title. 7
15–1612. 8
(a) This section applies only to a pharmacy benefits manager that provides 9
pharmacy benefits management services on behalf of a carrier. 10
(b) This section does not apply to reimbursement: 11
(1) EXCEPT AS PROVIDED I N § 15–847.2 OF THIS TITLE, for specialty 12
drugs; 13
(2) for mail order drugs; or 14
(3) to a chain pharmacy with more than 15 stores or a pharmacist who is 15
an employee of the chain pharmacy. 16
(c) A pharmacy benefits manager may not reimburse a pharmacy or pharmacist 17
for a pharmaceutical product or pharmacist service in an amount less than the amount that 18
the pharmacy benefits manager reimburses itself or an affiliate for providing the same 19
product or service. 20
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall apply to all 21
policies, contracts, and health benefit plans issued, delivered, or renewed in the State on or 22
after January 1, 2026. 23
SECTION 3. AND BE IT FURTHER ENACTED, That this Act shall take effect 24
January 1, 2026. 25