An Act
ENROLLED SENATE
BILL NO. 737 By: McCortney, Taylor, Rader,
Standridge, Pederson,
Burns, Kidd, Murdock,
Garvin, Rogers, and Jech of
the Senate
and
McEntire, Phillips, and
Randleman of the House
An Act relating to pharmacy benefits management;
amending 36 O.S. 2021, Section 6960, which relates to
definitions; adding definition of provider and spread
pricing; deleting definition; amending 36 O.S. 202 1,
Section 6962, which relates to compliance review;
updating reference; addi ng prohibited activities ;
adding duties of pharmacy benefits managers;
authorizing Commissioner to take certain actions on
PBM licenses for certain violations; authorizing fine
for violation of certain acts; authorizing Insurance
Commissioner to enforce Pa tient’s Right to Pharmacy
Choice Act and investigate violations of certain
acts; specifying that operating without a PBM license
is a violation of Patient ’s Right to Pharmacy Choice
Act; specifying certain hearings be conducted
pursuant to Administrative P rocedures Act;
establishing procedures for certain hearings;
authorizing full stenographic record of hearing
proceedings in certain circumstances; providing for
payment of certain costs and fees; authorizing appeal
from certain final order of Commissioner; authorizing
Commissioner to require certain reporting from PBMs
in certain circumstances; providing for codification;
and declaring an emergency.
ENR. S. B. NO. 737 Page 2
SUBJECT: Pharmacy benefits management
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 36 O.S. 202 1, Section 6960, is
amended to read as follows:
Section 6960. For purposes of the Patient’s Right to Pharmacy
Choice Act:
1. “Health insurer” means any corporation, association, benefit
society, exchange, partnership or individ ual licensed by the
Oklahoma Insurance Code;
2. “Health insurer payor” means a health insurance company,
health maintenance organization, union, hospital and medical
services organization or any entity providing or admin istering a
self-funded health benefit plan;
3. “Mail-order pharmacy” means a pharmacy licensed by this
state that primarily dispenses and delivers covered drugs via common
carrier;
3. 4. “Pharmacy benefits manager” or “PBM” means a person that
performs pharmacy benefits management and any other person acting
for such person under a contractual or employment relationship in
the performance of pharmacy benefits management for a managed -care
company, nonprofit hospital, medical service organization, insurance
company, third-party payor or a health program administered by a
department of this state;
4. “Pharmacy and therapeutics committee” or “P&T committee”
means a committee at a hospital or a health insurance plan that
decides which drugs will appear on that entity’s drug formulary
5. “Provider” means a pharmacy, as defined in Section 353.1 of
Title 59 of the Oklahoma Statutes or an agent or representative of a
pharmacy;
ENR. S. B. NO. 737 Page 3
5. 6. “Retail pharmacy network” means retail pharmacy providers
contracted with a PBM in which the pharmacy primari ly fills and
sells prescriptions via a retail, storefront location;
6. 7. “Rural service area” means a five -digit ZIP code in which
the population density is less than one thousand (1,000) individuals
per square mile;
7. 8. “Spread pricing” means a pre scription drug pricing model
utilized by a pharmacy benefits manager in which the PBM charges a
health benefit plan a contracted price for prescription drugs that
differs from the amount the PBM directly or indirectly pays the
pharmacy or pharmacist for pr oviding pharmacy services;
8. 9. “Suburban service area” means a five -digit ZIP code in
which the population density is between one thousand (1,000) and
three thousand (3,000) individuals per square mile; and
9. 10. “Urban service area” means a five -digit ZIP code in
which the population density is greater than three thousand (3,000)
individuals per square mile.
SECTION 2. AMENDATORY 36 O.S. 202 1, Section 6962, is
amended to read as follows:
Section 6962. A. The Oklahoma In surance Department shall
review and approve retail pharmacy network access for all pharmacy
benefits managers (PBMs) to ensure compliance with Section 4 of this
act 6961 of this title.
B. A PBM, or an agent of a PBM, shall not:
1. Cause or knowingly pe rmit the use of advertisement,
promotion, solicitation, representation, proposal or offer that is
untrue, deceptive or misleading;
2. Charge a pharmacist or pharmacy a fee related to the
adjudication of a claim , including without limitation a fee for:
a. the submission of a claim,
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b. enrollment or participation in a retail pharmacy
network, or
c. the development or management of claims processing
services or claims payment services related to
participation in a retail pharmacy network;
3. Reimburse a pharmacy or pharmacist in the state an amount
less than the amount that the PBM reimburses a pharmacy owned by or
under common ownership with a PBM for providing the same covered
services. The reimbursement amount paid to the pharmacy shall be
equal to the reimbursement amount calculated on a per -unit basis
using the same generic product identifier or generic code number
paid to the PBM-owned or PBM-affiliated pharmacy;
4. Deny a pharmacy provider the opportunity to participate in
any pharmacy network a t preferred participation status if the
pharmacy provider is willing to accept the terms and conditions that
the PBM has established for other pharmacies providers as a
condition of preferred network participation status;
5. Deny, limit or terminate a pharmacy’s provider’s contract
based on employment status of any employee who has an active license
to dispense, despite probation status, with the State Board of
Pharmacy;
6. Retroactively deny or reduce reimbursement for a covered
service claim after ret urning a paid claim response as part of the
adjudication of the claim, unless:
a. the original claim was submitted fraudulently, or
b. to correct errors identified in an audit, so long as
the audit was conducted in compliance with Sections
356.2 and 356.3 of Title 59 of the Oklahoma Statutes;
or
7. Fail to make any payment due to a pharmacy or pharmacist for
covered services properly re ndered in the event a PBM terminates a
pharmacy or pharmacist provider from a pharmacy benefits manager
network;
ENR. S. B. NO. 737 Page 5
8. Conduct or practice spread pricing, as defined in Section 1
of this act, in this state; or
9. Charge a pharmacist or pharmacy a fee related to
participation in a retail pharmacy network including but not limited
to the following:
a. an application fee,
b. an enrollment or participation fee ,
c. a credentialing or re -credentialing fee,
d. a change of ownership fee , or
e. a fee for the development or management of claims
processing services or claims payment services .
C. The prohibitions under this sec tion shall apply to contracts
between pharmacy benefits managers and pharmacists or pharmacies
providers for participation in retail pharmacy networks.
1. A PBM contract shall:
a. not restrict, directly or indirectly, any pharmacy
that dispenses a presc ription drug from informing, or
penalize such pharmacy for informing, an individual of
any differential between the individual’s out-of-
pocket cost or coverage with respect to acquisition of
the drug and the amount an individual would pay to
purchase the drug directly, and
b. ensure that any entity that provides pharmacy benefits
management services under a contract with any such
health plan or health insurance coverage does not,
with respect to such plan or coverage, restrict,
directly or indirectly, a ph armacy that dispenses a
prescription drug from informing, or penalize such
pharmacy for informing, a covered individual of any
differential between the individual’s out -of-pocket
cost under the plan or coverage with respect to
acquisition of the drug and t he amount an individual
ENR. S. B. NO. 737 Page 6
would pay for acquisition of the drug without using
any health plan or health insurance coverage.
2. A pharmacy benefits manager’s contract with a participating
pharmacist or pharmacy provider shall not prohibit, restrict or
limit disclosure of information to the Insurance Commissioner, law
enforcement or state and federal governmental officials
investigating or examining a complaint or conducting a review of a
pharmacy benefits manager’s compliance with the requirements under
the Patient’s Right to Pharmacy Choice Act.
3. D. A pharmacy benefits manager shall establish:
1. Establish and maintain an electronic claim inquiry
processing system using the National Council for Prescription Drug
Programs’ current standards to communica te information to pharmacies
submitting claim inquiries ;
2. Fully disclose to insurers, self -funded employers, unions or
other PBM clients the existence of the respective aggregate
prescription drug discounts, rebates received from drug
manufacturers and pharmacy audit recoupments;
3. Provide the Insurance Commissioner, insurers, self -funded
employer plans and unions unrestricted audit rights of and access to
the respective PBM pharmaceutical manufacturer and provider
contracts, plan utilization data, p lan pricing data, pharmacy
utilization data and pharmacy pricing data;
4. Maintain, for no less than three (3) years, documentation of
all network development activities including but not limited to
contract negotiations and any denials to providers to j oin networks.
This documentation shall be made available to the Commissioner upon
request;
5. Report to the Commissioner, on a quarterly basis for each
health insurer payor, on the following information:
a. the aggregate amount of rebates received by t he PBM,
b. the aggregate amount of rebates distributed to the
appropriate health insurer payor,
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c. the aggregate amount of rebates passed on to the
enrollees of each health insurer payor at the point of
sale that reduced the applicable deductible,
copayment, coinsure or other cost sharing amount of
the enrollee,
d. the individual and aggregate amount paid by the health
insurer payor to the PBM for pharmacy services
itemized by pharmacy, drug product and service
provided, and
e. the individual and aggreg ate amount a PBM paid a
provider for pharmacy services itemized by pharmacy,
drug product and service provided .
SECTION 3. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 6966.1 of Title 36, unless t here
is created a duplication in numbering, reads as follows:
A. The Insurance Commissioner may censure, suspend, revoke or
refuse to issue or renew a license of or levy a civil penalty
against any person licensed under the insurance laws of this state
for any violation of the Patient ’s Right to Pharmacy Choice Act,
Section 6958 et seq. of Title 6 of the Oklahoma Statutes.
B. 1. If the Commissioner finds, after notice and opportunity
for hearing, that a pharmacy benefits manager (PBM) violated one or
more provisions of the Patient ’s Right to Pharmacy Choice Act, the
Pharmacy Audit Integrity Act or the provisions of Sections 357
through 360 of Title 59 of the Oklahoma Statues, the PBM may be
censured, his or her license may be suspended or revoked and a
penalty or remedy authorized by this act may be imposed.
2. In addition to or in lieu of any censure, suspension or
revocation of a license, a PBM may be subject to a civil fine of not
less than One Hundred Dollars ($100.00) and not greater than Ten
Thousand Dollars ($10,000.00) for each violation of the provisions
of the Patient’s Right to Pharmacy Choice Act, the Pharmacy Audit
Integrity Act or the provisions of Sections 357 through 360 of Title
59 of the Oklahoma Statues, following notice and an opport unity for
a hearing.
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C. Notwithstanding whether the license of a PBM has been
issued, suspended, revoked, surrendered or lapsed by operation of
law, the Commissioner is hereby authorized to enforce the provisions
of the Patient’s Right to Pharmacy Choice Act and impose any penalty
or remedy authorized under the Act against a PBM under investigation
for or charged with a violation of the Patient ’s Right to Pharmacy
Choice Act, the Pharmacy Audit Integrity Act, the provisions of
Sections 357 through 360 of Title 59 of the Oklahoma Statues or any
provision of the insurance laws of this state.
D. Each day that a PBM conducts business in this state without
a license from the Insurance Department shall be deemed a violation
of the Patient’s Right to Pharmacy C hoice Act.
E. 1. All hearings conducted by the Insurance Department
pursuant to this section shall be public and held in accordance with
the Administrative Procedures Act.
2. Hearings shall be held at the office of the Insurance
Commissioner or any ot her place the Commissioner may deem
convenient.
3. The Commissioner, upon written request from a PBM affected
by the hearing, shall cause a full stenographic record of the
proceedings to be made by a competent court reporter. This record
shall be at the expense of the PBM.
4. The ordinary fees and costs of the hearing examiner
appointed pursuant to Section 319 of Title 36 of the Oklahoma
Statutes may be assessed by the hearing examiner against the
respondent unless the respondent is the prevailing part y.
F. Any PBM whose license has been censured, suspended, revoked
or denied renewal or who has had a fine levied against him or her
shall have the right of appeal from the final order of the Insurance
Commissioner, pursuant to Section 318 et seq. of Titl e 75 of the
Oklahoma Statutes.
G. If the Insurance Commissioner determines, based upon an
investigation of complaints, that a PBM has engaged in violations of
the provisions of the Patient ’s Right to Pharmacy Choice Act with
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such frequency as to indicate a general business practice, and that
the PBM should be subjected to closer supervision with respect to
those practices, the Commissioner may require the PBM to file a
report at any periodic interval the Commissioner deems necessary.
SECTION 4. It being immediately necessary for the preservation
of the public peace, health or safety, an emergency is hereby
declared to exist, by reason whereof this act shall take effect and
be in full force from and after its passage and approv al.
ENR. S. B. NO. 737 Page 10
Passed the Senate the 1st day of March, 2022.
Presiding Officer of the Senate
Passed the House of Representatives the 18th day of April, 2022.
Presiding Officer of the House
of Representatives
OFFICE OF THE GOVERNOR
Received by the Office of the Governor this ____________________
day of _________________ __, 20_______, at _______ o'clock _______ M.
By: _________________________________
Approved by the Governor of the State of Oklahoma this _______ __
day of ___________________, 20_______, at _______ o'c lock _______ M.
_________________________________
Governor of the State of Oklahoma
OFFICE OF THE SECRETARY OF STATE
Received by the Office of the Secretary of State this _______ ___
day of _________________ _, 20 _______, at _______ o'clock _______ M.
By: _________________________________