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SENATE FLOOR VERSION
February 14, 2023
AS AMENDED
SENATE BILL NO. 879 By: Montgomery
[ pharmacy benefits mana gers - compliance review -
contractual provisions - publication -
confidentiality - compliance measures - decisions -
committee members - definitions - licensure -
applications - codification - effective date ]
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 36 O.S. 2021, Section 6960, as
amended by Section 1, Chapter 3 8, O.S.L. 2022 (36 O.S. Supp. 2022,
Section 6960), is amended to read as follows:
Section 6960. For purposes of the P atient’s Right to Pharmacy
Choice Act:
1. “Aggregate retained rebate percentage” means the percentage
of all rebates received by a PBM from all pharmaceutical
manufacturers which is not passed on to the PBM’s health plan or
health insurer clients. The aggregate retained rebate percentage
shall be expressed without disclosing any identifying information
regarding any health plan, prescription drug, or therapeutic class,
and shall be calculated by dividing:
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a. the aggregate dollar amount of all rebates that the
PBM received during the prior calendar year from all
pharmaceutical manufacturers that did not pass through
to the pharmacy benefits manager’s health plan or
health insurer clients, by
b. the aggregate dollar amount of all rebates that the
pharmacy benefits manager received during the prior
calendar year from all pharmaceutical manufacturers;
2. “Defined cost sharing” means a deductible payment or
coinsurance amount imposed on an enrollee for a covered prescription
drug under the enrollee’s health plan;
3. “Formulary” means a list of prescription drugs, any
prescription drug accompanying tiering, and other coverage
information that has been developed by a health insurer or its
designee that is referenced in determining applicable coverage and
benefit levels;
4. “Generic equivalent” means a drug that is designated as
therapeutically equivalent by the United States Food and Dru g
Administration’s Approved Drug Products with Therapeutic Equivalence
Evaluations; provided, however, a drug shall not be considered a
generic equivalent until the drug becomes nationally available;
5. “Health insurer” or “insurer” means any corporation,
association, benefit society, exchange, partnership, or individual,
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or other legal entity licensed by the Oklahoma Insurance Code to
provide health benefit plans;
6. “Health insurer administrative service fees” means fees or
payments from a health insurer or its designee to, or otherwise
retained by, a PBM or its design ee pursuant to a contract between a
PBM or affiliate and the health insurer or its designee in
connection with the PBM’s managing or administering the pharmacy
benefit and administering, invoicing, allocating, and collecting
rebates;
7. “Health benefit plan” means a policy, contract,
certification, or agreement offered or issued by a health insurer to
provide, deliver, arrange for, pay for, or reimburse any of the
costs of health services;
2. 8. “Health insurer payor” means a health insurance company,
health maintenance organization, union, h ospital and medical
services organization or any entity providing or admin istering a
self-funded health benefit plan;
3. 9. “Mail-order pharmacy” means a pharmacy licensed by this
state that primarily dispenses and delivers covere d drugs via by
common carrier;
10. “Pharmaceutical manufacturing administrative fees” means
fees or payments from pharmaceutical manufacturers to, or otherwise
retained by, a pharmacy benefits manager (PBM) or its designee
pursuant to a contract between a PBM or affiliate and the
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manufacturer in connection with the PBM’s administering, invoicing,
allocating, and collecting rebates;
11. “Pharmacy” or “provider” means a pharmacy as defined
pursuant to Section 353.1 of Title 59 of the Oklah oma Statutes;
4. 12. “Pharmacy benefits manager ” or “PBM” means a person
that, either directly or through an intermediary, performs pharmacy
benefits management, as defined by paragraph 6 of Section 357 of
Title 59 of the Oklahoma Statutes, and any other person acting for
such person under a contractual or employm ent relationship in the
performance of pharmacy benefits management for a managed -care
company, nonprofit hospital , medical service organizatio n, insurance
company, third-party payor or a health program administered by a
department of this state;
13. “Price protection rebat e” means a negotiated price
concession that accrues directly o r indirectly to the health insurer
or other party on behalf of the health insurer in the event of an
increase in the wholesale acquisition cost of a dru g above a
specified cost threshold;
5. “Provider” means a pharmacy, as defined i n Section 353.1 of
Title 59 of the Oklahoma Statutes or a n agent or representative of a
pharmacy;
14. “Rebates” means:
a. negotiated price concessi ons including but not limited
to base price concessio ns, whether described as a
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rebate or otherwise, and reasonable estimates of any
price protection rebates and performance-based price
concessions that may accrue directly or indirectly to
the PBM during the coverage year from a manufacturer,
dispensing pharmacy, or other party in connection with
the dispensing or administration of a prescription
drug, and
b. reasonable estimates of any price concessions, fees,
and other administrative costs that are passed
through, or are reasonably anticipated to be passed
through, to the PBM and serve to reduce the PBM’s
liabilities for a prescription drug;
6. 15. “Retail pharmacy network” means retail pharmacy
providers contracted with a PBM in which the pharmacy primari ly
fills and sells prescriptions via from a retail, storefront
location;
7. 16. “Rural service area” means a five-digit ZIP code in
which the population density is less than one thousand (1,00 0)
individuals per square mile;
8. 17. “Spread pricing” means a prescription drug pricing model
utilized by a pharmacy benefits man ager in which the PBM charges a
health benefit plan a contract ed price for prescription drugs t hat
differs from the amount t he PBM directly or indirectly pays the
pharmacy or pharmacist for pr oviding pharmacy services;
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9. 18. “Suburban service area ” means a five-digit ZIP code in
which the population density is betw een one thousand (1,000) and
three thousand (3,000) individual s per square mile; and
10. 19. “Urban service area” means a five-digit ZIP code in
which the population density is greater than thre e thousand (3,000)
individuals per square mile.
SECTION 2. AMENDATORY 36 O.S. 2021, Section 6962, as
amended by Section 2, Chapter 38, O.S.L. 2022 (36 O.S. Supp. 2022,
Section 6962), is amended to read as follows:
Section 6962. A. The Oklahoma Insurance Department shall
review and approve retail pharmacy network access f or all pharmacy
benefits managers (PBMs) to ensure compliance with Section 6961 of
this title.
B. A PBM, or an agent of a PBM, s hall not:
1. Cause or knowingly permit the use of advertisement,
promotion, solicitation, rep resentation, proposal or offer th at is
untrue, deceptive or mi sleading;
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,
b. enrollment or participation in a retail pharmacy
network, or
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c. the development or managemen t of claims processing
services or claims payment services related to
participation in a retail p harmacy network;
3. Reimburse a pharmacy or pharmacist in the state an am ount
less than the amount that the PBM reimburses a phar macy 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 pe r-unit basis
using the same generic product identifier o r generic code number
paid to the PBM-owned or PBM-affiliated pharmacy;
4. Deny a provider the opportunity to participate i n any
pharmacy network at preferred participation status if the provider
is willing to accept the t erms and conditions that the PBM has
established for other providers as a condition of preferred network
participation status;
5. Deny, limit or terminate a provider’s contract based on
employment status of any employee who has an a ctive license to
dispense, despite probation status, wit h 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 sub mitted fraudulently, or
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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;
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
provider from a pharmacy benefits manager network ;
8. Conduct or practice spread pricing , as defined in Section 1
of this act 6960 of this title, in this state; or
9. Charge a pharmacist or pharmacy a fee related to
participation in a retail ph armacy 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 providers for participation
in retail pharmacy networks.
1. A PBM contract shall:
a. not restrict, directly or indirectly, any pharmacy
that dispenses a prescription drug from informing, or
penalize such pharmacy for informing, an indivi dual of
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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 pharmacy that dispenses a
prescription drug from informing, o r penalize such
pharmacy for informing, a covered indi vidual of any
differential between the individual’s out-of-pocket
cost under the plan or cover age with respect to
acquisition of the drug and the amount an individual
would pay for acquisition of the dr ug without using
any health plan or health insurance c overage,
c. not prohibit from or penalize for a pharmacy or
pharmacist disclosing to an individual information
regarding the existence and clinical efficacy of a
generic equivalent that would be less expensive to the
enrollee under his or her health plan p rescription
drug benefit or outside his or her health plan
prescription drug benefit, without requesting any
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health plan reimbursement, than the drug that was
originally prescribed, and
d. not prohibit from or penalize for a pharmacy or
pharmacist selling to an individual, instead of a
particular prescribed drug, a therapeutically
equivalent drug that would be less expensive to the
enrollee under his or her health plan prescription
drug benefit or outside his or her health plan
prescription drug benefit , without requesting any
health plan reimbursement, than the drug that was
originally prescribed.
2. A pharmacy benefits manager’s contract with a provider shall
not prohibit, restrict or limit disclosure of information to the
Insurance Commissioner, law enforc ement 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. For each of the PBM’s contracts or other relationships with
a health plan, a PBM shall publish on an easily accessible website
the health plan formulary and timely notification of formulary
changes and product exclusions.
D. A pharmacy benefits manager shall :
1. Establish and maintain an electronic claim inquiry
processing system using t he National Council for Prescript ion Drug
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Programs’ current standards to communicate information to pharmacies
submitting claim inquiries ;
2. Fully disclose to insurers, self -funded employers, unions or
other PBM clients the existence of the respective ag gregate
prescription drug discoun ts, 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 a nd provider
contracts, plan utilization data, plan pricing data, pharmacy
utilization data and pharmacy pricing data;
4. Maintain, for no less than three (3) years, documentation of
all network development activities inclu ding but not limited to
contract negotiations and any denials to providers to join networks.
This documentation shall be made available to the Commissioner upon
request; and
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 the PBM,
b. the aggregate amount of rebates distributed to the
appropriate health insurer payor,
c. the aggregate amount of rebates passed on to the
enrollees of each health in surer payor at the point of
sale that reduced the applicable deductible,
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copayment, coinsure or other cost sharing amount of
the enrollee,
d. the individual and aggregate amount paid by t he health
insurer payor to the PBM for pharmacy services
itemized by pharmacy, drug product and servic e
provided, and
e. the individual and aggregate amount a PBM paid a
provider for pharmacy services itemized by pharmacy,
drug product and service provide d.
SECTION 3. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 6962.1 of Title 36, unless there
is created a duplication in numbering, reads as follows:
A. Beginning on November 1, 2023, and on an annual basis
thereafter, a pharmacy benefits manager (PBM) shall provide the
Insurance Department with a report containing the following
information from the prior calendar year as it pertains to pharmacy
benefits provided by health insurers to enrollees in the stat e:
1. The aggregate dollar amount of all rebates that the PBM
received from all pharmace utical manufacturers;
2. The aggregate dollar amount of all administrative fees that
the PBM received;
3. The aggregate dollar amount of all issuer administrative
service fees that the PBM received;
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4. The aggregate dollar amount of all rebates that the PBM
received from all pharmaceutical manufacturers and did not pass
through to health plans or health insurers;
5. The aggregate dollar amount of all administrative fees that
the PBM received from all pharmaceutical manufacturers and did not
pass through to health plans or health insurers;
6. The aggregate retained rebate percentage; and
7. The highest aggregate retained rebate perc entage, the lowest
aggregate retained rebate percentage, and the mean aggregate
retained rebate percentage across all of the pharmacy benefits
manager’s contractual or other relationships with all hea lth benefit
plans or health insurers .
B. The Department shall publi sh in a timely manner the
information that it receives under subsection A of this section on a
publicly available website, provided that such information shall be
made available in a form that does not disclose the identity of a
specific health plan or the identity of a specific manufacturer, the
prices charged for specific drugs or classe s of drugs, or the amount
of any rebates provided for specific drugs or classes of drugs.
C. The PBM and the Department shall not publish or otherwise
disclose any information that would disclose the identity of a
specific health plan, any prices charged for a specific drug or
class of drugs, the amount of any rebates provided for a specific
drug or class of drugs, the manufacturer, or information that would
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otherwise have the potential to compromise the financ ial,
competitive, or proprietary nature of the information. The
information shall be protected from direct or indirect disclosure as
confidential and proprietary information and shall not be deemed a
public record as defined pursuant to Section 24A.3 of Title 51 of
the Oklahoma Statutes. A PBM shall impose the confident iality
protections of this section on any vendor or downstream third party
that performs health care or administrative services o n behalf of
the PBM that may receive or have access to rebate information.
SECTION 4. NEW LAW A new sec tion of law to be codified
in the Oklahoma Statutes as Section 6962.2 of Title 36, unless there
is created a duplication in numbering, reads as follows:
A. An enrollee’s defined cost sharing , as defined pursuant to
Section 6960 of Title 36 of the Oklahoma Statutes , for each
prescription drug shall be calculated at the point of sale based on
a price that is reduced by an amount equal to one hundred percent
(100%) of all rebates received, or to b e received, in connect ion
with the dispensing or administration of the prescription drug.
B. For any violation of this section, the Insurance
Commissioner may subject a pharmacy benefits manager (PBM) to an
administrative penalty not less than One Hundred Dollars ($100.00),
nor more than Five Thousand Dollars ($5,000.00) for each occurrence.
Such administrative penalty may be enforced in the same manner in
which civil judgments may be enforced.
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C. Nothing in this section shall preclude a PBM from decreasing
an enrollee’s defined cost sharing by an amount greater than that
required under subsection A of this section.
D. In complying with the pr ovisions of this section, a PBM or
its agents shall not publish or otherwi se disclose information
regarding the actual amount of rebate s a PBM receives on a product
or therapeutic class of products, manufacturer, or pharmacy-specific
basis. Such information is protected as a trade secret, is not a
public record as defined pursuant to Section 24A.3 of Title 51 of
the Oklahoma Statutes, and shall not be disclosed directly or
indirectly, or in a manner that would allow for the identification
of an individual product, therapeutic class of products, or
manufacturer, or in a manner that would have the potential to
compromise the financial, competitive, or proprietary nature of the
information. A PBM shall impose the confidentiality protections of
this section on any vendor or downstream third party that performs
health care or administrative services on behalf of the insur er that
may receive or have access to rebate information.
SECTION 5. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 6962.3 of Title 36, unless there
is created a duplication in numb ering, reads as follows:
A. An enrollee’s defined cost sharing, as defined pursuant to
Section 6960 of Title 36 of the Oklahoma Statutes, for each
prescription drug shall be calculated at the point of sale based on
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a price that is reduced by an amount equal to one hundred percent
(100%) of all rebates received or to be received in connection with
the dispensing or administration of the prescription drug.
B. For any violation of this section, the Insurance
Commissioner may subject an insurer to an administrative penalty not
less than One Hundred Dollars ($100.00), nor more than Five Thousand
Dollars ($5,000.00) for each occurrence. Such administrative
penalty may be enforced in the same manner in which civil judgments
may be enforced.
C. Nothing in this section shall preclude an insurer from
decreasing an enroll ee’s defined cost sharing by an a mount greater
than that required under subsection A of this section.
D. An insurer or its agents shall not publish or otherwise
disclose information regarding the act ual amount of rebates an
insurer receives on a product o r therapeutic class of produc ts,
manufacturer, or pharmacy-specific basis. Such information is
protected as a trade secret, is not a public record pursuant to
Section 24A.3 of Title 51 of the Oklahom a Statutes, and shall not be
disclosed directly or indir ectly or in a manner that woul d allow for
the identification of an individual product, therapeutic class o f
products, or manufacturer, or in a manner that would have the
potential to compromise the fi nancial, competitive, or proprietary
nature of the information. The confidentiality pr otections provided
in this section shall apply to any vendor or downstream third party
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that performs healthcare or administrative services on behalf of the
insurer that may receive or have access to rebate information.
SECTION 6. AMENDATORY 36 O.S. 2021, Section 6964, is
amended to read as follows:
Section 6964. A. A health insurer’s pharmacy and therapeutics
committee (P&T committee) of a health insurer or its agent,
including pharmacy benefits man agers (PBMs), shall establish a
formulary, which shall be a list of prescriptio n drugs, both generic
and brand name, used by practitioners to identify drugs that offer
the greatest overall value. The P&T committee shall review the
formulary annually.
B. A health insurer shall prohibit c onflicts of interest for
members of the P&T com mittee. The P&T committee shall meet the
following requirements:
1. A person may not serve on a P&T committee if the person is
currently employed or was employe d within the preceding year by a
pharmaceutical manufacturer, developer, labeler, wholesaler or
distributor.;
2. A majority of P&T committee members shall be practicing
physicians, practicing pharmacists, or both, and shall be licensed
in this state;
3. A health insurer shall require any member of th e P&T
committee to disclose any compensation or funding from a
pharmaceutical manufacturer, developer, labeler, wholesaler or
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distributor. Such P&T committee member shall be recuse d from voting
on any product manufactured or sold by such pharmaceutical
manufacturer, developer, labeler, wholesaler or di stributor.;
4. P&T committee members shall practice in various clinical
specialties that adequately represent the needs of the health plan
enrollees and there shall be an adequate number, to be determined by
the Insurance Department, of high-volume specialists and specialists
treating rare or orphan diseases;
5. The P&T committee shall meet at least on a quarterly basis;
6. P&T committee formulary development shall be conducted
pursuant to a transparent process, and formulary decisions and
rationale shall be documented in writing. Upon request, the records
and documents shall be made available to the health plan, subject to
the conditions in subsection C of this section;
7. If the P&T committee relies upon any third party to provide
cost-effectiveness analysis or research for a Medicaid managed care
organization’s prescription drug policy , the P&T committee shall:
a. disclose to the health benefit plan, the President Pro
Tempore of the Senate, the Speaker of the House of
Representatives, and the Governor, the name of a
relevant third party, and
b. provide a process through which patients and providers
potentially impacted by the third party’s analysis or
research may provide input to the P&T committee;
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8. P&T committee members who are specialists with current
clinical expertise and actively treat patients in a specific
therapeutic area, and the specific conditions within a therapeutic
area, shall participate in formulary decisions regarding each
therapeutic area and specific condition;
9. The P&T committee shall base its clinical decisions on the
strength of scientific evidence, standards of practice, and
nationally accepted treatment guidelines;
10. The P&T committee shall consider whether a particular drug
has a clinically meaningful therapeutic advantage over other drugs
in terms of safety, effectiveness, or clinical outcome for patient
populations who may be treated with the drug;
11. The P&T committee shall evaluate and analyze treatment
protocols and procedures related to the health plan’s formulary at
least annually;
12. The P&T committee shall review formulary management
activities including exceptions and appeals processes, prior
authorization, step therapy, quantity limits, generic substitutions,
therapeutic interchange, and other drug utilization management
activities for clinical appropriateness and consistency with
industry standards and patient and provider organization guidelines;
13. The P&T committee shall annually review and provide a
written report to the pharmacy benefits manager on:
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a. the percentage of prescription drugs on a formulary
subject to each of the types of utilization management
described in paragraph 12 of this subsection,
b. rates of adherence and nonadherence to medicines by
therapeutic area,
c. rates of abandonment of medicines by therapeutic area,
d. recommendations for improved adherence and reduced
abandonment, and
e. recommendations for improvement in formulary
management practices consistent with patient and
provider organization and other clinical guidelines,
provided that the report shall be subject to the
conditions in subsection C of this section; and
14. The P&T committee shall review and make a formulary
decision on a new United States Food and Drug Administration-
approved drug within ninety (90) days of the drug’s approval, or
shall provide a clinical justification if this timeframe is not met.
C. The health insurer, its agents including pharmacy benefits
managers, and the Department shall not publish or otherwise disclose
any confidential, proprietary information including but not limited
to any information that would disclose the identity of a specific
health plan, the price or prices charged for a specific drug or
class of drugs, the amount of any rebates provided for a specific
drug or class of drugs, the manufacturer, or that would otherwise
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have the potential to compromise the financial, competitive, or
proprietary nature of the information. The information shall be
protected from direct or indirect disclosure as confidential and
proprietary information and shall not be deemed a public record as
defined pursuant to Section 24A .3 of Title 51 of the Oklahoma
Statutes. The confidentiality protections provided in this section
shall apply to any vendor or third party that performs health care
or administrative services on behalf of the pharmacy ben efits
manager that may receive or have access to rebate information.
SECTION 7. AMENDATORY 51 O.S. 2021, Section 24A.3, as
last amended by Section 1, Chapter 402, O.S.L. 2022 (51 O.S. Supp.
2022, Section 24A.3), is amended to r ead as follows:
Section 24A.3. As used in the Oklahoma Open Records Act:
1. “Record” means all documents including, but not limited to,
any book, paper, phot ograph, microfilm, data files created by or
used with computer softw are, computer tape, disk, record , sound
recording, film recording, video record or other material regardless
of physical form or characteristic, created by, received by, under
the authority of, or coming into the custody, control or possession
of public officials, public bodies or their representatives in
connection with the transaction of public bus iness, the expenditure
of public funds or the administering of public property. “Record”
does not mean:
a. computer software,
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b. nongovernment personal effects ,
c. unless public disclosure is required by other laws or
regulations, vehicle movement records of the Oklahoma
Transportation Authority obtained in connection with
the Authority’s electronic toll collection system,
d. personal financial information, cred it reports or
other financial data obtained by or submitted to a
public body for the purpose of evaluating credit
worthiness, obtaining a license, permit or for the
purpose of becoming qua lified to contract with a
public body,
e. any digital audio/video re cordings of the toll
collection and safeguarding activities of the Oklahoma
Transportation Authority,
f. any personal information provided by a guest at any
facility owned or operated by the Oklahoma Tourism and
Recreation Department to obtain any service at the
facility or by a purchaser of a product sold by or
through the Oklahoma Tourism and Recreation
Department,
g. a Department of Defense Form 214 (DD Form 214) filed
with a county clerk including any DD Form 214 filed
before July 1, 2002,
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h. except as provided for in Section 2 -110 of Title 47 of
the Oklahoma Statutes,
(1) any record in connection with a Motor Vehicle
Report issued by the Department of Public Safety,
as prescribed in Sec tion 6-117 of Title 47 of the
Oklahoma Statutes, or
(2) personal information within driver records, as
defined by the Driver’s Privacy Protection Act,
18 United States Code, Sections 2721 thro ugh
2725, which are stored and maintained by the
Department of Public Safety, or
i. any portion of any document or information provided to
an agency or entity of th e state or a political
subdivision to obtain licensure under the laws of this
state or a political subdivision that contain s an
applicant’s personal address, personal phone number,
personal electronic mail address or other c ontact
information. Provided, h owever, lists of persons
licensed, the existence of a license of a person, or a
business or commercial address, or other bu siness or
commercial information disclosable under state law
submitted with an application for licens ure shall be
public record, or
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j. for the purposes of the Patient’s Right to Pharmacy
Choice Act, any information or record that would have
the potential to compr omise the financial,
competitive, or proprietary nature of information
about a specific drug or class of drugs, or a specific
product or therapeutic class of products. Additional
information that shall not be disclosed includes but
is not limited to:
(1) any information relating to specific drugs or
classes of drugs that would disclose the identity
of a specific health plan, dru g prices, the
rebate amount received by a pharmacy benefits
manager, the rebate amount received by the
insurer, or the identity of the manufacturer, and
(2) any information relating to a product or
therapeutic class of products that would disclose
the rebate received by a pharmacy benefits
manager, the rebate amount received by an
insurer, or the identity of the manufacturer;
2. “Public body” shall include, but not be limited to, any
office, department, board, bureau, commissio n, agency, trusteesh ip,
authority, council, committee, trust or any entity cr eated by a
trust, county, city, village, town, township, district, school
district, fair board, court, executive office, advisory group, task
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force, study group or any subdivision thereof, supported in whole or
in part by public funds or entrusted with th e expenditure of public
funds or administering or operating public property, and all
committees, or subcommittees thereof. Except for the records
required by Section 24A.4 of this title, “public body” does not mean
judges, justices, the Council on Judicia l Complaints, the
Legislature or legislators. “Public body” shall not include an
organization that is exempt from federal income tax under Section
501(c)(3) of the Internal Revenu e Code of 1986, as amended, and
whose sole beneficiary is a college or university, or an affiliated
entity of the college or university, that is a member of The
Oklahoma State System of Higher Education. Such organization shall
not receive direct appropri ations from the Oklahoma Legislature.
The following persons shall not b e eligible to serve as a voting
member of the governing board of the organization:
a. a member, officer, or employee of the Oklahoma State
Regents for Higher Education,
b. a member of the board of regents or other governing
board of the college or university th at is the sole
beneficiary of the organization, or
c. an officer or employee of the college or university
that is the sole beneficiary of the organization;
3. “Public office” means the physical location where public
bodies conduct business or keep record s;
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4. “Public official” means any official or employee of any
public body as defined herein; and
5. “Law enforcement agency” means any public body charged with
enforcing state or local criminal laws and initiating criminal
prosecutions including, but not limited to, police departments,
county sheriffs, the Department of Public Safety, the Oklahoma State
Bureau of Narcotics and Dangerous Drugs Control, the Alcoholic
Beverage Laws Enforcement Commission, and the Oklahoma State Bureau
of Investigation.
SECTION 8. AMENDATORY 5 9 O.S. 2021, Section 357, is
amended to read as follows:
Section 357. As used in this act the Oklahoma Pharmacy Act:
1. “Covered entity” means a nonprofit hospi tal or medical
service organization, insurer, health coverage plan or health
maintenance organization; a health program administered by the state
in the capacity of pro vider of health coverage; or an employer,
labor union, or other entity organized in the state that provides
health coverage to covered individuals who are employed or reside in
the state. This term does not include a health plan that provides
coverage only for accidental injury, specified disease, hospi tal
indemnity, disability income, or ot her limited benefit health
insurance policies and contracts that do not include prescription
drug coverage;
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2. “Covered individual” means a member, participant, enroll ee,
contract holder or policy holder or beneficia ry of a covered entity
who is provided health coverage by the covere d entity. A covered
individual includes any dependent or other p erson provided health
coverage through a policy, contract or plan for a co vered
individual;
3. “Department” means the Oklahoma Insurance Department;
4. “Maximum allowable cost” or “MAC” means the list of drug
products delineating the maximum per -unit reimbursement for
multiple-source prescription drugs, medical product or devi ce;
5. “Multisource drug product reimbursement ” (reimbursement)
means the total amount paid to a pharmacy inclusive of any reduction
in payment to the pharmacy, excluding prescripti on dispense fees;
6. “Pharmacy benefits management ” means a service provi ded to
covered entities to facilitate the provisi on of prescription drug
benefits to covered individuals within the s tate, including
negotiating pricing and other terms with drug man ufacturers and
providers. Pharmacy benefits management may include any or all of
the following services:
a. claims processing, performance of drug utilization
review, processing of prior authorization requests,
retail network management and payment of cla ims to
pharmacies for prescription drugs dispensed to covered
individuals,
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b. clinical formulary development and management
services,
c. rebate contracting an d administration,
d. certain patient compliance, therapeutic intervention
and generic substitution programs, or
e. disease management programs ,
f. adjudication of appeals or grievanc es related to the
prescription drug ben efit, and
g. oversight of prescriptio n drug costs;
7. “Pharmacy benefits manager” or “PBM” means a person,
business or other entity that, either directly or through an
intermediary, performs pharmacy benefit s management. The term
includes a person or ent ity acting for a PBM in a contractual or
employment relationship in the performance of pharmacy benefits
management for a managed car e company, nonprofit hospital, medical
service organization, insurance comp any, third-party payor, or a
health program administered by an agency of this state;
8. “Plan sponsor” means the employers, insurance companies,
unions and health maintenance organ izations or any other entity
responsible for establishing, maintaining, or administering a health
benefit plan on behalf of covered individuals; and
9. “Provider” means a pharmacy licensed b y the State Board of
Pharmacy, or an agent or representative of a pharmacy, including,
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but not limited to, the pharmacy’s contracting agent, which
dispenses prescription drugs or devices t o covered individuals.
SECTION 9. AMENDATORY 59 O.S. 2021, Section 358, is
amended to read as follows:
Section 358. A. In order to provide pharmacy benefits
management or any of the service s included under the definition of
pharmacy benefits management in this stat e, a pharmacy benefits
manager or any entity acting as one in a contractual or employment
relationship for a covered entity shall first obtain a license from
the Oklahoma Insurance Department, and the Department may charge a
fee for such licensure.
B. The Department shall establish, by regulation, licensure
procedures, required disclosures for pharm acy benefits managers
(PBMs) and other rules as may be necessary for carrying out an d
enforcing the provisions of this act the Oklahoma Pharmacy Act. The
licensure procedures shall, at a minimum, include the completion of
an application form that shall in clude the name and address of an
agent for service of process, the payment of a requ isite fee, and
evidence of the procurement of a suret y bond:
1. The name, address, and telephone contact number of the PBM ;
2. The name and address of the PBM’s agent for service of
process in the state;
3. The name and address of each person with management or
control over the PBM;
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4. Evidence of the procurement of a surety bond;
5. The name and address of each person with a ben eficial
ownership interest in the PBM;
6. In the case of a PBM applicant that is a partnership or
other unincorporated association, limited liability company, or
corporation, and has five or more partners, members, or
stockholders, the applicant shall:
a. specify its legal structure and the total number of
its partners, members, or stockholders,
b. specify the name, address, usual occupation, and
professional qualifications of the five partners,
members, or stockholders with the five largest
ownership interests in the PBM, and
c. upon request by the Department, furnish the Department
with information regardi ng the name, address, usual
occupation, and professional qualifications of any
other partners, members, or stockholders; and
7. A signed statement in dicating that the PBM has not been
convicted of a felony and has not violated any of the requirements
of the Oklahoma Pharmacy Act and the Patient’s Right to Pharmacy
Choice Act, or, if the applicant cannot provide such a statement, a
signed statement descr ibing any relevant conviction or violation.
C. The Department may subpoena witnesses and informa tion. Its
compliance officers may take and copy records for investigative use
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and prosecutions. Nothing in this subsection shall limit the Office
of the Attorney General from using its investi gative demand
authority to investigate and prosecute violation s of the law.
D. The Department may suspend, revoke or refuse to issue or
renew a license for noncompliance with any of the provis ions hereby
established or with the rules promulgated by the D epartment; for
conduct likely to mislead, deceive or defraud th e public or the
Department; for unfair or deceptive business practices or for
nonpayment of a renewal fee or fine. The Department may also levy
administrative fines for each count of which a PBM has been
convicted in a Department hearing.
SECTION 10. This act shall be come effective November 1, 2023.
COMMITTEE REPORT BY: COMMITTEE ON RETIREMENT AND INSURANCE
February 14, 2023 - DO PASS AS AMENDED