Req. No. 5318 Page 1 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
STATE OF OKLAHOMA
1st Session of the 59th Legislature (2023)
HOUSE BILL 2853 By: Wallace
AS INTRODUCED
An Act relating to health care; creating the Oklahoma
Rebate Pass-Through and PBM Meaningful Transparency
Act of 2023; amending 59 O.S. 2021, Sections 357 and
358, which relate to definitions; modifying
definitions, procedures, and penalties; creating
duties; creating licensing application requirements;
amending 36 O.S. 2021, Section 6960, as amended by
Section 1, Chapter 38, O.S.L. 2022 ( 36 O.S. Supp.
2022, Section 6960), which relates to definitions;
defining terms; creating PBM disclosures; amending 36
O.S. 2021, Section 69 62, as amended by Section 2,
Chapter 38, O.S.L. 2022 (36 O.S. Supp. 2022, Section
6962), which relates to pharmacy b enefits manager
compliance; creating duties; amending 36 O.S. 2021,
Section 6964, which relates to a form ulary for
prescription drugs; creating agency duties; providing
cost sharing calculation methodology, limitations,
and requirements; creating penalties; clarifying
authority to take certain actions; prohibiting the
disclosure of certain information; declaring that
certain information not be considere d public record;
providing for noncodification; providing for
codification; and providing an effecti ve date.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. NEW LAW A new section of law not to be
codified in the Oklahoma Statutes reads as follows:
Req. No. 5318 Page 2 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
This act shall be known and may be cited as the "Oklahoma Rebate
Pass-Through and PBM Meaningful Transparency Act of 2023".
SECTION 2. AMENDATORY 59 O.S. 2021, Section 357, is
amended to read as follows:
Section 357. As used in this act:
1. "Covered entity" means a nonprofit hospital or m edical
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 th at 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, hospital
indemnity, disability income, or other limi ted benefit health
insurance policies and contracts that do not include prescription
drug coverage;
2. "Covered individual" means a member, participant, enroll ee,
contract holder or policy holder or beneficiary of a covered entity
who is provided health c overage by the covered entit y. A covered
individual includes any dependent or other person provided health
coverage through a policy, contract or plan for a co vered
individual;
3. "Department" means the Oklahoma Insurance Department;
Req. No. 5318 Page 3 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
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 prescription dispense fees;
6. "Pharmacy benefits management " means a service provi ded to
covered entities to facilitate the provision of prescription drug
benefits to covered ind ividuals within the state, i ncluding
negotiating pricing and other terms with drug manufacturers and
providers. Pharmacy benefits management may include any or all of
the following services:
a. claims processing, performance of drug utilization
review, processing of drug prior autho rization
requests, retail network management and payment of
claims to pharmacies for prescription drugs dispensed
to covered individuals,
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 ,
Req. No. 5318 Page 4 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
f. adjudication of appeals and grievances related to the
prescription drug benefit , or
g. controlling the cost of presc ription drugs;
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 entity acting for a PBM in a contractua l or
employment relationship in the performance of pharmacy benefits
management for a managed care 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 organizations 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 licens ed by the State Board of
Pharmacy, or an agent or representative of a pharmacy, including,
but not limited to, the pharmacy 's contracting agent, which
dispenses prescription drugs or devices to covered individuals.
SECTION 3. 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 services included under the definit ion of
pharmacy benefits management in this sta te, a pharmacy benefits
Req. No. 5318 Page 5 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
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 Departm ent may charge a
fee for such licensure.
B. The Department shall establish, by regulation, licensure
procedures, required disclosures for pharmacy benefits managers
(PBMs) and other rules as may be necessary for carrying out and
enforcing the provisions of this act. The licensure procedures
shall, at a minimum, include the completion of an application form
that shall include the name and address of an agent for service of
process, the payment of a requisite fee, and evidence of the
procurement of a suret y bond the following:
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 wit h management or
control over the PBM;
4. Evidence of the procurement of a surety bon d;
5. The name and address of each person with a beneficial
ownership interest in the PBMs;
6. In the case of a PBM applicant that is a partnership or
other unincorporated association, limited liability corporation , or
corporation, and has five or more partners, members, or
stockholders:
Req. No. 5318 Page 6 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
a. the applicant shall specify its legal structure and
the total number of partners, members, or
stockholders,
b. the applicant shall 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. the applicant shall agree that, upon request by the
Department, it shall furnish the Department with
information regarding the name, address, usual
occupation, and professional qualifications of any
other partners, members, or stockholders; and
7. A signed statement indicating that the PBM has not been
convicted of a felony and has not violated any of the requireme nts
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 describing all relevant convictions or violations.
C. The Department may subpoena witnesses and informa tion. Its
compliance officers may take and copy reco rds for investigative use
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 wit h any of the provisions hereby
Req. No. 5318 Page 7 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
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 b usiness practices or for
nonpayment of a renewal fee or fin e. The Department may also levy
administrative fines for each count of which a PBM has been
convicted in a Department hearing.
SECTION 4. AMENDATORY 36 O.S. 2021, Section 6960, as
amended by Section 1, Chapter 38, O.S.L. 2022 (36 O.S. Supp. 2022,
Section 6960), is amended to read as follows:
Section 6960. For purposes of the Patient 's Right to Pharmacy
Choice Act:
1. "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 manufacturer in
connection with the PBM's administering, invoicing, alloc ating, and
collecting the rebates;
2. "Aggregate retained rebate percentage" means the percentage
of all rebates received by a PBM from all pharmaceutical
manufacturers which is not passed on t o the PBM's health plan or
health insurer clients. Aggregate retained rebate percentage shall
be expressed without disclosing any identifying information
regarding any health pl an, prescription drug, or the rapeutic class,
and shall be calculated by dividi ng:
Req. No. 5318 Page 8 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
a. the aggregate dollar amount of all rebates that the
PBM received during t he prior calendar year from al l
pharmaceutical manufacturers and did not pass through
to the PBM's health plan or health in surer clients, by
b. the aggregate dollar amount of all rebates that the
pharmacy benefits manager received duri ng the prior
calendar year from all pharmaceutical manufacturers;
3. "Defined cost sharing" means a deductible payment or
coinsurance amount impo sed on an enrollee for a cover ed prescription
drug under the enrollee's health plan;
4. "Formulary" means a list of prescription dru gs, as well as
accompanying tiering and other coverage information, that has been
developed by an issuer, a health plan, or t he designee of a health
insurer or health plan, which the health insurer, health plan, or
designee of the health insurer or health plan references in
determining applicable coverage and benefit levels;
5. "Generic equivalent" means a drug that is designate d to be
therapeutically equivalent, as indicated by the United States Food
and Drug Administration's "Approved Drug Products with Therapeutic
Equivalence Evaluations"; provided, however, that a drug sh all not
be considered a generic equivalent until the drug becomes nationally
available;
Req. No. 5318 Page 9 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
6. "Health insurer" means any corporation, association, benefit
society, exchange, partnership o r individual licensed by the
Oklahoma Insurance Code;
7. "Health insurer administrative service fees" means fees or
payments from a health insurer or a designee of the health insurer
to, or otherwise retained by, a PBM or its designee pursuant to a
contract between a PBM or affiliate, and the health insurer or
designee of the health insurer in conne ction with the PBM managing
or administering the pharmacy benefit and administering, invoicing,
allocating, and collecting rebates;
2. 8. "Health insurer payor" means a health insurance co mpany,
health maintenance organization, union, hospital and medical
services organization or any entity providing or admin istering a
self-funded health benefit plan;
9. "Health plan" means a policy, contract, certification, or
agreement offered or issued by a health insurer to provide, de liver,
arrange for, pay for , or reimburse any of the costs of health
services;
3. 10. "Mail-order pharmacy" means a pharmacy licensed by this
state that primarily dispenses and delivers covered drugs via common
carrier;
4. 11. "Pharmacy benefits manager " or "PBM" means a person
that, either directly or t hrough an intermediary, performs pharmacy
benefits management, as defined in paragraph 6 of Section 357 of
Req. No. 5318 Page 10 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
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 organization, insurance
company, third-party payor or a health program administered by a
department of this state;
12. "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;
13. "Price protection rebate" means a negotiated price
concession that accrues directly or indirectly to the health
insurer, or other party on behalf of the health insurer, in the
event of an increase in the wholesale acquisition of a drug above a
specified threshold
5. 14. "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;
15. "Rebates" means:
a. negotiated price concessions including, but not
limited to, base price concessions (whether described
as a rebate or otherwise) and reasonable estima tes of
any price protection rebates and performance -based
price concessions that may accrue d irectly or
indirectly to the PBM dur ing the coverage year from a
Req. No. 5318 Page 11 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
manufacturer, dispensing pharmacy, or other party in
connection with the dispensing or administrat ion of a
prescription drug, and
b. reasonable estimates of any price concessions, fees ,
and other administrative costs that are p assed
through, or are reasonably anticipated to be passed
through, to the PBM and serve to reduce the PBM's
liabilities for a pr escription drug;
6. 16. "Retail pharmacy network " means retail pharmacy
providers contracted with a PBM in which the pharmacy primari ly
fills and sells prescriptions via a retai l, storefront location;
7. 17. "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;
8. 18 "Spread pricing" means a prescription 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 directl y or indirectly pays the
pharmacy or pharmacist for pr oviding pharmacy services;
9. 19. "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
Req. No. 5318 Page 12 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
10. 20. "Urban service area" means a five-digit ZIP code in
which the population density is greater than three thous and (3,000)
individuals per square mile.
SECTION 5. 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, r eads as follows:
A. Beginning on January 1, 2022, and on an annual basi s
thereafter, a pharmacy benefit s manager (PBM) shall provide the
Insurance Department with a report containing the following
information from the prior calendar year as it pertai ns to pharmacy
benefits provided by health insurers to enrollees in the state:
1. The aggregate dollar amount of all rebates that the PBM
received from all phar maceutical manufacturers;
2. The aggregate dollar amount of al l administrative fees that
the PBM received;
3. The aggregate dollar amount of all issuer administrative
service fees that the PBM received;
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
Req. No. 5318 Page 13 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
7. Across all of the PBM's contractual or other relationships
with all health plans or health insurers, the high est aggregate
retained rebate percentage, the lowest aggregate retained rebate
percentage, and the mean aggregate retained rebate perc entage.
B. The Department shall publish 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 class es 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 reveal the identity of a
specific health plan, the price(s) 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 otherw ise
have the potential to compromise the financial, competitive, or
proprietary nature of the informatio n. Any such information shall
be protected from disclosure as confidential and proprietary
information, is not a public record as defined in the Oklahoma Open
Records Act, Section 24A.1 et seq. of Title 51 of the Oklahoma
Statutes, and shall not be disclo sed directly or indirectly. A PBM
shall impose the confidential ity protections of this section on any
vendor or downstream third pa rty that performs he alth care or
Req. No. 5318 Page 14 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
administrative services on behalf of the PBM and that may receive or
have access to rebate information.
SECTION 6. 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 am ended to read as follows:
Section 6962. A. The Oklahoma Insurance Department shall
review and approve retail pharmacy network access for all pharmacy
benefits managers (PBMs) to ensure compliance with Section 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 t he
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
c. the development or management of claims processing
services or claims payment services relat ed 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
Req. No. 5318 Page 15 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
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 provider the opportunity to participate in any
pharmacy network at preferred participation status if the provider
is willing to accept the terms 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 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 returning 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 Sec tions
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 ;
Req. No. 5318 Page 16 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
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 ; or
10. Contractually prohibit or penalize a pharm acy or pharmacist
for:
a. disclosing to an individual information rega rding the
existence and clinical efficacy of a generic
equivalent that would be less expensive to the
enrollee,
(1) under his or her health pla n prescription drug
benefit, or
(2) outside his or her health plan prescription drug
benefit, without requesting any health plan
reimbursement,
than the drug that was orig inally prescribed, or
Req. No. 5318 Page 17 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
b. selling to an individual, instead of a particular
prescribed drug, a therapeutically equivalent drug
that would be less expensive to the enrollee,
(1) under his or her hea lth plan prescription drug
benefit, or
(2) outside his or her health plan prescription drug
benefit, without requesting any health plan
reimbursement,
than the drug that was originally pre scribed.
C. The prohibitions under this section 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
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 t o
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,
Req. No. 5318 Page 18 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
directly or indirectly, a pharmacy that dispenses a
prescription drug from informing, o r 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 the amount an individual
would pay for acquisition of the dr ug without using
any health plan or health insurance coverage.
2. A pharmacy benefits manager 's contract with a 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.
D. A pharmacy benefits manager shall :
1. Establish and maintain an electroni c 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;
Req. No. 5318 Page 19 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
3. Provide the Insurance Commissioner, insurers, self-funded
employer plans and unions unrestricted audi t 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 quarter ly 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,
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 t he health
insurer payor to the P BM for pharmacy services
itemized by pharmacy, drug product and service
provided, and
Req. No. 5318 Page 20 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
e. the individual and aggreg ate amount a PBM paid a
provider for pharmacy s ervices itemized by pharmacy,
drug product and service provide d.
E. For each of the PBM's contracts or other relationships with
a health plan, a PBM shall publish on an easily a ccessible website
the health plan formula ry, and timely notification of formul ary
changes and/or product exclusions.
SECTION 7. AMENDATORY 36 O.S. 2021, Section 6964, is
amended to read as follows:
Section 6964. A. A health insurer's insurer or its agent's,
including pharmacy benefits managers, pharmacy and therapeutics
committee (P&T committee) shall establish a formulary, which shall
be a list of prescription drugs, both generic and brand name, used
by practitioners to identify drugs that offer the greatest overall
value.
B. A health insurer shall prohi bit conflicts of interest f or
members of the P&T committee. The P&T committee shall review the
formulary annually and must meet the foll owing 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, wholesa ler or
distributor. A majority of P&T committee members must be practicing
physicians, practicing pharmacists, or both, and must be licensed in
Oklahoma;
Req. No. 5318 Page 21 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
2. A health insurer shall require any membe r of the P&T
committee to disclose any compensation or fun ding from a
pharmaceutical manufacturer, deve loper, labeler, wholesaler or
distributor. Such P&T committee member shall be recused from voting
on any product manufactured or sold by such pharmaceut ical
manufacturer, developer, labeler, wholesaler or distr ibutor. P&T
committee members must practice in various clinical specialties that
adequately represent the needs of health plan enrollees, and there
must be an adequate nu mber of high-volume specialists and
specialists treating rare and orphan diseases;
3. The P&T committee must meet no less frequently than on a
quarterly basis;
4. P&T committee formulary development must be conducted
pursuant to a transparent process, an d formulary decisions and
rationale must be documented in writing, with any records and
documents relating to the process ava ilable upon request to the
health plan, subject to the c onditions in subsection C of this
section. In the case of P&T committee decisions that relate to
Medicaid managed care organizations' prescription drug coverage
policies, if the P&T committee relies upon any thi rd party to
provide cost-effectiveness analysis or research, the P&T committee
must:
Req. No. 5318 Page 22 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
a. disclose to the health benefit plan, the state, and
the general public the name of the relevant third
party, and
b. provide a process through which patients and provi ders
potentially impacted by the third -party's analysis or
research may provide input to the P&T committee;
5. Specialists with current clinical ex pertise who actively
treat patients in a specifi c therapeutic area, and the specific
conditions within a the rapeutic area, must participate in formular y
decisions regarding each therapeutic area an d specific condition;
6. The P&T committee must base its c linical decisions on the
strength of scientific evidence, standards of practice, and
nationally accepted tre atment guidelines;
7. The P&T committee mu st consider whether a particular drug
has a clinically meaningful therapeutic advantage over other drugs
in terms of safety, effectiveness, or clinical o utcome for patient
populations who may be treated with the d rug;
8. The P&T committee must evaluate an d analyze treatment
protocols and procedures related to the health plan's formulary at
least annually;
9. The P&T committee must review formulary manage ment
activities, including exceptions and appeals processes, prior
authorization, step therapy, quantit y limits, generic subs titutions,
therapeutic interchange, a nd other drug utilization management
Req. No. 5318 Page 23 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
activities for clinical appropriateness and consistency with
industry standards and patient and provider organization guidelines;
10. The P&T committee must annually review and provide a
written report to the pharmacy benefits manager on:
a. the percentage of pr escription drugs on formulary
subject to each of the types of utilization management
described in paragraph 9 of this subsection,
b. rates of adherence and nonadherence to medicin es by
therapeutic area,
c. rates of abandonment of medicines by therapeutic area,
d. recommendations for improved adherence and reduced
abandonment,
e. recommendations for improvement in formulary
management practices consistent with patient and
provider organization and other clinica l guidelines;
provided that the report shall be su bject to the
conditions in subsection C of this section;
11. The P&T committee must review and make a fo rmulary decision
on a new U.S. Food and Drug Administration approved drug with in
ninety (90) days of such drug's approval, or must provide a clinical
justification if this time frame is not met;
12. The P&T committee must review procedures for medical rev iew
of, and transitioning new plan enrollees to, appropriate formulary
alternatives to ensure that such procedures a ppropriately address
Req. No. 5318 Page 24 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
situations involving enrollees stabilized on drugs that are not on
the health plan formulary (or that are on formulary but subject to
prior authorization, step therapy, or other utilization management
requirements).
C. The health insurer, its agents, including pharmacy benefits
managers, and the Department shall not publish or otherwise disclose
any confidential, propriet ary information, including , but not
limited to, any information that would reveal the identi ty of a
specific health plan, the prices charged for a specific drug or
class of drugs, the amount of any rebates provided for a specific
drug or class of drugs, th e manufacturer, or that would otherwise
have the potential to compromise the financial, co mpetitive, or
proprietary nature of the information. Any suc h information shall
be protected from disclosure as confidential and proprietary
information, is not a pu blic record as defined in the Oklahoma Open
Records Act, Section 24A.1 et seq. of Title 51 of the Oklaho ma
Statutes, and shall not be disclosed directly or indirectly. A
health insurer 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 pharmac y benefits
manager that may receive or have access to rebate information.
SECTION 8. NEW LAW A new section 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 fo llows:
Req. No. 5318 Page 25 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
A. An enrollee's defined cost sharing for each prescription
drug shall be calculated at the point of s ale based on a price that
is reduced by an amount equal to at least eighty-five percent (85%)
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 a PBM to an administrative penalty of 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 w hich civil judgments
may be enforced.
C. Nothing in subsections A and B of 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 implementing the requi rements of this section, the state
shall only regulate a PBM to the extent permissible under applicable
law.
E. In complying with the provisions of this section, a PBM or
its agents shall not publish or otherwise reveal information
regarding the actual amount of reb ates 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 in the Oklahoma Open Records Act, Section
Req. No. 5318 Page 26 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
24A.1 et seq. 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, compe titive, 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 o f
the insurer that may receive or have access to rebate information.
SECTION 9. NEW LAW A new sectio n of law to be codifie d
in the Oklahoma Statutes as Section 6970 of Title 36, unless there
is created a duplication in numbering, reads as follows:
A. For purposes of this section:
1. "Defined cost sharing " means a deductible payment or
coinsurance amount imposed on an enroll ee for a covered prescription
drug under the enrollee's health plan;
2. "Insurer" means any health insurance issuer that is subject
to state law regulating in surance and offers health insuranc e
coverage, as defined in 42 U.S.C. , Section 300gg-91, or any state or
local governmental employer plan;
3. "Price protection rebate" means a negotiated price
concession that accrues directly or indirectly to the insurer, or
other party on behalf of the i nsurer, in the event of an increase in
Req. No. 5318 Page 27 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
the wholesale acquisitio n cost of a drug above a specified
threshold;
4. "Rebate" means:
a. negotiated price concessions including , but not
limited to, base price concessions (whethe r described
as a rebate or otherwise) and reasonable estimates of
any price protection rebates an d performance-based
price concessions that may accrue directly or
indirectly to the insurer during the coverag e year
from a manufacturer, dispensing pharmacy, or other
party in connection with the dispensing or
administration of a pre scription drug, and
b. reasonable estimates of any negotiated price
concessions, fees, and other administrative costs that
are passed through, or are reasonably anticipated to
be passed through, to the insurer and s erve to reduce
the insurer's liabilities for a prescription dru g.
B. An enrollee's defined cost sharing for each prescription
drug shall be calculated at the point of sale based on a price that
is reduced by an amount equ al to at least eighty-five percent (85%)
of all rebates received, or to be received, in connection with the
dispensing or administration of the prescription drug.
C. For any violation of this section, the I nsurance
Commissioner may subjec t an insurer to an administrative penal ty of
Req. No. 5318 Page 28 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
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 en forced.
D. Nothing in subsections A through C of this section shall
preclude an insurer fro m decreasing an enroll ee's defined cost
sharing by an amount greater than that required under subsection B
of this section.
E. In implementing the requirements of this section, the state
shall only regulate an insurer to the extent permissible under
applicable law.
F. In complying with the provisions of this section, an insurer
or its agents shall not publish or otherwise reveal info rmation
regarding the actual amount of rebates an insurer receives on a
product or therapeutic class of pr oducts, manufacturer, or pharmacy-
specific basis. Such information is protected as a trade secret, is
not a public record as defined in the Oklahoma Open Records Act,
Section 24A.1 et seq. of Title 51 of the Oklahoma St atutes, and
shall not be disclosed directly or indirectly, or in a manner th at
would allow for the identification of an individual pro duct,
therapeutic class of product s, or manufacturer, or in a manner that
would have the potential to compromise the financial, competitive,
or proprietary nature of the information. An insurer sha ll impose
the confidentiality protections of this section on any vendor or
Req. No. 5318 Page 29 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
downstream third party that performs health care or administrative
services on behalf of the insurer and that may receive or have
access to rebate information.
SECTION 10. This act shall become effective November 1, 2023.
59-1-5318 JM 01/09/23