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SENATE FLOOR VERSION
April 11, 2023
ENGROSSED HOUSE
BILL NO. 2853 By: Wallace and Caldwell (Chad)
of the House
and
Montgomery, Rogers, Hicks,
Kirt, Kidd, Murdock,
Stanley, Standridge, a nd
Garvin of the Senate
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. 20 22 (36 O.S. Supp.
2022, Section 6960), which relates to definitions;
defining terms; creating PBM disclosures; amending 36
O.S. 2021, Section 6962, as amended by Section 2,
Chapter 38, O.S.L. 2022 (36 O.S. Supp. 2022, Section
6962), which relates to pharma cy benefits manager
compliance; creating duties; amending 36 O.S. 2021,
Section 6964, which relates to a formulary for
prescription drugs; creating agency duties; providing
cost sharing calculation methodo logy, limitations,
and requirements; creating penalties; clarifying
authority to take certain actions; prohibiting the
disclosure of certain informat ion; declaring that
certain information not be considered 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:
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SECTION 1. NEW LAW A new section of law not to be
codified in the Oklahoma Statutes reads as follows:
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 medical
service organization, insurer, health coverage plan or health
maintenance organization; a health program administered by the state
in the capacity of provider 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 pla n that provides
coverage only for accidental injury, specified diseas e, hospital
indemnity, disability income, or other li mited benefit health
insurance policies and contracts that do not include prescription
drug coverage;
2. "Covered individual" means a member, participant, enrollee,
contract holder or policy holder or b eneficiary of a covered entity
who is provided health coverage by the covered entity. A covered
individual includes any dependent or other person pr ovided health
coverage through a polic y, contract or plan for a covered
individual;
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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 dr ugs, medical product or device;
5. "Multisource drug product reimbur sement" (reimbursement)
means the total amount paid t o a pharmacy inclusive of any reduction
in payment to the pharmacy, excluding prescription dispe nse fees;
6. "Pharmacy benefits manag ement" means a service provided to
covered entities to facilitate the provision of prescription drug
benefits to covered i ndividuals within the state, including
negotiating pricing and other terms with drug manufacture rs and
providers. Pharmacy benefits m anagement may include any or all of
the following services:
a. claims processing, performance of drug utilization
review, processing of drug prior authorization
requests, retail network management and payment of
claims to pharmacies for prescription drugs dispensed
to covered individuals,
b. clinical formulary development a nd management
services,
c. rebate contracting an d administration,
d. certain patient compliance, therapeutic intervention
and generic substitution pr ograms, or
e. disease management progr ams,
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f. adjudication of appeals and grievances related to the
prescription drug benefit, or
g. controlling the cost of pre scription drugs;
7. "Pharmacy benefits manager" or "PBM" means a person,
business or other enti ty that, either directly or through an
intermediary, performs pharmacy benefits management. The term
includes a person or entity acting for a PBM in a contract ual or
employment relationship in the performance of pharmacy benefits
management for a managed care company, nonprofit hospital, medi cal
service organization, insurance company, third-party payor, or a
health program administered by an agency of this stat e. PBM does
not include a Pharmacy Services Administrative Organization ;
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 licensed 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 definition of
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pharmacy benefits management in this state, a pharmac y benefits
manager or any entity acting as one in a contractual or employment
relationship for a covered entity sha ll first obtain a license from
the Oklahoma Insurance D epartment, and the Department 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, i nclude 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 t he
procurement of a surety 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 with 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
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corporation, and has five or more partners, members, or
stockholders:
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;
7. A signed statement indicating 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 describing all relevant convictions or violations;
and
8. Any other information the Com missioner deems necessary to
review.
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 investigative 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 wi th any of the provisions hereby
established or with the rules promulgated by the Department; for
conduct likely to mislead, deceive or defraud th e public or the
Department; for unfair or de ceptive business practices or for
nonpayment of a renewal fee or fi ne. 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 (3 6 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
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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 identifyi ng information
regarding any health plan, prescription drug, or therapeutic class,
and shall be calculated by dividi ng:
a. the aggregate dollar amount of all rebates that the
PBM received during the prior calendar year from all
pharmaceutical manufacturers and did not pass through
to the PBM's health plan or health insurer 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 imposed on an enrollee for a cover ed prescription
drug under the enrollee's health plan;
4. "Formulary" means a list of prescription drugs, as well as
accompanying tiering and other coverage inf ormation, that has been
developed by an issuer, a health plan, or the designee of a health
insurer or health plan, which the health insurer, health pla n, or
designee of the health insurer or health plan references in
determining applicable coverage and ben efit levels;
5. "Generic equivalent" means a drug that is designated to be
therapeutically equivalent, as indicated by the United States Food
and Drug Administration's "Approved Drug Products with Therapeutic
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Equivalence Evaluations"; provided, however, t hat a drug shall not
be considered a generic equivalent until the drug becomes nationally
available;
6. "Health insurer" means any corporation, associ ation, benefit
society, exchange, partnership or individual subject to state law
requires insurance and licensed by under 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 connection 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 company,
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, deliver,
arrange for, pay for, or reimburse any of the costs of health
services;
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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 paragra ph 6 of Section 357 of
Title 59 of the Oklahoma Statutes, 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. PBM does not include a Pharmacy Services
Administrative Organiz ation;
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;
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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 performa nce-based
price concessions that may accrue directly or
indirectly to a health insurer, health plan, or 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 a health insurer, health plan, or PBM and
serve to reduce the health insurer, health plan, or
PBM's liabilities for a prescription 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 retail, 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;
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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 prescri ption drugs that
differs from the amount the PBM directly 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
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. 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 net work 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, proposa l 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:
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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 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 reim burses 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 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 probatio n status, with the State Board of
Pharmacy;
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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 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 rendered in the event a PBM terminates a
provider from a pharmacy benefits manager network ;
8. Conduct or practice Either directly or through an
intermediary, agent, or affiliate, engag e in, facilitate, or enter
into a contract with another person involv ing spread pricing, as
defined in Section 1 6960 of this act title, in this state; or
9. Charge a pharmacist or pharmacy a fee related to
participation in a retail pharmacy network inclu ding 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 manageme nt of claims
processing services or cl aims payment services; or
10. Prohibit or penalize a pharmacy or pha rmacist for:
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a. disclosing to an individual information regarding the
existence and clinical efficacy of a generic
equivalent that would be less expe nsive to the
enrollee:
(1) under his or her health 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 orig inally
prescribed, or
b. selling to an individual, instead of a parti cular
prescribed drug, a therapeutically equivalent drug
that would be less expensive to the enrollee:
(1) under his or her health plan prescription drug
benefit, or
(2) outside his or her health plan prescription drug
benefit, without requesting any healt h plan
reimbursement, than the drug that was originally
prescribed.
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:
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a. not restrict, directly or indirectly, any pharmacy
that dispenses a prescription 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 acqui sition 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, 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 the amount an individual
would pay for acquisition of the drug without using
any health plan or health insurance coverage.
2. A pharmacy benefit s 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
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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 electronic claim inquiry
processing system using the National Council for Prescription Drug
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 aggregate
prescription drug discounts, rebates received from dr ug
manufacturers and pharmacy audit recoupments;
3. Provide the Insu rance Commissioner, insurers, self-funded
employer plans and unions unrestricted audit rights of and access to
the respective PBM pharmaceutical manu facturer and provider
contracts, plan utilization data, plan pricing data, pharmacy
utilization data and ph armacy 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 join networks.
This documentation shall be made ava ilable to the Commissioner upon
request;
5. Report to the Commissioner, on a quarterly basis in a manner
and form prescribed by the Commissioner , along with any applicable
fees set by the Commissioner, a report on the first day of each
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calendar year, containing aggregate information for the prior
calendar year. The report shall include the following information
as it pertains to the PB M's contracts with insurers in the state,
broken out for each health insurer payor, on the following
information:
a. the aggregate amount of rebates received by the PBM
received from all pharmaceutical manufacturers ,
b. the aggregate amount of rebates distributed to the
appropriate health insurer payor,
c. the aggregate amount of rebates that the PBM received
from all pharmaceutical manufacturers and did not pass
through to health insurers,
d. the aggregate amount of rebates passed on to the
enrollees of each health insur er payor at the point of
sale that reduced the applicable deductible,
copayment, coinsure or other defined cost sharing
amount of the enrollee,
d.
e. the aggregate amount of all administrative fees the
PBM received,
f. the aggregate amount of health insurer administrative
service fees that the PBM received,
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g. the aggregate amount of all administrative fees tha t
the PBM received from all pharmaceutical manufacturers
and did not pass through to health insurers,
h. the aggregate retained rebate perc entage, across all
the PBM's contractual or othe r relationships with all
health insurers, the highest aggregate re tained rebate
percentage, the lowest aggregate retained rebate
percentage, and the mean aggregate retained rebate
percentage,
i. the individual and aggregate amount paid by the health
insurer payor to the PBM for pharmacy services
itemized by pharmacy, dru g product and service
provided, and
e.
j. the individual and aggregate amount a PBM paid a
provider for pharmacy services itemize d by pharmacy,
drug product and service provided.
The Department shall publish in a timely manner the information
that it receives under paragraph 5 of this subsection 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 classes of drugs, or the amount
of any rebates provided for specific drugs or classes of drugs.
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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 formulary, and timely notification of formulary
changes and/or product exclusions.
F. The PBM and the Department shall not publish or otherwise
disclose any information tha t 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 wou ld otherwise
have the potential to com promise the financial, competitive, or
proprietary nature of the information. Any such information shall
be protected from disclosure as confidential and proprietary
information, is not a public record as defined in t he Oklahoma Open
Records Act, Section 24A.1 et seq. of Title 51 of the Oklahoma
Statutes, and shall not be disclosed directly or indirectly. A PBM
shall impose the confidentiality protections of this section o n any
vendor or downstream third party that pe rforms health care or
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 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
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be a list of prescription drugs, both generic and brand name, used
by practitioners to identify drugs that offer the greates t overall
value.
B. A health insurer shall prohibit conflicts of interest for
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 th e person is
currently employed or was employed within the precedin g year by a
pharmaceutical manufacturer, developer, labeler, wholesaler or
distributor. A majority of P&T committee members shall be
practicing physicians, practicing pharmacists, or both, and shall be
licensed in Oklahoma;
2. A health insurer shall requi re any member of the P&T
committee to disclose any compensation or funding 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 suc h pharmaceutical
manufacturer, developer, labeler, wholesaler or distributor. P&T
committee members shall practice in various clinical specialties
that adequately represent the needs of health plan enrollees, and
there shall be an adequate number of high -volume specialists and
specialists treating rare and orphan diseases;
3. The P&T committee shall meet no less frequently than on a
quarterly basis;
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4. P&T committee formulary development shall be conducted
pursuant to a transparent process, and formulary decisions and
rationale shall be documented in writing, with any records and
documents relating to the process ava ilable upon request to the
health plan, subject to the conditions in subsection C of this
section. In the case of P&T committee decisions th at 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
shall:
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 expertise who actively
treat patients in a specific therapeutic area, and the specific
conditions within a the rapeutic area, shall participate in formulary
decisions regarding each therapeutic area and specific condition;
6. The P&T committee shall base its clinical decisions on the
strength of scientific evidence, standards of practice, and
nationally accepted tre atment guidelines;
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7. The P&T committee shall consider whether a particular drug
has a clinically meaningful therapeutic advant age over other drugs
in terms of safety, effectiveness, or clinical outcome for patient
populations who may be treated with the d rug;
8. The P&T committee shall evaluate and analyze treatment
protocols and procedures related to the health plan's formulary at
least annually;
9. 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 utilizati on management
activities for clinical appropriateness and consistency with
industry standards and patient and provider organization guidelines;
10. The P&T committee shall annually review and provide a
written report to the pharmacy benefits manager on:
a. the percentage of prescription 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 medicines by
therapeutic area,
c. rates of abandonment of medicines by therapeutic area,
d. recommendations for improved adherence and reduced
abandonment,
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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;
11. The P&T committee shall review and make a fo rmulary
decision on a new U.S. Food and Drug Administration approved drug
within ninety (90) days of such drug's approval, or shall provide a
clinical justification if this time frame is not met;
12. The P&T committee shall review procedures for medical
review of, and transiti oning new plan enrollees to, appropria te
formulary alternatives to ensure that such procedures a ppropriately
address 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, inc luding, but not
limited to, any information that would reveal the identity 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 t hat would otherwise
have the potential to compromise the financial, competitive, or
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proprietary nature of the information. Any such information shall
be protected from disclosure as confidential and proprietary
information, is not a pu blic record as defin ed 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 t hird 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 7. 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:
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 PB M to an administrative penalty of not
less than One Hundred Dollars ($100.00) nor more than Ten Thousand
Dollars ($10,000.00) for each occurrence. Such administrative
penalty may be enforced in the same manner in w hich civil judgments
may be enforced.
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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 st ate
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 p roducts, 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 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 fi nancial, 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 o f
the insurer that may receive or have access to rebate information.
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SECTION 8. NEW LAW A new sectio n of law to be codified
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 enrollee for a covered prescription
drug under the enrollee's health plan;
2. "Insurer" means any health insurance issuer that is subje ct
to state law regulating in surance and offers health insurance
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 insurer, in the event of an increase in
the wholesale acquisition 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 and 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
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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 re asonably anticipated to
be passed through, to the insurer and serve to reduce
the insurer's liabilities for a prescription drug.
B. An enrollee's defined cost sharing for each prescription
drug shall be calculated at the point of sale based on a price tha t
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 subject an insurer to an administrative penalty of
not less than One Hundred Dollars ($100.00) nor more than Ten
Thousand Dollars ($10,000.00) for each occurrence. Such
administrative penalty may be enforced in the same manner in which
civil judgments may be enforced.
D. Nothing in subsections A through C of this section shall
preclude an insurer fro m decreasing an enrollee's defined cost
sharing by an amount greater than that required under subsection B
of this section.
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E. In implementing the requ irements 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 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 product s, or manufacturer, or in a manner tha t
would have the potential to compromise the financial, competitive,
or proprietary nature of the information. An insurer shall impose
the confidentiality protections of this section on any vendor or
downstream third party that performs health care or adm inistrative
services on behalf of the insurer and that may receive or have
access to rebate information.
SECTION 9. This act shall become effective November 1, 2023.
COMMITTEE REPORT BY: COMMITTEE ON RETIREMENT AND INSURANCE
April 11, 2023 - DO PASS