SB773 HFLR Page 1 BOLD FACE denotes Committee Amendments. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 HOUSE OF REPRESENTATIVES - FLOOR VERSION STATE OF OKLAHOMA 1st Session of the 60th Legislature (2025) ENGROSSED SENATE BILL NO. 773 By: Gollihare and Jech of the Senate and Stinson of the House An Act relating to pharmacy benefit managers; amending 36 O.S. 2021, Sections 6960, as last amended by Section 1, Chapter 306, O.S.L. 2024, 6962, as last amended by Section 2, Chapter 306, O.S.L. 2024, 6965, as last amended by Section 3, Chapter 306, O.S.L. 2024, and Section 3, Chapter 38, O.S.L. 2022, a s last amended by Section 4, Chapter 306, O.S.L. 2024 (36 O.S. Supp. 2024, Section s 6960, 6962, 6965, and 6966.1), which relate to definitions, compliance review, and power, authority to investigate, examine, and enforce, and violations, penalties, and hea rings; modifying definitions; prohibiting certain circumstances; requiring nonpayment under providing venue for certain court proceeding; allowing Attorney General to obtain certain information; extending certain duties; allowing certain request for a cour t reporter; requiring certain refund of certain costs by Attorney General; establishing certain fines and penalties; updating statutory references; and providing an effective date . BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA: SECTION 1. AMENDATORY 36 O.S. 2021, Section 6960, as last amended by Section 1, Chapter 306, O.S.L. 2024 (36 O.S. Supp. 2024, Section 6960), is amended to read as follows: SB773 HFLR Page 2 BOLD FACE denotes Committee Amendments. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Section 6960. A. For purposes of the Patient ’s Right to Pharmacy Choice Act: 1. “Covered entity” means a nonprofit hospital or medical service organization, for -profit hospital or medical service organization, insurer, health benefit plan, health maintenance organization, health program administered by the state in the capacity of providing health coverage, or an employer, labor union, or other group of persons that provides health coverage to persons in this state. This term does not include a health plan that provides coverage only for accidental injury, specified disease, hospital indemnity, disability income, or other limited benefit health insurance policies and contracts th at do not include prescription drug coverage; 2. “Health insurer” means any corporation, association, benefit society, exchange, partnership or indivi dual licensed by the Oklahoma Insurance Code; 3. “Health insurer payor ” means a health insurance company, health maintenance organization, union, hospital and medical services organization or any entity providing or administering a self-funded health benefit plan; 4. “Mail-order pharmacy” means a pharmacy licensed by this state that primarily dispenses and delivers covered drugs via common carrier; SB773 HFLR Page 3 BOLD FACE denotes Committee Amendments. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 5. “Pharmacy benefits manager ” or “PBM” means a person, business, or other entity that performs pharmacy be nefits management. The term shall include any business or entity licensed by the Insurance Department to perform PBM services, or a person or entity acting on behalf of a PBM in a contractual or employment relationship in the performance of pharmacy benef its management for a managed care company, nonprofit hospital, medical service organization, insurance co mpany, third-party payor or a health program administered by a department of this state; 6. “Pharmacy benefits management ” means a service provided to covered entities to facilitate the provisions of prescription drug benefits to covered individuals within the state, including, but not limited to, negotiating pricing and other terms with drug manufacturers and providers. Pharmacy benefits management ma y include any or all of the following services: a. claims processing, retail network management, and payment of claims to pharmacies for prescription drugs dispensed to covered individuals, b. administration or management of pharmacy discount cards or programs, c. clinical formulary development and management services, or d. c. rebate contracting and administration; SB773 HFLR Page 4 BOLD FACE denotes Committee Amendments. 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. “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; 8. “Retail pharmacy network ” means retail pharmacy providers contracted with a PBM in which the pharmacy primarily fills and sells prescriptions via a retail, storefront location; 9. “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; 10. “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 prescriptio n drugs that differs from the amount the PBM directly or indirectly pays the pharmacy or pharmacist for p roviding pharmacy services; 11. “Suburban service area ” means a five-digit ZIP code in which the population density is between one thousand (1,000) an d three thousand (3,000) individuals per square mile; and 12. “Urban service area” means a five-digit ZIP code in which the population density is greater than three thousand (3,000) individuals per square mile. B. Nothing in the definitions of pharmacy b enefits manager or pharmacy benefits management as such terms are defined in the Patient’s Right to Pharmacy Choice Act, the Pharmacy Audit Integrity Act, or Sections 357 through 360 of Title 59 of the Oklahoma SB773 HFLR Page 5 BOLD FACE denotes Committee Amendments. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Statutes shall be construed to deem the follo wing entities to be a pharmacy benefits manager: 1. An employer of its own self -funded health benefit plan, except, to the extent permitted by applicable law, where the employer without the utilization of a third party and unrelated to the employer’s own pharmacy: a. negotiates directly with drug manufacturers, b. processes claims on behalf of its members, o r c. manages its own retail network of pharmacies; or 2. A pharmacy that provides a patient with a discount card or program that is for exclusive use at the pharmacy offering the discount. SECTION 2. AMENDATORY 36 O.S. 2021, Section 6962, as last amended by Section 2, Chapter 306, O.S.L. 2024 (36 O.S. Supp. 2024, Section 6962), is amended to read as follows: Section 6962. A. The Attorney General shall review and approve retail pharmacy network access for all pharmacy benefits ma nagers (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 permit the use o f advertisement, promotion, solicitation, representation, proposal or offer that is untrue, deceptive or misleading; 2. Charge a pharmacist or pharmacy a fee related to the adjudication of a claim including without limitation a fee for: SB773 HFLR Page 6 BOLD FACE denotes Committee Amendments. 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 submission of a claim, b. enrollment or participation in a retail pharmacy network, or c. the development or managem ent of claims processing services or claims payment services related to participation in a retail pharmacy network; 3. Reimburse a pharmacy or pharmac ist in the state an amount less than the amount that the PBM reimburses a pharmacy owned by or under common ownership with a PBM for providing the same covered services. The reimbursement amount paid to the pharmacy shall be equal to the reimbursement amo unt 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 stat us 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; SB773 HFLR Page 7 BOLD FACE denotes Committee Amendments. 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. 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 paym ent 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. Fail to make any payment due to a pharmacy or pharmacist for covered services properly rendere d in the event a PBM terminates its contract with a plan sponsor or insurer; 9. Conduct or practice spread pricing, as defined in Section 6960 of this title, in this state; or 9. 10. Charge a pharmacist or pharmacy a fee related to participation in a ret ail 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 clai ms processing services or claims payment services. SB773 HFLR Page 8 BOLD FACE denotes Committee Amendments. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 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 individual of any differential between the individual ’s out-of- pocket cost or coverage with respect to acquisition of the drug and the amount an individual would pay to purchase the drug directly, and b. ensure that any entity that provides pharmacy benefits management services under a contract with any such health plan or health insurance coverage does not, with respect to such plan or coverage, restrict, directly or indirectly, a pharmacy that dispenses a prescription drug from i nforming, 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. SB773 HFLR Page 9 BOLD FACE denotes Committee Amendments. 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 pharmacy benefits manager ’s contract with a provider shall not prohibit, restrict, or limit disclosure of information or documents to the Attorney General, law enforcement or s tate 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, the Pharmacy Audit Integrity Act, and Sections 357 through 360 of Title 59 of the Oklahoma Statutes. D. A pharmacy benefits manager shall: 1. Establish and maintain an electronic claim in quiry processing system using the National Council for Prescription Drug Programs’ Programs’s 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 drug manufacturers and pharmacy audit recoupments; 3. Provide the Attorney General, insurers, self -funded employer plans and unions unrestricted audit rig hts of and access to the respective PBM pharmaceutical manufacturer and 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 including , but not limited to, SB773 HFLR Page 10 BOLD FACE denotes Committee Amendments. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 contract negotiations and any denials to providers to join networks. This documentation shall be made available to the Attorney General upon request; and 5. Report to the Attorney General, 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 rebate s passed on to the enrollees of each health insurer payor at the point of sale that reduced the applicable deductible, copayment, coinsure or other cost sharing amount of the enrollee, d. the individual and aggregate amount paid by the health insurer payor to the PBM for pharmacy services itemized by pharmacy, drug product and service provided, and e. the individual and aggregate amount a PBM paid a provider for pharmacy services itemized by pharmacy, drug product and service provided. E. Nothing in the Pa tient’s Right to Pharmacy Choice Act shall prohibit the Attorney General from requesting and obtaining detailed data, including raw data, in response to the information provided by a PBM in the quarterly reports required by this section. The SB773 HFLR Page 11 BOLD FACE denotes Committee Amendments. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Attorney General may alter the frequency of the reports required by this section at his or her sole discretion. F. The Attorney General may promulgate rules to implement the provisions of the Patient ’s Right to Pharmacy Choice Act, the Pharmacy Audit Integrity Act, an d Sections 357 through 360 of Title 59 of the Oklahoma Statutes. SECTION 3. AMENDATORY 36 O.S. 2021, Section 6965, as last amended by Section 3, Chapter 306, O.S.L. 2024 (36 O.S. Supp. 2024, Section 6965), is amended to read as fo llows: Section 6965. A. The Attorney General shall have power and authority to examine and investigate the affairs of every pharmacy benefits manager (PBM) engaged in pharmacy benefits management in this state in order to determine whether such entity is in compliance with the Patient ’s Right to Pharmacy Choice Act, the Pharmacy Audit Integrity Act, and Sections 357 through 360 of Title 59 of the Oklahoma Statutes. B. The Attorney General shall have the power and authority to subpoena witnesses and recor ds, whether prior to or during an investigation or prosecution of a complaint, from any relevant entity or persons to ensure compliance with the Patient ’s Right to Pharmacy Choice Act, the Pharmacy Audit Integrity Act, and Sections 357 through 360 of Title 59 of the Oklahoma Statutes. C. All PBM files and records shall be subject to examination by the Attorney General or by duly appointed designees. The Attorney SB773 HFLR Page 12 BOLD FACE denotes Committee Amendments. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 General, authorized employees and examiners shall have access to any of a PBM’s files and records that may relate to a particular complaint under investigation or to an inquiry or examination by the Attorney General. D. Every officer, director, employee or agent of the PBM, upon receipt of any inquiry from the Attorney General, shall, within twenty (20) days from the date the inquiry is sent, furnish the Attorney General with an adequate response to the inquiry. E. When making an examination under this section, the Attorney General may retain subject matter experts, attorneys, appraisers, independent actuaries, independent certified public accountants or an accounting firm or individual holding a per mit to practice public accounting, certified financial examiners or other professionals and specialists as examiners, the cost of which shall be borne by the PBM that is the subject of the examination. F. 1. Protected health information (PHI) held by a PBM shall be provided at the request of the Attorney General for the purpose of conducting investigations into potential violations of state laws and regulations related to the PBM. Disclosure of protected health information shall be limited to the extent necessary for the investigation and enforcement of state law. 2. All disclosures of protected health information shall be made in compliance with all applicable federal and state privacy laws, including the Health Insurance Portability and Accountability SB773 HFLR Page 13 BOLD FACE denotes Committee Amendments. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Act of 1996 (HIPAA), and other relevant laws protecting the privacy and confidentiality of health information. 3. Any protected health information obt ained for an investigation shall be handled and maintained per applicable federal and state privacy laws and regulations, including HIPAA. 4. Unauthorized disclosure of protected health information obtained during an investigation is strictly prohibited a nd subject to legal penalties. G. 1. If the Attorney General, after notice and opportunity for hearing, finds that any PBM operating within this state has not fully cooperated with an investigation or inquiry conducted by the Attorney General related to compliance with the Patient ’s Right to Pharmacy Choice Act, the Pharmacy Audit Integrity Act, and Section s 357 through 360 of Title 59 of the Oklahoma Statutes, the Attorney General may instruct the Insurance Commissioner that the PBM be censured or his or her license be suspended or revoked. If the Attorney General makes such instruction, the Commissioner shall enforce the instructed action within thirty (30) days. 2. In addition to or in lieu of any censure, suspension, or revocation by the Commissioner , the Attorney General may levy a civil or administrative fine not less than One Hundred Dollars ($100.00) and not greater than Ten Thousand Dollars ($10,000.00) for each violation of this subsection and assess any other penalty or remedy authorized by thi s act section and Sections 6960, 6962, SB773 HFLR Page 14 BOLD FACE denotes Committee Amendments. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 6966.1, 6966.2, and 6967 of this title . For purposes of this section, each day a PBM fails to comply with an investigation or inquiry may be considered a separate violation. H. The proper venue to compel compliance with a subpoena of a person or entity under this section shall be in the Oklahoma County District Court. I. No provision of this state ’s law shall be construed to prohibit the Attorney General from obtaining any information or documentation pertaining to prescription drug transactions including, but not limited to, data, statements, testimonies, contracts, communications, provider manuals, or any other documentation or materials, whether related to discount programs, loyalty programs, or otherwise. The du ty to provide cooperation as set forth in this section shall extend to all PBMs, insurers, auditors, employers, vendors, or any other individual s or entities acting on behalf of or in collaboration with a PBM. SECTION 4. AMENDATORY Section 3, Chapter 38, O.S.L. 2022, as last amended by Section 4, Chapter 306, O.S.L. 2024 (36 O.S. Supp. 2024, Section 6966.1), is amended to read as follows : Section 6966.1. A. The Insurance Commissioner may censure, suspend, revoke, or refuse to iss ue or renew a license of or levy a civil penalty against any person licensed under the insurance laws of this state for any violation of the Patient ’s Right to Pharmacy Choice Act, Section 6958 et seq. of this title. SB773 HFLR Page 15 BOLD FACE denotes Committee Amendments. 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. 1. If the Attorney General finds, after notice and opportunity for hearing, that a pharmacy benefits manager (PBM) violated one or more provisions of the Patient ’s Right to Pharmacy Choice Act, the Pharmacy Audit Integrity Act or the provisions of Sections 357 through 360 of Title 59 of th e Oklahoma Statutes, the Attorney General may instruct the Insurance Commissioner that the PBM be censured or his or her license be suspended or revoked. If the Attorney General makes such instruction, the Commissioner shall enforce such action within thi rty (30) days. 2. In addition to or in lieu of any censure or suspension or revocation of a license by the Commissioner, the Attorney General may levy a civil or administrative fine not less than One Hundred Dollars ($100.00) and not greater than Ten Thou sand Dollars ($10,000.00) for each violation of the provisions of the Patient ’s Right to Pharmacy Choice Act, the Pharmacy Audit Integrity Act or the provisions of Sections 357 through 360 of Title 59 of the Oklahoma Statutes. 3. The Attorney General may order restitution for economic loss suffered by pharmacies or patients for violations of the Patient ’s Right to Pharmacy Choice Act, the Pharmacy Audit Integrity Act, or the provisions of Sections 357 through 360 of Title 59 of the Oklahoma Statutes. C. Notwithstanding whether the license of a PBM has been issued, suspended, revoked, surrendered or lapsed by operation of SB773 HFLR Page 16 BOLD FACE denotes Committee Amendments. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 law, the Attorney General is hereby authorized to enforce the provisions of the Patient ’s Right to Pharmacy Choice Act and impose any penalty or remedy authorized under the act against a PBM under investigation for or charged with a violation of the Patient ’s Right to Pharmacy Choice Act, the Pharmacy Audit Integrity Act, the provisions of Sections 357 through 360 of Title 59 of the Oklahom a Statutes or any provision of the insurance laws of this state. D. Each day that a PBM conducts busines s in this state without a license from the Insurance Department shall be deemed a violation of the Patient’s Right to Pharmacy Choice Act. E. 1. All hearings conducted by the Office of the Attorney General pursuant to this section shall be public and held in accordance with the Administrative Procedures Act. 2. Hearings shall be held at the Office of the Attorney General or any other place the Attorne y General may deem convenient. 3. The Attorney General, upon written request from a PBM affected by the hearing, shall cause a full stenographic record of the proceedings to be made by a competent court reporter. This record shall be at the expense of th e PBM. The Attorney General may request a court reporter without a request from a PBM, which shall be at the cost of the Office of the Attorney General unless the Attorney General is the prevailing party in litigation following a final order. SB773 HFLR Page 17 BOLD FACE denotes Committee Amendments. 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. The ordinary fees and costs of the hearing examiner appointed pursuant to Section 319 of this title may be assess ed by the hearing examiner against the respondent unless the respondent is the prevailing party. F. 1. Any PBM whose license has been censured, suspe nded, revoked, or denied renewal, or who has had monetary damages or a fine levied against him or her shall have the right of appeal from the final order of the Attorney General, pursuant to Section 318 et seq. of Title 75 of the Oklahoma Statutes . 2. Any monetary damages, administrative fines, or court costs owed by the PBM resulting from a ny appeal of a final order of the Attorney General pursuant to Section 318 of Title 75 of the Oklahoma Statutes shall be placed in a holding account with the Office of the Attorney General within thirty (30) days of the issuance of the final order. 3. If the PBM prevails on every issue raised in the appeal of a final order of the Attorney General pursuant to Section 318 of Title 75 of the Oklahoma Statutes, the Attorney General shall refund all monies related to the appeal at issue and paid by the PBM within sixty (60) days of the expiration of the appeal deadlines for the Office of the Attorney General . 4. Any instance in which a PBM fails to pay monies owed as a result of a final order or an appeal of a final order within thirty (30) days of the issuance of the final order shall be considered a SB773 HFLR Page 18 BOLD FACE denotes Committee Amendments. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 separate violation of the provisions of Sections 6958 through 6969 of this title and Sections 356 through 356.5 and 357 throug h 360 of Title 59 of the Oklahoma Statutes . 5. The PBM shall be assessed a fine of Ten Thousand Dollars ($10,000.00) per calendar day for each day the PBM fails to comply with this section. 6. A PBM that fails to comply with this section for more than six (6) months shall have its license to operate in this state suspended for the duration of time it takes the PBM to comply with this section. G. If the Attorney General determines, based upon an investigation of complaints, that a PBM has engaged in viola tions of the provisions of the Patient ’s Right to Pharmacy Choice Act, the Pharmacy Audit Integrity Act, and Sections 357 through 360 of Title 59 of the Oklahoma Statutes with such frequency as to indicate a general business practice, and that the PBM shou ld be subjected to closer supervision with respect to those practices, the Attorney General may require the PBM to file a report at any periodic interval the Attorney General deems necessary. H. 1. The Attorney General shall have the authority to collect all fines, penalties, restitution, and interest thereon pursuant to the provisions of the Patient ’s Right to Pharmacy Choice Act, the Pharmacy Audit Integrity Act, and the provisions of Sections 357 through 360 of Title 59 of the Oklahoma Statutes, or any other SB773 HFLR Page 19 BOLD FACE denotes Committee Amendments. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 charge, cause of action, prelitigation settlement, or other settlement that requires the recovery of money as a result of violations of the Patient ’s Right to Pharmacy Choice Act. Funds collected by the Attorney General pursuant to the Patient ’s Right to Pharmacy Choice Act, the Pharmacy Audit Integrity Act, and Sections 357 through 360 of Title 59 of the Oklahoma Statutes shall be deposited into the Attorney General ’s Pharmacy Benefits Manager Enforcement Revolving Fund created in Section 5 of this act 6966.2 of this title. 2. Costs of investigation, litigation, attorney fees, and other expenses incurred shall be retained by the Office of the Attorney General. Remaining funds shall be distributed to pharmacists, patients, or other injured parties as determined by the Attorney General. 3. The Attorney General shall promulgate rules for the distribution of funds pursuant to this subsection. SECTION 5. This act shall become effective November 1, 2025. COMMITTEE REPORT BY: COMMITTEE ON HEALTH AND HUMAN SERVICES, dated 04/15/2025 – DO PASS.