Wisconsin 2025-2026 Regular Session

Wisconsin Senate Bill SB203 Compare Versions

Only one version of the bill is available at this time.

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1	1	2025 - 2026 LEGISLATURE
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4	4	2025 SENATE BILL 203
5	5	April 16, 2025 - Introduced by Senators FELZKOWSKI, MARKLEIN, CABRAL-GUEVARA,
6	6	DASSLER-ALFHEIM, DRAKE, HABUSH SINYKIN, L. JOHNSON, KEYESKI, LARSON,
7	7	NASS, PFAFF, QUINN, RATCLIFF, ROYS, SPREITZER, WANGGAARD, WIMBERGER
8	8	and JAMES, cosponsored by Representatives NOVAK, TRANEL, ALLEN,
9	9	ARMSTRONG, BROOKS, CALLAHAN, FITZGERALD, B. JACOBSON, JOERS, KIRSCH,
10	10	KITCHENS, KNODL, KREIBICH, MCCARVILLE, MIRESSE, MURSAU, O'CONNOR,
11	11	RODRIGUEZ, SORTWELL, TITTL, WICHGERS and TUCKER. Referred to Committee
12	12	on Health.
13	13	AN ACT to repeal 632.865 (2) and 632.865 (5) (e); to renumber 632.865 (4); to
14	14	amend 40.51 (8), 40.51 (8m), 66.0137 (4), 120.13 (2) (g), 185.983 (1) (intro.),
15	15	609.83, 632.861 (4) (a), 632.865 (1) (ae) and 632.865 (6) (c) 3.; to create
16	16	632.861 (1m), 632.861 (3g), 632.861 (3r), 632.861 (4) (e), 632.862, 632.865 (1)
17	17	(ab) and (ac), 632.865 (1) (an), (aq) and (at), 632.865 (1) (bm), 632.865 (1) (cg)
18	18	and (cr), 632.865 (2d), 632.865 (2h), 632.865 (2p), 632.865 (2t), 632.865 (4) (b),
19	19	632.865 (4m), 632.865 (5d), 632.865 (5h), 632.865 (5p), 632.865 (5t), 632.865
20	20	(6) (bm), 632.865 (6) (c) 3m., 632.865 (6g), 632.865 (6r) and 632.865 (8) of the
21	21	statutes; relating to: regulation of pharmacy benefit managers, fiduciary and
22	22	disclosure requirements on pharmacy benefit managers, and application of
23	23	prescription drug payments to health insurance cost-sharing requirements.
24	24	Analysis by the Legislative Reference Bureau
25	25	This bill makes several changes to the regulation of pharmacy benefit
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36	36	11 2025 - 2026 Legislature
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40	40	managers and their interactions with pharmacies and pharmacists. Under current
41	41	law, pharmacy benefit managers are generally required to be licensed as a
42	42	pharmacy benefit manager or an employee benefit plan administrator by the
43	43	commissioner of insurance. A pharmacy benefit manager is an entity that
44	44	contracts to administer or manage prescription drug benefits on behalf of an
45	45	insurer, a cooperative, or another entity that provides prescription drug benefits to
46	46	Wisconsin residents. Major provisions of the bill are summarized below.
47	47	Pharmacy benefit manager regulation
48	48	The bill requires a pharmacy benefit manager to pay a pharmacy or
49	49	pharmacist a professional dispensing fee at a rate not less than is paid by the state
50	50	under the Medical Assistance program for each pharmaceutical product that the
51	51	pharmacy or pharmacist dispenses to an individual. The professional dispensing
52	52	fee is required to be paid in addition to the amount the pharmacy benefit manager
53	53	reimburses the pharmacy or pharmacist for the cost of the pharmaceutical product
54	54	that the pharmacy or pharmacist dispenses. The Medical Assistance program is a
55	55	joint state and federal program that provides health services to individuals who
56	56	have limited financial resources.
57	57	The bill prohibits a pharmacy benefit manager from assessing, charging, or
58	58	collecting from a pharmacy or pharmacist any form of remuneration that passes
59	59	from the pharmacy or pharmacist to the pharmacy benefit manager including
60	60	claim-processing fees, performance-based fees, network-participation fees, or
61	61	accreditation fees.
62	62	Further, under the bill, a pharmacy benefit manager may not use any
63	63	certification or accreditation requirement as a determinant of pharmacy network
64	64	participation that is inconsistent with, more stringent than, or in addition to the
65	65	federal requirements for licensure as a pharmacy and the requirements for
66	66	licensure as a pharmacy provided under state law.
67	67	The bill requires a pharmacy benefit manager to allow a participant or
68	68	beneficiary of a pharmacy benefits plan or program that the pharmacy benefit
69	69	manager serves to use any pharmacy or pharmacist in this state that is licensed to
70	70	dispense the pharmaceutical product that the participant or beneficiary seeks to
71	71	obtain if the pharmacy or pharmacist accepts the same terms and conditions that
72	72	the pharmacy benefit manager establishes for at least one of the networks of
73	73	pharmacies or pharmacists that the pharmacy benefit manager has established to
74	74	serve individuals in the state. A pharmacy benefit manager may establish a
75	75	preferred network of pharmacies or pharmacists and a nonpreferred network of
76	76	pharmacies or pharmacists; however, under the bill, a pharmacy benefit manager
77	77	may not prohibit a pharmacy or pharmacist from participating in either type of
78	78	network provided that the pharmacy or pharmacist is licensed by this state and the
79	79	federal government and accepts the same terms and conditions that the pharmacy
80	80	benefit manager establishes for other pharmacies or pharmacists participating in
81	81	the network that the pharmacy or pharmacist wants to join. Under the bill, a
82	82	pharmacy benefit manager may not charge a participant or beneficiary of a 2025 - 2026 Legislature
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86	86	pharmacy benefits plan or program that the pharmacy benefit manager serves a
87	87	different copayment obligation or additional fee, or provide any inducement or
88	88	financial incentive, for the participant or beneficiary to use a pharmacy or
89	89	pharmacist in a particular network of pharmacies or pharmacists that the
90	90	pharmacy benefit manager has established to serve individuals in the state.
91	91	Further, the bill prohibits a pharmacy benefit manager, third-party payer, or health
92	92	benefit plan from excluding a pharmacy or pharmacist from its network because the
93	93	pharmacy or pharmacist serves less than a certain portion of the population of the
94	94	state or serves a population living with certain health conditions.
95	95	The bill provides that a pharmacy benefit manager may neither prohibit a
96	96	pharmacy or pharmacist that dispenses a pharmaceutical product from, nor
97	97	penalize a pharmacy or pharmacist that dispenses a pharmaceutical product for,
98	98	informing an individual about the cost of the pharmaceutical product, the amount
99	99	in reimbursement that the pharmacy or pharmacist receives for dispensing the
100	100	pharmaceutical product, or any difference between the cost to the individual under
101	101	the individual[s pharmacy benefits plan or program and the cost to the individual if
102	102	the individual purchases the pharmaceutical product without making a claim for
103	103	benefits under the individual[s pharmacy benefits plan or program.
104	104	The bill prohibits any pharmacy benefit manager or any insurer or self-
105	105	insured health plan from requiring, or penalizing a person who is covered under a
106	106	health insurance policy or plan for using or for not using, a specific retail, mail-
107	107	order, or other pharmacy provider within the network of pharmacy providers under
108	108	the policy or plan. Prohibited penalties include an increase in premium, deductible,
109	109	copayment, or coinsurance.
110	110	The bill requires pharmacy benefit managers to remit payment for a claim to
111	111	a pharmacy or pharmacist within 30 days from the day that the claim is submitted
112	112	to the pharmacy benefit manager by the pharmacy or pharmacist.
113	113	Pharmaceutical product reimbursements
114	114	The bill provides that a pharmacy benefit manager that uses a maximum
115	115	allowable cost list must include all of the following information on the list: 1) the
116	116	average acquisition cost of each pharmaceutical product and the cost of the
117	117	pharmaceutical product set forth in the national average drug acquisition cost data
118	118	published by the federal centers for medicare and medicaid services; 2) the average
119	119	manufacturer price of each pharmaceutical product; 3) the average wholesale price
120	120	of each pharmaceutical product; 4) the brand effective rate or generic effective rate
121	121	for each pharmaceutical product; 5) any applicable discount indexing; 6) the federal
122	122	upper limit for each pharmaceutical product published by the federal centers for
123	123	medicare and medicaid services; 7) the wholesale acquisition cost of each
124	124	pharmaceutical product; and 8) any other terms that are used to establish the
125	125	maximum allowable costs.
126	126	The bill provides that a pharmacy benefit manager may place or continue a
127	127	particular pharmaceutical product on a maximum allowable cost list only if the
128	128	pharmaceutical product 1) is listed as a drug product equivalent or is rated by a 2025 - 2026 Legislature
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132	132	nationally recognized reference as Xnot ratedY or Xnot availableY; 2) is available for
133	133	purchase by all pharmacies and pharmacists in the state from national or regional
134	134	pharmaceutical wholesalers operating in the state; and 3) has not been determined
135	135	by the drug manufacturer to be obsolete. Further, the bill provides that any
136	136	pharmacy benefit manager that uses a maximum allowable cost list must provide
137	137	access to the maximum allowable cost list to each pharmacy or pharmacist subject
138	138	to the maximum allowable cost list, update the maximum allowable cost list on a
139	139	timely basis, provide a process for a pharmacy or pharmacist subject to the
140	140	maximum allowable cost list to receive notification of an update to the maximum
141	141	allowable cost list, and update the maximum allowable cost list no later than seven
142	142	days after the pharmacy acquisition cost of the pharmaceutical product increases
143	143	by 10 percent or more from at least 60 percent of the pharmaceutical wholesalers
144	144	doing business in the state or there is a change in the methodology on which the
145	145	maximum allowable cost list is based or in the value of a variable involved in the
146	146	methodology. A maximum allowable cost list is a list of pharmaceutical products
147	147	that sets forth the maximum amount that a pharmacy benefit manager will pay to
148	148	a pharmacy or pharmacist for dispensing a pharmaceutical product. A maximum
149	149	allowable cost list may directly establish maximum costs or may set forth a method
150	150	for how the maximum costs are calculated.
151	151	The bill further provides that a pharmacy benefit manager that uses a
152	152	maximum allowable cost list must provide a process for a pharmacy or pharmacist
153	153	to appeal and resolve disputes regarding claims that the maximum payment
154	154	amount for a pharmaceutical product is below the pharmacy acquisition cost. A
155	155	pharmacy benefit manager that receives an appeal from or on behalf of a pharmacy
156	156	or pharmacist under this bill is required to resolve the appeal and notify the
157	157	pharmacy or pharmacist of the pharmacy benefit manager[s determination no later
158	158	than seven business days after the appeal is received. If the pharmacy benefit
159	159	manager grants the relief requested in the appeal, the bill requires the pharmacy
160	160	benefit manager to make the requested change in the maximum allowable cost,
161	161	allow the pharmacy or pharmacist to reverse and rebill the relevant claim, provide
162	162	to the pharmacy or pharmacist the national drug code number published in a
163	163	directory by the federal Food and Drug Administration on which the increase or
164	164	change is based, and make the change effective for each similarly situated
165	165	pharmacy or pharmacist subject to the maximum allowable cost list. If the
166	166	pharmacy benefit manager denies the relief requested in the appeal, the bill
167	167	requires the pharmacy benefit manager to provide the pharmacy or pharmacist a
168	168	reason for the denial, the national drug code number published in a directory by the
169	169	FDA for the pharmaceutical product to which the claim relates, and the name of a
170	170	national or regional wholesaler that has the pharmaceutical product currently in
171	171	stock at a price below the amount specified in the pharmacy benefit manager[s
172	172	maximum allowable cost list.
173	173	The bill provides that a pharmacy benefit manager may not deny a
174	174	pharmacy[s or pharmacist[s appeal if the relief requested in the appeal relates to 2025 - 2026 Legislature
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178	178	the maximum allowable cost for a pharmaceutical product that is not available for
179	179	the pharmacy or pharmacist to purchase at a cost that is below the pharmacy
180	180	acquisition cost from the pharmaceutical wholesaler from which the pharmacy or
181	181	pharmacist purchases the majority of pharmaceutical products for resale. If a
182	182	pharmaceutical product is not available for a pharmacy or pharmacist to purchase
183	183	at a cost that is below the pharmacy acquisition cost from the pharmaceutical
184	184	wholesaler from which the pharmacy or pharmacist purchases the majority of
185	185	pharmaceutical products for resale, the pharmacy benefit manager must revise the
186	186	maximum allowable cost list to increase the maximum allowable cost for the
187	187	pharmaceutical product to an amount equal to or greater than the pharmacy[s or
188	188	pharmacist[s pharmacy acquisition cost and allow the pharmacy or pharmacist to
189	189	reverse and rebill each claim affected by the pharmacy[s or pharmacist[s inability to
190	190	procure the pharmaceutical product at a cost that is equal to or less than the
191	191	maximum allowable cost that was the subject of the pharmacy[s or pharmacist[s
192	192	appeal.
193	193	The bill prohibits a pharmacy benefit manager from reimbursing a pharmacy
194	194	or pharmacist in the state an amount less than the amount that the pharmacy
195	195	benefit manager reimburses a pharmacy benefit manager affiliate for providing the
196	196	same pharmaceutical product. Under the bill, a pharmacy benefit manager
197	197	affiliate is a pharmacy or pharmacist that is an affiliate of a pharmacy benefit
198	198	manager.
199	199	Finally, the bill allows a pharmacy or pharmacist to decline to provide a
200	200	pharmaceutical product to an individual or pharmacy benefit manager if, as a
201	201	result of a maximum allowable cost list, the pharmacy or pharmacist would be paid
202	202	less than the pharmacy acquisition cost of the pharmacy or pharmacist providing
203	203	the pharmaceutical product.
204	204	Drug formularies
205	205	This bill makes several changes with respect to drug formularies. Under
206	206	current law, a disability insurance policy that offers a prescription drug benefit, a
207	207	self-insured health plan that offers a prescription drug benefit, or a pharmacy
208	208	benefit manager acting on behalf of a disability insurance policy or self-insured
209	209	health plan must provide to an enrollee advanced written notice of a formulary
210	210	change that removes a prescription drug from the formulary of the policy or plan or
211	211	that reassigns a prescription drug to a benefit tier for the policy or plan that has a
212	212	higher deductible, copayment, or coinsurance. The advanced written notice of a
213	213	formulary change must be provided no fewer than 30 days before the expected date
214	214	of the removal or reassignment.
215	215	This bill provides that a disability insurance policy or self-insured health plan
216	216	that provides a prescription drug benefit shall make the formulary and all drug
217	217	costs associated with the formulary available to plan sponsors and individuals prior
218	218	to selection or enrollment. Further, the bill provides that no disability insurance
219	219	policy, self-insured health plan, or pharmacy benefit manager acting on behalf of a
220	220	disability insurance policy or self-insured health plan may remove a prescription 2025 - 2026 Legislature
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224	224	drug from the formulary except at the time of coverage renewal. Finally, the bill
225	225	provides that advanced written notice of a formulary change must be provided no
226	226	fewer than 90 days before the expected date of the removal or reassignment of a
227	227	prescription drug on the formulary.
228	228	Pharmacy networks
229	229	Under the bill, if an enrollee utilizes a pharmacy or pharmacist in a preferred
230	230	network of pharmacies or pharmacists, no disability insurance policy or self-
231	231	insured health plan that provides a prescription drug benefit or pharmacy benefit
232	232	manager that provides services under a contract with a policy or plan may require
233	233	the enrollee to pay any amount or impose on the enrollee any condition that would
234	234	not be required if the enrollee utilized a different pharmacy or pharmacist in the
235	235	same preferred network. Further, the bill provides that any disability insurance
236	236	policy or self-insured health plan that provides a prescription drug benefit, or any
237	237	pharmacy benefit manager that provides services under a contract with a policy or
238	238	plan, that has established a preferred network of pharmacies or pharmacists must
239	239	reimburse each pharmacy or pharmacist in the same network at the same rates.
240	240	Audits of pharmacists and pharmacies
241	241	This bill makes several changes to audits of pharmacists and pharmacies. The
242	242	bill requires an entity that conducts audits of pharmacists and pharmacies to
243	243	ensure that each pharmacist or pharmacy audited by the entity is audited under
244	244	the same standards and parameters as other similarly situated pharmacists or
245	245	pharmacies audited by the entity, that the entity randomizes the prescriptions that
246	246	the entity audits and the entity audits the same number of prescriptions in each
247	247	prescription benefit tier, and that each audit of a prescription reimbursed under
248	248	Part D of the federal Medicare program is conducted separately from audits of
249	249	prescriptions reimbursed under other policies or plans. The bill prohibits any
250	250	pharmacy benefit manager from recouping reimbursements made to a pharmacist
251	251	or pharmacy for errors that involve no actual financial harm to an enrollee or a
252	252	policy or plan sponsor unless the error is the result of the pharmacist or pharmacy
253	253	failing to comply with a formal corrective action plan. The bill further prohibits any
254	254	pharmacy benefit manager from using extrapolation in calculating reimbursements
255	255	that it may recoup, and instead requires a pharmacy benefit manager to base the
256	256	finding of errors for which reimbursements will be recouped on an actual error in
257	257	reimbursement and not a projection of the number of patients served having a
258	258	similar diagnosis or on a projection of the number of similar orders or refills for
259	259	similar prescription drugs. The bill provides that a pharmacy benefit manager that
260	260	recoups any reimbursements made to a pharmacist or pharmacy for an error that
261	261	was the cause of financial harm must return the recouped reimbursement to the
262	262	enrollee or the policy or plan sponsor who was harmed by the error.
263	263	Pharmacy benefit manager fiduciary and disclosure requirements
264	264	The bill provides that a pharmacy benefit manager owes a fiduciary duty to a
265	265	health benefit plan sponsor. The bill also requires that a pharmacy benefit 2025 - 2026 Legislature
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269	269	manager annually disclose all of the following information to the health benefit
270	270	plan sponsor:
271	271	1. The indirect profit received by the pharmacy benefit manager from owning
272	272	a pharmacy or health service provider.
273	273	2. Any payments made to a consultant or broker who works on behalf of the
274	274	plan sponsor.
275	275	3. From the amounts received from drug manufacturers, the amounts
276	276	retained by the pharmacy benefit manager that are related to the plan sponsor[s
277	277	claims or bona fide service fees.
278	278	4. The amounts received from network pharmacies and pharmacists and the
279	279	amount retained by the pharmacy benefit manager.
280	280	Discriminatory reimbursement of 340B entities
281	281	The bill prohibits a pharmacy benefit manager from taking certain actions
282	282	with respect to 340B covered entities, pharmacies and pharmacists contracted with
283	283	340B covered entities, and patients who obtain prescription drugs from 340B
284	284	covered entities. The 340B drug pricing program is a federal program that requires
285	285	pharmaceutical manufacturers that participate in the federal Medicaid program to
286	286	sell outpatient drugs at discounted prices to certain health care organizations that
287	287	provide health care for uninsured and low-income patients. Entities that are
288	288	eligible for discounted prices under the 340B drug pricing program include
289	289	federally qualified health centers, critical access hospitals, and certain public and
290	290	nonprofit disproportionate share hospitals. The bill prohibits pharmacy benefit
291	291	managers from doing any of the following:
292	292	1. Refusing to reimburse a 340B covered entity or a pharmacy or pharmacist
293	293	contracted with a 340B covered entity for dispensing 340B drugs.
294	294	2. Imposing requirements or restrictions on 340B covered entities or
295	295	pharmacies or pharmacists contracted with 340B covered entities that are not
296	296	imposed on other entities, pharmacies, or pharmacists.
297	297	3. Reimbursing a 340B covered entity or a pharmacy or pharmacist
298	298	contracted with a 340B covered entity for a 340B drug at a rate lower than the
299	299	amount paid for the same drug to pharmacies or pharmacists that are not 340B
300	300	covered entities or pharmacies or pharmacists contracted with a 340B covered
301	301	entity.
302	302	4. Assessing a fee, charge back, or other adjustment against a 340B covered
303	303	entity or a pharmacy or pharmacist contracted with a 340B covered entity after a
304	304	claim has been paid or adjudicated.
305	305	5. Restricting the access of a 340B covered entity or a pharmacy or
306	306	pharmacist contracted with a 340B covered entity to a third-party payer[s
307	307	pharmacy network solely because the 340B covered entity or the pharmacy or
308	308	pharmacist contracted with a 340B covered entity participates in the 340B drug
309	309	pricing program.
310	310	6. Requiring a 340B covered entity or a pharmacy or pharmacist contracted 2025 - 2026 Legislature
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314	314	with a 340B covered entity to contract with a specific pharmacy or pharmacist or
315	315	health benefit plan in order to access a third-party payer[s pharmacy network.
316	316	7. Imposing a restriction or an additional charge on a patient who obtains a
317	317	340B drug from a 340B covered entity or a pharmacy or pharmacist contracted with
318	318	a 340B covered entity.
319	319	8. Restricting the methods by which a 340B covered entity or a pharmacy or
320	320	pharmacist contracted with a 340B covered entity may dispense or deliver 340B
321	321	drugs.
322	322	9. Requiring a 340B covered entity or a pharmacy or pharmacist contracted
323	323	with a 340B covered entity to share pharmacy bills or invoices with a pharmacy
324	324	benefit manager, a third-party payer, or a health benefit plan.
325	325	Application of prescription drug payments
326	326	Health insurance policies and plans often apply cost-sharing requirements
327	327	and out-of-pocket maximum amounts to the benefits covered by the policy or plan.
328	328	A cost-sharing requirement is a share of covered benefits that an insured is
329	329	required to pay under a health insurance policy or plan. Cost-sharing requirements
330	330	include copayments, deductibles, and coinsurance. An out-of-pocket maximum
331	331	amount is a limit specified by a policy or plan on the amount that an insured pays,
332	332	and, once that limit is reached, the policy or plan covers the benefit entirely. The
333	333	bill generally requires health insurance policies that offer prescription drug
334	334	benefits, self-insured health plans, and pharmacy benefit managers acting on
335	335	behalf of policies or plans to apply amounts paid by or on behalf of an individual
336	336	covered under the policy or plan for brand name prescription drugs to any cost-
337	337	sharing requirement or to any calculation of an out-of-pocket maximum amount of
338	338	the policy or plan. Health insurance policies are referred to in the bill as disability
339	339	insurance policies.
340	340	Prohibited retaliation
341	341	The bill prohibits a pharmacy benefit manager from retaliating against a
342	342	pharmacy or pharmacist for reporting an alleged violation of certain laws
343	343	applicable to pharmacy benefit managers or for exercising certain rights or
344	344	remedies. Retaliation includes terminating or refusing to renew a contract with a
345	345	pharmacy or pharmacist, subjecting a pharmacy or pharmacist to increased audits,
346	346	or failing to promptly pay a pharmacy or pharmacist any money that the pharmacy
347	347	benefit manager owes to the pharmacy or pharmacist. The bill provides that a
348	348	pharmacy or pharmacist may bring an action in court for injunctive relief if a
349	349	pharmacy benefit manager is retaliating against the pharmacy or pharmacist as
350	350	provided in the bill. In addition to equitable relief, the court may award a pharmacy
351	351	or pharmacist that prevails in such an action reasonable attorney fees and costs.
352	352	For further information see the state fiscal estimate, which will be printed as
353	353	an appendix to this bill. 2025 - 2026 Legislature
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357	357	SECTION 1
358	358	The people of the state of Wisconsin, represented in senate and assembly, do
359	359	enact as follows:
360	360	SECTION 1. 40.51 (8) of the statutes is amended to read:
361	361	40.51 (8) Every health care coverage plan offered by the state under sub. (6)
362	362	shall comply with ss. 631.89, 631.90, 631.93 (2), 631.95, 632.72 (2), 632.722,
363	363	632.729, 632.746 (1) to (8) and (10), 632.747, 632.748, 632.798, 632.83, 632.835,
364	364	632.85, 632.853, 632.855, 632.861, 632.862, 632.867, 632.87 (3) to (6), 632.885,
365	365	632.89, 632.895 (5m) and (8) to (17), and 632.896.
366	366	SECTION 2. 40.51 (8m) of the statutes is amended to read:
367	367	40.51 (8m) Every health care coverage plan offered by the group insurance
368	368	board under sub. (7) shall comply with ss. 631.95, 632.722, 632.729, 632.746 (1) to
369	369	(8) and (10), 632.747, 632.748, 632.798, 632.83, 632.835, 632.85, 632.853, 632.855,
370	370	632.861, 632.862, 632.867, 632.885, 632.89, and 632.895 (11) to (17).
371	371	SECTION 3. 66.0137 (4) of the statutes is amended to read:
372	372	66.0137 (4) SELF-INSURED HEALTH PLANS. If a city, including a 1st class city,
373	373	or a village provides health care benefits under its home rule power, or if a town
374	374	provides health care benefits, to its officers and employees on a self-insured basis,
375	375	the self-insured plan shall comply with ss. 49.493 (3) (d), 631.89, 631.90, 631.93 (2),
376	376	632.722, 632.729, 632.746 (10) (a) 2. and (b) 2., 632.747 (3), 632.798, 632.85,
377	377	632.853, 632.855, 632.861, 632.862, 632.867, 632.87 (4) to (6), 632.885, 632.89,
378	378	632.895 (9) to (17), 632.896, and 767.513 (4).
379	379	SECTION 4. 120.13 (2) (g) of the statutes is amended to read:
380	380	120.13 (2) (g) Every self-insured plan under par. (b) shall comply with ss.
381	381	49.493 (3) (d), 631.89, 631.90, 631.93 (2), 632.722, 632.729, 632.746 (10) (a) 2. and
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404	404	SENATE BILL 203
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406	406	JPC:cjs&skw
407	407	SECTION 4
408	408	(b) 2., 632.747 (3), 632.798, 632.85, 632.853, 632.855, 632.861, 632.862, 632.867,
409	409	632.87 (4) to (6), 632.885, 632.89, 632.895 (9) to (17), 632.896, and 767.513 (4).
410	410	SECTION 5. 185.983 (1) (intro.) of the statutes is amended to read:
411	411	185.983 (1) (intro.) Every voluntary nonprofit health care plan operated by a
412	412	cooperative association organized under s. 185.981 shall be exempt from chs. 600 to
413	413	646, with the exception of ss. 601.04, 601.13, 601.31, 601.41, 601.42, 601.43, 601.44,
414	414	601.45, 611.26, 611.67, 619.04, 623.11, 623.12, 628.34 (10), 631.17, 631.89, 631.93,
415	415	631.95, 632.72 (2), 632.722, 632.729, 632.745 to 632.749, 632.775, 632.79, 632.795,
416	416	632.798, 632.85, 632.853, 632.855, 632.861, 632.862, 632.867, 632.87 (2) to (6),
417	417	632.885, 632.89, 632.895 (5) and (8) to (17), 632.896, and 632.897 (10) and chs. 609,
418	418	620, 630, 635, 645, and 646, but the sponsoring association shall:
419	419	SECTION 6. 609.83 of the statutes is amended to read:
420	420	609.83 Coverage of drugs and devices; application of payments.
421	421	Limited service health organizations, preferred provider plans, and defined
422	422	network plans are subject to ss. 632.853, 632.861, 632.862, and 632.895 (16t) and
423	423	(16v).
424	424	SECTION 7. 632.861 (1m) of the statutes is created to read:
425	425	632.861 (1m) REQUIRED DISCLOSURES. A disability insurance policy or self-
426	426	insured health plan that provides a prescription drug benefit shall make the
427	427	formulary and all drug costs associated with the formulary available to plan
428	428	sponsors and individuals prior to selection or enrollment.
429	429	SECTION 8. 632.861 (3g) of the statutes is created to read:
430	430	632.861 (3g) CHOICE OF PROVIDER; PENALTY PROHIBITED. No insurer, self-
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454	454	SENATE BILL 203
455	455	- 11 - LRB-1278/1
456	456	JPC:cjs&skw
457	457	SECTION 8
458	458	insured health plan, or pharmacy benefit manager may require, or penalize a
459	459	person who is covered under a disability insurance policy or self-insured health
460	460	plan for using or for not using, a specific retail, specific mail-order, or other specific
461	461	pharmacy provider within the network of pharmacy providers under the policy or
462	462	plan. A prohibited penalty under this subsection includes an increase in premium,
463	463	deductible, copayment, or coinsurance.
464	464	SECTION 9. 632.861 (3r) of the statutes is created to read:
465	465	632.861 (3r) PHARMACY NETWORKS. (a) If an enrollee utilizes a pharmacy or
466	466	pharmacist in a preferred network of pharmacies or pharmacists, no disability
467	467	insurance policy or self-insured health plan that provides a prescription drug
468	468	benefit or pharmacy benefit manager that provides services under a contract with
469	469	a policy or plan may require the enrollee to pay any amount or impose on the
470	470	enrollee any condition that would not be required if the enrollee utilized a different
471	471	pharmacy or pharmacist in the same preferred network.
472	472	(b) Any disability insurance policy or self-insured health plan that provides a
473	473	prescription drug benefit, or any pharmacy benefit manager that provides services
474	474	under a contract with a policy or plan, that has established a preferred network of
475	475	pharmacies or pharmacists shall reimburse each pharmacy or pharmacist in the
476	476	same network at the same rates.
477	477	SECTION 10. 632.861 (4) (a) of the statutes is amended to read:
478	478	632.861 (4) (a) Except as provided in par. (b) and subject to par. (e), a
479	479	disability insurance policy that offers a prescription drug benefit, a self-insured
480	480	health plan that offers a prescription drug benefit, or a pharmacy benefit manager
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504	504	SENATE BILL 203
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506	506	JPC:cjs&skw
507	507	SECTION 10
508	508	acting on behalf of a disability insurance policy or self-insured health plan shall
509	509	provide to an enrollee advanced written notice of a formulary change that removes
510	510	a prescription drug from the formulary of the policy or plan or that reassigns a
511	511	prescription drug to a benefit tier for the policy or plan that has a higher deductible,
512	512	copayment, or coinsurance. The advanced written notice of a formulary change
513	513	under this paragraph shall be provided no fewer than 30 90 days before the
514	514	expected date of the removal or reassignment and shall include information on the
515	515	procedure for the enrollee to request an exception to the formulary change. The
516	516	policy, plan, or pharmacy benefit manager is required to provide the advanced
517	517	written notice under this paragraph only to those enrollees in the policy or plan
518	518	who are using the drug at the time the notification must be sent according to
519	519	available claims history.
520	520	SECTION 11. 632.861 (4) (e) of the statutes is created to read:
521	521	632.861 (4) (e) No disability insurance policy, self-insured health plan, or
522	522	pharmacy benefit manager acting on behalf of a disability insurance policy or self-
523	523	insured health plan may remove a prescription drug from the formulary except at
524	524	the time of coverage renewal.
525	525	SECTION 12. 632.862 of the statutes is created to read:
526	526	632.862 Application of prescription drug payments. (1) DEFINITIONS.
527	527	In this section:
528	528	(a) XBrand nameY has the meaning given in s. 450.12 (1) (a).
529	529	(b) XBrand name drugY means any of the following:
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551	551	22 2025 - 2026 Legislature
552	552	SENATE BILL 203
553	553	- 13 - LRB-1278/1
554	554	JPC:cjs&skw
555	555	SECTION 12
556	556	1. A prescription drug that contains a brand name and that has no medically
557	557	appropriate generic equivalent.
558	558	2. A prescription drug that contains a brand name and that has a medically
559	559	appropriate generic equivalent but to which the enrollee or other covered individual
560	560	has obtained access through any of the following:
561	561	a. Prior authorization.
562	562	b. A step therapy protocol.
563	563	c. The exceptions and appeals process of the disability insurance policy, self-
564	564	insured health plan, or pharmacy benefit manager.
565	565	(c) XCost-sharing requirementY means a deductible, copayment, or
566	566	coinsurance.
567	567	(d) XDisability insurance policyY has the meaning given in s. 632.895 (1) (a).
568	568	(e) XGeneric equivalentY means a drug product equivalent, as defined in s.
569	569	450.13 (1e), that is nationally available.
570	570	(f) XPharmacy benefit managerY has the meaning given in s. 632.865 (1) (c).
571	571	(g) XSelf-insured health planY has the meaning given in s. 632.85 (1) (c).
572	572	(2) APPLICATION OF PAYMENTS. Except as provided in sub. (4), a disability
573	573	insurance policy that offers a prescription drug benefit, a self-insured health plan,
574	574	or a pharmacy benefit manager acting on behalf of a disability insurance policy or
575	575	self-insured health plan shall apply to any cost-sharing requirement or to any
576	576	calculation of an out-of-pocket maximum amount of the disability insurance policy
577	577	or self-insured health plan, including the annual limitations on cost sharing
578	578	established under 42 USC 18022 (c) and 42 USC 300gg-6 (b), any amounts paid by
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601	601	23 2025 - 2026 Legislature
602	602	SENATE BILL 203
603	603	- 14 - LRB-1278/1
604	604	JPC:cjs&skw
605	605	SECTION 12
606	606	an enrollee or other individual covered under the disability insurance policy or self-
607	607	insured health plan, or by any person on behalf of the enrollee or individual, for
608	608	brand name drugs that are covered under the disability insurance policy or self-
609	609	insured health plan.
610	610	(3) CALCULATION OF COST-SHARING ANNUAL LIMITATIONS. For purposes of
611	611	calculating an enrollee[s contribution to the annual limitations on cost sharing
612	612	under 42 USC 18022 (c) and 42 USC 300gg-6 (b), a disability insurance policy that
613	613	offers a prescription drug benefit, a self-insured health plan, or a pharmacy benefit
614	614	manager acting on behalf of a disability insurance policy or self-insured health plan
615	615	shall include expenditures for any item or service covered under the disability
616	616	insurance policy or self-insured health plan if the item or service is included within
617	617	a category of essential health benefits, as described in 42 USC 18022 (b) (1), and
618	618	regardless of whether the disability insurance policy, self-insured health plan, or
619	619	pharmacy benefit manager classifies the item or service as an essential health
620	620	benefit.
621	621	(4) EXCEPTION; HIGH DEDUCTIBLE HEALTH PLANS. If applying the requirement
622	622	under sub. (2) to payments made by or on behalf of an enrollee or other individual
623	623	covered under a high deductible health plan, as defined under 26 USC 223 (c) (2),
624	624	would result in the enrollee failing to meet the definition of an eligible individual
625	625	under 26 USC 223 (c) (1), the disability insurance policy, self-insured health plan,
626	626	or pharmacy benefit manager shall begin applying the requirement under sub. (2)
627	627	to the disability insurance policy or self-insured health plan[s deductible after the
628	628	enrollee has satisfied the minimum deductible requirement under 26 USC 223 (c)
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652	652	SENATE BILL 203
653	653	- 15 - LRB-1278/1
654	654	JPC:cjs&skw
655	655	SECTION 12
656	656	(2) (A) (i). This subsection does not apply to any amounts paid for items or services
657	657	that are preventive care, as described in 26 USC 223 (c) (2) (C).
658	658	SECTION 13. 632.865 (1) (ab) and (ac) of the statutes are created to read:
659	659	632.865 (1) (ab) X340B covered entityY has the meaning given for Xcovered
660	660	entityY under 42 USC 256b (a) (4).
661	661	(ac) X340B drugY has the meaning given for Xcovered drugY under 42 USC
662	662	256b (b) (2).
663	663	SECTION 14. 632.865 (1) (ae) of the statutes is amended to read:
664	664	632.865 (1) (ae) XHealth benefit planY has the meaning given means a health
665	665	benefit plan, as defined in s. 632.745 (11), that is not prescription drug coverage
666	666	provided under part D of medicare under Title XVIII of the federal Social Security
667	667	Act, 42 USC 1395 to 1395lll.
668	668	SECTION 15. 632.865 (1) (an), (aq) and (at) of the statutes are created to read:
669	669	632.865 (1) (an) XMaximum allowable cost listY means a list of
670	670	pharmaceutical products that sets forth the maximum amount a pharmacy benefit
671	671	manager will pay to a pharmacy or pharmacist for dispensing a pharmaceutical
672	672	product. The list may directly establish the maximum amounts or set forth a
673	673	method for how the maximum amounts are calculated.
674	674	(aq) XPharmaceutical productY means a prescription generic drug,
675	675	prescription brand-name drug, prescription biologic, or other prescription drug,
676	676	vaccine, or device.
677	677	(at) XPharmaceutical wholesalerY means a person that sells and distributes,
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700	700	SENATE BILL 203
701	701	- 16 - LRB-1278/1
702	702	JPC:cjs&skw
703	703	SECTION 15
704	704	directly or indirectly, a pharmaceutical product and that offers to deliver the
705	705	pharmaceutical product to a pharmacy or pharmacist.
706	706	SECTION 16. 632.865 (1) (bm) of the statutes is created to read:
707	707	632.865 (1) (bm) XPharmacy acquisition costY means the amount that a
708	708	pharmaceutical wholesaler charges a pharmacy or pharmacist for a
709	709	pharmaceutical product as listed on the pharmacy[s or pharmacist[s billing invoice.
710	710	SECTION 17. 632.865 (1) (cg) and (cr) of the statutes are created to read:
711	711	632.865 (1) (cg) XPharmacy benefit manager affiliateY means a pharmacy or
712	712	pharmacist that is an affiliate of a pharmacy benefit manager.
713	713	(cr) XPharmacy services administrative organizationY means an entity that
714	714	provides contracting and other administrative services to pharmacies or
715	715	pharmacists to assist them in their interactions with 3rd-party payers, pharmacy
716	716	benefit managers, pharmaceutical wholesalers, and other entities.
717	717	SECTION 18. 632.865 (2) of the statutes is repealed.
718	718	SECTION 19. 632.865 (2d) of the statutes is created to read:
719	719	632.865 (2d) PHARMACEUTICAL PRODUCT REIMBURSEMENTS . (ag) Contents of
720	720	maximum allowable cost lists. A pharmacy benefit manager that uses a maximum
721	721	allowable cost list shall include all of the following information on the maximum
722	722	allowable cost list:
723	723	1. The average acquisition cost of each pharmaceutical product and the cost of
724	724	the pharmaceutical product set forth in the national average drug acquisition cost
725	725	data published by the federal centers for medicare and medicaid services.
726	726	2. The average manufacturer price of each pharmaceutical product.
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750	750	SENATE BILL 203
751	751	- 17 - LRB-1278/1
752	752	JPC:cjs&skw
753	753	SECTION 19
754	754	3. The average wholesale price of each pharmaceutical product.
755	755	4. The brand effective rate or generic effective rate for each pharmaceutical
756	756	product.
757	757	5. Any applicable discount indexing.
758	758	6. The federal upper limit for each pharmaceutical product published by the
759	759	federal centers for medicare and medicaid services.
760	760	7. The wholesale acquisition cost of each pharmaceutical product.
761	761	8. Any other terms that are used to establish the maximum allowable costs.
762	762	(ar) Regulation of maximum allowable cost lists. A pharmacy benefit
763	763	manager may place or continue a particular pharmaceutical product on a
764	764	maximum allowable cost list only if all of the following apply to the pharmaceutical
765	765	product:
766	766	1. The pharmaceutical product is listed as a drug product equivalent, as
767	767	defined in s. 450.13 (1e), or is rated by a nationally recognized reference, such as
768	768	Medi-Span or Gold Standard Drug Database, as Xnot ratedY or Xnot available.Y
769	769	2. The pharmaceutical product is available for purchase by all pharmacies
770	770	and pharmacists in this state from national or regional pharmaceutical wholesalers
771	771	operating in this state.
772	772	3. The pharmaceutical product has not been determined by the drug
773	773	manufacturer to be obsolete.
774	774	(b) Access and update obligations. A pharmacy benefit manager that uses a
775	775	maximum allowable cost list shall do all of the following:
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798	798	SENATE BILL 203
799	799	- 18 - LRB-1278/1
800	800	JPC:cjs&skw
801	801	SECTION 19
802	802	1. Provide access to the maximum allowable cost list to each pharmacy or
803	803	pharmacist subject to the maximum allowable cost list.
804	804	2. Update the maximum allowable cost list on a timely basis.
805	805	3. Update the maximum allowable cost list no later than 7 days after any of
806	806	the following occurs:
807	807	a. The pharmacy acquisition cost of a pharmaceutical product increases by 10
808	808	percent or more from at least 60 percent of the pharmaceutical wholesalers doing
809	809	business in this state.
810	810	b. There is a change in the methodology on which the maximum allowable
811	811	cost list is based or in the value of a variable involved in the methodology.
812	812	4. Provide a process for a pharmacy or pharmacist subject to the maximum
813	813	allowable cost list to receive prompt notification of an update to the maximum
814	814	allowable cost list.
815	815	(c) Appeal process. 1. A pharmacy benefit manager that uses a maximum
816	816	allowable cost list shall provide a process for a pharmacy or pharmacist to appeal
817	817	and resolve disputes regarding claims that the maximum payment amount for a
818	818	pharmaceutical product is below the pharmacy acquisition cost.
819	819	2. A pharmacy benefit manager required to provide an appeal process under
820	820	subd. 1. shall do all of the following:
821	821	a. Provide a dedicated telephone number and email address or website that a
822	822	pharmacy or pharmacist may use to submit an appeal.
823	823	b. Allow a pharmacy or pharmacist to submit an appeal directly on the
824	824	pharmacy[s or pharmacist[s own behalf.
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848	848	SENATE BILL 203
849	849	- 19 - LRB-1278/1
850	850	JPC:cjs&skw
851	851	SECTION 19
852	852	c. Allow a pharmacy services administrative organization to submit an appeal
853	853	on behalf of a pharmacy or pharmacist.
854	854	d. Provide at least 7 business days after a customer transaction for a
855	855	pharmacy or pharmacist to submit an appeal under this paragraph concerning a
856	856	pharmaceutical product involved in the transaction.
857	857	3. A pharmacy benefit manager that receives an appeal from or on behalf of a
858	858	pharmacy or pharmacist under this paragraph shall resolve the appeal and notify
859	859	the pharmacy or pharmacist of the pharmacy benefit manager[s determination no
860	860	later than 7 business days after the appeal is received by doing any of the following:
861	861	a. If the pharmacy benefit manager grants the relief requested in the appeal,
862	862	the pharmacy benefit manager shall make the requested change in the maximum
863	863	allowable cost; allow the pharmacy or pharmacist to reverse and rebill the relevant
864	864	claim; provide to the pharmacy or pharmacist the national drug code number
865	865	published in a directory by the federal food and drug administration on which the
866	866	increase or change is based; and make the change effective for each similarly
867	867	situated pharmacy or pharmacist subject to the maximum allowable cost list.
868	868	b. If the pharmacy benefit manager denies the relief requested in the appeal,
869	869	the pharmacy benefit manager shall provide to the pharmacy or pharmacist a
870	870	reason for the denial, the national drug code number published in a directory by the
871	871	federal food and drug administration for the pharmaceutical product to which the
872	872	claim relates, and the name of a national or regional pharmaceutical wholesaler
873	873	operating in this state that has the pharmaceutical product currently in stock at a
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898	898	JPC:cjs&skw
899	899	SECTION 19
900	900	price below the amount specified in the pharmacy benefit manager[s maximum
901	901	allowable cost list.
902	902	4. Notwithstanding subd. 3. b., a pharmacy benefit manager may not deny a
903	903	pharmacy[s or pharmacist[s appeal under this paragraph if the relief requested in
904	904	the appeal relates to the maximum allowable cost for a pharmaceutical product that
905	905	is not available for the pharmacy or pharmacist to purchase at a cost that is below
906	906	the pharmacy acquisition cost from the pharmaceutical wholesaler from which the
907	907	pharmacy or pharmacist purchases the majority of pharmaceutical products for
908	908	resale. If this subdivision applies, the pharmacy benefit manager shall revise the
909	909	maximum allowable cost list to increase the maximum allowable cost for the
910	910	pharmaceutical product to an amount equal to or greater than the pharmacy[s or
911	911	pharmacist[s pharmacy acquisition cost and allow the pharmacy or pharmacist to
912	912	reverse and rebill each claim affected by the pharmacy[s or pharmacist[s inability to
913	913	procure the pharmaceutical product at a cost that is equal to or less than the
914	914	maximum allowable cost that was the subject of the pharmacy[s or pharmacist[s
915	915	appeal.
916	916	(d) Affiliated reimbursements. A pharmacy benefit manager may not
917	917	reimburse a pharmacy or pharmacist in this state an amount less than the amount
918	918	that the pharmacy benefit manager reimburses a pharmacy benefit manager
919	919	affiliate for providing the same pharmaceutical product. The reimbursement
920	920	amount shall be calculated on a per unit basis based on the same generic product
921	921	identifier or generic code number, if applicable.
922	922	(e) Declining to dispense. A pharmacy or pharmacist may decline to provide a
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946	946	SENATE BILL 203
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948	948	JPC:cjs&skw
949	949	SECTION 19
950	950	pharmaceutical product to an individual or pharmacy benefit manager if, as a
951	951	result of the applicable maximum allowable cost list, the pharmacy or pharmacist
952	952	would be paid less than the pharmacy acquisition cost of the pharmacy or
953	953	pharmacist providing the pharmaceutical product.
954	954	SECTION 20. 632.865 (2h) of the statutes is created to read:
955	955	632.865 (2h) PROFESSIONAL DISPENSING FEES. A pharmacy benefit manager
956	956	shall pay a pharmacy or pharmacist a professional dispensing fee at a rate not less
957	957	than is paid by this state under the medical assistance program under subch. IV of
958	958	ch. 49 for each pharmaceutical product that the pharmacy or pharmacist dispenses
959	959	to an individual. The fee shall be calculated on a per unit basis based on the same
960	960	generic product identifier or generic code number, if applicable. The pharmacy
961	961	benefit manager shall pay the professional dispensing fee in addition to the amount
962	962	the pharmacy benefit manager reimburses the pharmacy or pharmacist for the cost
963	963	of the pharmaceutical product that the pharmacy or pharmacist dispenses to the
964	964	individual.
965	965	SECTION 21. 632.865 (2p) of the statutes is created to read:
966	966	632.865 (2p) PHARMACY BENEFIT MANAGER-IMPOSED FEES PROHIBITED. A
967	967	pharmacy benefit manager may not assess, charge, or collect any form of
968	968	remuneration that passes from a pharmacy or pharmacist to the pharmacy benefit
969	969	manager, including claim-processing fees, performance-based fees, network-
970	970	participation fees, or accreditation fees.
971	971	SECTION 22. 632.865 (2t) of the statutes is created to read:
972	972	632.865 (2t) FIDUCIARY DUTY AND DISCLOSURES TO HEALTH BENEFIT PLAN
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974	974	2
975	975	3
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989	989	17
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993	993	21
994	994	22
995	995	23 2025 - 2026 Legislature
996	996	SENATE BILL 203
997	997	- 22 - LRB-1278/1
998	998	JPC:cjs&skw
999	999	SECTION 22
1000	1000	SPONSORS. (a) A pharmacy benefit manager owes a fiduciary duty to the health
1001	1001	benefit plan sponsor to act according to the health benefit plan sponsor[s
1002	1002	instructions and in the best interests of the health benefit plan sponsor.
1003	1003	(b) A pharmacy benefit manager shall annually provide the health benefit
1004	1004	plan sponsor with all of the following information from the previous calendar year:
1005	1005	1. The indirect profit received by the pharmacy benefit manager from owning
1006	1006	any interest in a pharmacy or health service provider.
1007	1007	2. Any payment made by the pharmacy benefit manager to a consultant or
1008	1008	broker who works on behalf of the health benefit plan sponsor.
1009	1009	3. From the amounts received from all drug manufacturers, the amounts
1010	1010	retained by the pharmacy benefit manager, and not passed through to the health
1011	1011	benefit plan sponsor, that are related to the health benefit plan sponsor[s claims or
1012	1012	bona fide service fees.
1013	1013	4. The amounts, including pharmacy access and audit recovery fees, received
1014	1014	from all pharmacies and pharmacists that are in the pharmacy benefit manager[s
1015	1015	network or have a contract to be in the network and, from these amounts, the
1016	1016	amount retained by the pharmacy benefit manager and not passed through to the
1017	1017	health benefit plan sponsor.
1018	1018	SECTION 23. 632.865 (4) of the statutes is renumbered 632.865 (4) (a).
1019	1019	SECTION 24. 632.865 (4) (b) of the statutes is created to read:
1020	1020	632.865 (4) (b) A pharmacy benefit manager may not use any certification or
1021	1021	accreditation requirement as a determinant of pharmacy network participation
1022	1022	that is inconsistent with, more stringent than, or in addition to the federal
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1045	1045	23 2025 - 2026 Legislature
1046	1046	SENATE BILL 203
1047	1047	- 23 - LRB-1278/1
1048	1048	JPC:cjs&skw
1049	1049	SECTION 24
1050	1050	requirements for licensure as a pharmacy and the requirements for licensure as a
1051	1051	pharmacy under s. 450.06 or 450.065.
1052	1052	SECTION 25. 632.865 (4m) of the statutes is created to read:
1053	1053	632.865 (4m) PROMPT PAYMENT REQUIRED. A pharmacy benefit manager
1054	1054	shall remit payment for a claim to a pharmacy or pharmacist within 30 days from
1055	1055	the day that the claim is submitted to the pharmacy benefit manager by the
1056	1056	pharmacy or pharmacist.
1057	1057	SECTION 26. 632.865 (5) (e) of the statutes is repealed.
1058	1058	SECTION 27. 632.865 (5d) of the statutes is created to read:
1059	1059	632.865 (5d) DISCRIMINATORY REIMBURSEMENT PROHIBITED. (a) In this
1060	1060	subsection, X3rd-party payerY means an entity, other than a patient or health care
1061	1061	provider, that reimburses for and manages health care expenses.
1062	1062	(b) A pharmacy benefit manager may not do any of the following:
1063	1063	1. Refuse to reimburse a 340B covered entity or a pharmacy or pharmacist
1064	1064	contracted with a 340B covered entity for dispensing 340B drugs.
1065	1065	2. Impose requirements or restrictions on 340B covered entities or
1066	1066	pharmacies or pharmacists contracted with 340B covered entities that are not
1067	1067	imposed on other entities, pharmacies, or pharmacists.
1068	1068	3. Reimburse a 340B covered entity or a pharmacy or pharmacist contracted
1069	1069	with a 340B covered entity for a 340B drug at a rate lower than the amount paid for
1070	1070	the same drug to pharmacies or pharmacists that are not 340B covered entities or
1071	1071	pharmacies or pharmacists contracted with a 340B covered entity.
1072	1072	4. Assess a fee, charge back, or other adjustment against a 340B covered
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1095	1095	23 2025 - 2026 Legislature
1096	1096	SENATE BILL 203
1097	1097	- 24 - LRB-1278/1
1098	1098	JPC:cjs&skw
1099	1099	SECTION 27
1100	1100	entity or a pharmacy or pharmacist contracted with a 340B covered entity after a
1101	1101	claim has been paid or adjudicated.
1102	1102	5. Restrict the access of a 340B covered entity or a pharmacy or pharmacist
1103	1103	contracted with a 340B covered entity to a 3rd-party payer[s pharmacy network
1104	1104	solely because the 340B covered entity or the pharmacy or pharmacist contracted
1105	1105	with a 340B covered entity participates in the 340B drug pricing program under 42
1106	1106	USC 256b.
1107	1107	6. Require a 340B covered entity or a pharmacy or pharmacist contracted
1108	1108	with a 340B covered entity to contract with a specific pharmacy or pharmacist or
1109	1109	health benefit plan in order to access a 3rd-party payer[s pharmacy network.
1110	1110	7. Impose a restriction or an additional charge on a patient who obtains a
1111	1111	340B drug from a 340B covered entity or a pharmacy or pharmacist contracted with
1112	1112	a 340B covered entity.
1113	1113	8. Restrict the methods by which a 340B covered entity or a pharmacy or
1114	1114	pharmacist contracted with a 340B covered entity may dispense or deliver 340B
1115	1115	drugs.
1116	1116	9. Require a 340B covered entity or a pharmacy or pharmacist contracted
1117	1117	with a 340B covered entity to share pharmacy bills or invoices with a pharmacy
1118	1118	benefit manager, a 3rd-party payer, or a health benefit plan.
1119	1119	SECTION 28. 632.865 (5h) of the statutes is created to read:
1120	1120	632.865 (5h) REGULATION OF PHARMACY NETWORKS AND INDIVIDUAL CHOICE.
1121	1121	All of the following apply to a pharmacy benefit manager that sells access to
1122	1122	networks of pharmacies or pharmacists that operate in this state:
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1124	1124	2
1125	1125	3
1126	1126	4
1127	1127	5
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1129	1129	7
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1145	1145	23 2025 - 2026 Legislature
1146	1146	SENATE BILL 203
1147	1147	- 25 - LRB-1278/1
1148	1148	JPC:cjs&skw
1149	1149	SECTION 28
1150	1150	(a) The pharmacy benefit manager shall allow a participant or beneficiary of
1151	1151	a pharmacy benefits plan or program that the pharmacy benefit manager serves to
1152	1152	use any pharmacy or pharmacist in this state that is licensed to dispense the
1153	1153	pharmaceutical product that the participant or beneficiary seeks to obtain,
1154	1154	provided that the pharmacy or pharmacist accepts the same terms and conditions
1155	1155	that the pharmacy benefit manager has established for at least one of the networks
1156	1156	of pharmacies or pharmacists the pharmacy benefit manager has established to
1157	1157	serve individuals in this state.
1158	1158	(b) The pharmacy benefit manager may establish a preferred network of
1159	1159	pharmacies or pharmacists and a nonpreferred network of pharmacies or
1160	1160	pharmacists, but the pharmacy benefit manager may not prohibit a pharmacy or
1161	1161	pharmacist from participating in either type of network in this state, provided that
1162	1162	the pharmacy or pharmacist is licensed by this state and the federal government
1163	1163	and accepts the same terms and conditions that the pharmacy benefit manager has
1164	1164	established for other pharmacies or pharmacists participating in the network that
1165	1165	the pharmacy or pharmacist wants to join.
1166	1166	(c) The pharmacy benefit manager may not charge a participant or
1167	1167	beneficiary of a pharmacy benefits plan or program that the pharmacy benefit
1168	1168	manager serves a different copayment obligation or additional fee, or provide any
1169	1169	inducement or financial incentive, for the participant or beneficiary to use a
1170	1170	pharmacy or pharmacist in a particular network of pharmacies or pharmacists the
1171	1171	pharmacy benefit manager has established to serve individuals in this state.
1172	1172	SECTION 29. 632.865 (5p) of the statutes is created to read:
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1195	1195	23 2025 - 2026 Legislature
1196	1196	SENATE BILL 203
1197	1197	- 26 - LRB-1278/1
1198	1198	JPC:cjs&skw
1199	1199	SECTION 29
1200	1200	632.865 (5p) GAG CLAUSES PROHIBITED. A pharmacy benefit manager may
1201	1201	not prohibit a pharmacy or pharmacist that dispenses a pharmaceutical product
1202	1202	from, nor may a pharmacy benefit manager penalize the pharmacy or pharmacist
1203	1203	for, informing an individual about the cost of the pharmaceutical product, the
1204	1204	amount in reimbursement that the pharmacy or pharmacist receives for dispensing
1205	1205	the pharmaceutical product, the cost and clinical efficacy of a less expensive
1206	1206	alternative to the pharmaceutical product, or any difference between the cost to the
1207	1207	individual under the individual[s pharmacy benefits plan or program and the cost
1208	1208	to the individual if the individual purchases the pharmaceutical product without
1209	1209	making a claim for benefits under the individual[s pharmacy benefits plan or
1210	1210	program.
1211	1211	SECTION 30. 632.865 (5t) of the statutes is created to read:
1212	1212	632.865 (5t) EXCLUSION OF PHARMACIES PROHIBITED. No pharmacy benefit
1213	1213	manager, 3rd-party payer, or health benefit plan may exclude a pharmacy or
1214	1214	pharmacist from its network because the pharmacy or pharmacist serves less than
1215	1215	a certain portion of the population of the state or serves a population living with
1216	1216	certain health conditions.
1217	1217	SECTION 31. 632.865 (6) (bm) of the statutes is created to read:
1218	1218	632.865 (6) (bm) Requirements of audits. An entity that conducts audits of
1219	1219	pharmacists of pharmacies shall ensure all of the following:
1220	1220	1. Each pharmacist or pharmacy audited by the entity is audited under the
1221	1221	same standards and parameters as other similarly situated pharmacists or
1222	1222	pharmacies audited by the entity.
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1245	1245	23 2025 - 2026 Legislature
1246	1246	SENATE BILL 203
1247	1247	- 27 - LRB-1278/1
1248	1248	JPC:cjs&skw
1249	1249	SECTION 31
1250	1250	2. The entity randomizes the prescriptions that the entity audits and the
1251	1251	entity audits the same number of prescriptions in each prescription benefit tier.
1252	1252	3. Each audit of a prescription reimbursed under Part D of Medicare under 42
1253	1253	USC 1395w-101 et seq. is conducted separately from audits of prescriptions
1254	1254	reimbursed under other policies or plans.
1255	1255	SECTION 32. 632.865 (6) (c) 3. of the statutes is amended to read:
1256	1256	632.865 (6) (c) 3. Deliver to the pharmacist or pharmacy a final audit report,
1257	1257	which may be delivered electronically, within 90 days of the date the pharmacist or
1258	1258	pharmacy receives the preliminary report or the date of the final appeal of the
1259	1259	audit, whichever is later. The final audit report under this subdivision shall
1260	1260	include specific documentation of any alleged errors and shall include any response
1261	1261	provided to the auditor by the pharmacy or pharmacist and consider and address
1262	1262	the pharmacy[s or pharmacist[s response.
1263	1263	SECTION 33. 632.865 (6) (c) 3m. of the statutes is created to read:
1264	1264	632.865 (6) (c) 3m. If the entity delivers to the pharmacist or pharmacy a
1265	1265	preliminary report of the audit or final audit report that references a billing code,
1266	1266	drug code, or other code associated with audits, provide an electronic link to a plain
1267	1267	language explanation of the code.
1268	1268	SECTION 34. 632.865 (6g) of the statutes is created to read:
1269	1269	632.865 (6g) RECOUPMENT. (a) No pharmacy benefit manager may recoup
1270	1270	any reimbursement made to a pharmacist or pharmacy for errors that have no
1271	1271	actual financial harm to an enrollee or a policy or plan sponsor unless the error is
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1293	1293	22 2025 - 2026 Legislature
1294	1294	SENATE BILL 203
1295	1295	- 28 - LRB-1278/1
1296	1296	JPC:cjs&skw
1297	1297	SECTION 34
1298	1298	the result of the pharmacist or pharmacy failing to comply with a formal corrective
1299	1299	action plan.
1300	1300	(b) No pharmacy benefit manager may use extrapolation in calculating
1301	1301	reimbursements that it may recoup. The finding of errors for which reimbursement
1302	1302	will be recouped shall be based on an actual error in reimbursement and not on a
1303	1303	projection of the number of patients served having a similar diagnosis or on a
1304	1304	projection of the number of similar orders or refills for similar prescription drugs.
1305	1305	(c) A pharmacy benefit manager that recoups any reimbursement made to a
1306	1306	pharmacist or pharmacy for an error that was the cause of financial harm shall
1307	1307	return the recouped reimbursement to the enrollee or the policy or plan sponsor
1308	1308	who was harmed by the error.
1309	1309	SECTION 35. 632.865 (6r) of the statutes is created to read:
1310	1310	632.865 (6r) QUALITY PROGRAMS. No pharmacy benefit manager may base
1311	1311	any criteria of a quality program in a contract between a pharmacy and a pharmacy
1312	1312	benefit manager on a factor for which the pharmacy does not have complete and
1313	1313	exclusive control.
1314	1314	SECTION 36. 632.865 (8) of the statutes is created to read:
1315	1315	632.865 (8) RETALIATION PROHIBITED. (a) In this subsection, XretaliateY
1316	1316	includes any of the following actions taken by a pharmacy benefit manager:
1317	1317	1. Terminating or refusing to renew a contract with a pharmacy or
1318	1318	pharmacist.
1319	1319	2. Subjecting a pharmacy or pharmacist to increased audits.
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1341	1341	22 2025 - 2026 Legislature
1342	1342	SENATE BILL 203
1343	1343	- 29 - LRB-1278/1
1344	1344	JPC:cjs&skw
1345	1345	SECTION 36
1346	1346	3. Failing to promptly pay a pharmacy or pharmacist any money the
1347	1347	pharmacy benefit manager owes to the pharmacy or pharmacist.
1348	1348	(b) A pharmacy benefit manager may not retaliate against a pharmacy or
1349	1349	pharmacist for reporting an alleged violation of this section or for exercising a right
1350	1350	or remedy under this section.
1351	1351	(c) In addition to any other remedies provided by law, a pharmacy or
1352	1352	pharmacist may bring an action in court for injunctive relief based on a violation of
1353	1353	par. (b). In addition to equitable relief, the court may, notwithstanding s. 814.04 (1),
1354	1354	award a pharmacy or pharmacist that prevails in such an action reasonable
1355	1355	attorney fees and costs in prosecuting the action.
1356	1356	SECTION 37. Initial applicability.
1357	1357	(1) AFFILIATED REIMBURSEMENTS . Except as provided in sub. (4), the
1358	1358	treatment of s. 632.865 (2d) (d) first applies to a reimbursement amount paid for on
1359	1359	a claim for reimbursement submitted on the effective date of this subsection.
1360	1360	(2) PROFESSIONAL DISPENSING FEES. Except as provided in sub. (4), the
1361	1361	treatment of s. 632.865 (2h) first applies to a pharmaceutical product that is
1362	1362	dispensed on the effective date of this subsection.
1363	1363	(3) PHARMACY BENEFIT MANAGER-IMPOSED FEES. Except as provided in sub.
1364	1364	(4), the treatment of s. 632.865 (2p) first applies to remuneration collected by a
1365	1365	pharmacy benefit manager on the effective date of this subsection.
1366	1366	(4) CONTRACTS. For a pharmacy benefit manager providing pharmacy benefit
1367	1367	manager services under a contract that contains any provision inconsistent with
1368	1368	the treatment of s. 632.861 (1m), (3g), (3r), or (4) (a) or (e) or 632.865 (1) (ab), (ac),
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1391	1391	23 2025 - 2026 Legislature
1392	1392	SENATE BILL 203
1393	1393	- 30 - LRB-1278/1
1394	1394	JPC:cjs&skw
1395	1395	SECTION 37
1396	1396	(ae), (an), (aq), (at), (bm), (cg), or (cr), (2), (2d), (2h), (2p), (2t), (4m), (5) (e), (5d), (5h),
1397	1397	(5p), (5t), (6) (bm) or (c) 3. or 3m., (6g), (6r), or (8), the renumbering of s. 632.865 (4),
1398	1398	or the creation of s. 632.865 (4) (b), the treatment of s. 632.861 (1m), (3g), (3r), or (4)
1399	1399	(a) or (e) or 632.865 (1) (ab), (ac), (ae), (an), (aq), (at), (bm), (cg), or (cr), (2), (2d), (2h),
1400	1400	(2p), (2t), (4m), (5) (e), (5d), (5h), (5p), (5t), (6) (bm) or (c) 3. or 3m., (6g), (6r), or (8),
1401	1401	the renumbering of s. 632.865 (4), or the creation of s. 632.865 (4) (b), as applicable,
1402	1402	first applies to the pharmacy benefit manager with respect to the pharmacy benefit
1403	1403	manager services provided under the contract on the day on which the contract
1404	1404	expires or is extended, modified, or renewed, whichever occurs first.
1405	1405	(5) APPLICATION OF PRESCRIPTION DRUG PAYMENTS.
1406	1406	(a) For policies and plans containing provisions inconsistent with the
1407	1407	treatment of s. 632.862, that treatment first applies to policy or plan years
1408	1408	beginning on January 1 of the year following the year in which this paragraph takes
1409	1409	effect, except as provided in par. (b).
1410	1410	(b) For policies or plans that are affected by a collective bargaining agreement
1411	1411	containing provisions inconsistent with the treatment of s. 632.862, that treatment
1412	1412	first applies to policy or plan years beginning on the effective date of this paragraph
1413	1413	or on the day on which the collective bargaining agreement is newly established,
1414	1414	extended, modified, or renewed, whichever is later.
1415	1415	SECTION 38. Effective dates. This act takes effect on the day after
1416	1416	publication, except as follows:
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1437	1437	21 2025 - 2026 Legislature
1438	1438	SENATE BILL 203
1439	1439	- 31 - LRB-1278/1
1440	1440	JPC:cjs&skw
1441	1441	SECTION 38
1442	1442	(1) APPLICATION OF PRESCRIPTION DRUG PAYMENTS. The treatment of s.
1443	1443	632.862 takes effect on the first day of the 4th month beginning after publication.
1444	1444	(END)
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