Senate passes bill to license and limit PBM practices, banning spread pricing and adding fees

The Senate on the floor took up and passed H233, an act to license and regulate pharmacy benefit managers (PBMs), after extended debate and adoption of committee amendments. The bill creates a new statutory chapter on PBMs, requires PBMs to file advertising materials with the Department of Financial Regulation (DFR) for approval, and sets licensure fees: a $1,600 application fee, a $10,000 initial licensure fee and a $12,000 annual renewal fee. The bill bans spread pricing and curbs copay‑accelerator practices that inflate patient out‑of‑pocket costs.

Supporters said the bill is intended to open a ‘‘black box’’ in drug pricing and protect local independent pharmacies. The Senate Health and Welfare committee reporter described how PBMs gained market power, retain rebates, and sometimes own pharmacies, which can squeeze community pharmacies. The bill directs DFR to adopt rules, creates three regulator positions (one attorney and two investigators), and includes an appropriation for FY2025 to staff oversight functions.

An amendment narrows the Office of the Health Care Advocate’s (HCA) access to DFR investigatory materials to protect proprietary information while still allowing the HCA to review final examination reports and related documents. Supporters said that compromise preserves consumer oversight while addressing DFR’s confidentiality concerns. Opponents questioned whether licensure fees would be passed on to consumers and pressed for evidence of guaranteed end‑user savings. Committee members and other senators said the bill is a first step toward transparency and long‑term savings, and that enforcement and reporting will be crucial.

The Senate adopted committee reports and ordered 3rd reading; the body later passed H233. The bill’s effective date and phased applicability are included in the text, and PBMs operating in the state by January 1, 2025, would have 12 months to comply with licensure requirements.

The Senate vote adopting the committee report and final passage were announced on the floor; the bill moves to the House for concurrence on conference items as required by legislative process.