Shown verbatim: the complete text as captured from the official PDF posted by the Indiana General Assembly, fetched 2026-09-25. Page and line markers are part of the official record; nothing is edited or removed. This is the current version. The official bill page.
First Regular Session of the 124th General Assembly (2025)
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between statutes enacted by the 2024 Regular Session of the General Assembly.
SENATE ENROLLED ACT No. 140
AN ACT to amend the Indiana Code concerning insurance.
Be it enacted by the General Assembly of the State of Indiana:
SECTION 1. IC 27-1-24.2 IS ADDED TO THE INDIANA CODE
AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE
JANUARY 1, 2026]:
Chapter 24.2. Pharmacy Benefits
Sec. 1. (a) This chapter applies to a policy or contract that is
issued, delivered, entered into, renewed, or amended after
December 31, 2025.
(b) This chapter does not apply to the following:
(1) Medicaid or a managed care organization (as defined in
IC 12-7-2-126.9).
(2) Except as provided in section 18 of this chapter, a state
employee health plan (as defined in IC 5-10-8-6.7).
Sec. 1.5. As used in this chapter, "actual acquisition cost" means
the purchase price of a drug paid by a pharmacy net of all
discounts, rebates, chargebacks, and other adjustments to the price
of the drug. The term does not include professional fees.
Sec. 2. As used in this chapter, "actual overpayment" means the
portion of any amount paid for pharmacy or pharmacist services
that:
(1) is duplicative because the pharmacy or pharmacist has
already been paid for the services; or
(2) was erroneously paid because the services were not
rendered in accordance with the prescriber's order, in which
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case only the amount paid for the portion of the prescription
that was filled incorrectly or in excess of the prescriber's
order is deemed an actual overpayment.
Sec. 3. As used in this chapter, "common control" includes:
(1) sharing common management or managers; and
(2) having common members on boards of directors.
Sec. 4. As used in this chapter, "cost sharing" means the cost to
an insured under a health plan according to any coverage limit,
copayment, coinsurance, deductible, or other out-of-pocket expense
requirements imposed by the health plan.
Sec. 5. (a) As used in this chapter, "health plan" means the
following:
(1) A policy of accident and sickness insurance (as defined in
IC 27-8-5-1). However, the term does not include the
coverages described in IC 27-8-5-2.5(a).
(2) An individual contract (as defined in IC 27-13-1-21) or a
group contract (as defined in IC 27-13-1-16) that provides
coverage for basic health care services (as defined in
IC 27-13-1-4).
(3) Any other plan or program that provides payment,
reimbursement, or indemnification to a covered individual for
the cost of prescription drugs.
(b) The term does not include the following:
(1) A self-insured health plan provided by a hospital or health
system to its employees and dependents of employees if the
hospital or health system owns a pharmacy.
(2) A prescription drug plan established under Medicare Part
D.
Sec. 6. As used in this chapter, "insured" means an individual
covered under a health plan.
Sec. 7. As used in this chapter, "insurer" means any of the
following that offer or issue a health plan:
(1) An insurance company.
(2) A health maintenance organization.
(3) A limited health service organization.
(4) A self-insurer, including a governmental plan, church
plan, or multiple employer welfare arrangement.
(5) A provider sponsored integrated health delivery network.
(6) A self-insured employer organized association.
(7) A nonprofit hospital, medical-surgical, dental, and health
service corporation.
(8) Any other third party payor that is:
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(A) authorized to transact health insurance business in
Indiana; or
(B) not exempt by federal law from regulation under the
insurance laws of Indiana.
Sec. 8. As used in this chapter, "national drug code number"
means the unique national drug code number that identifies:
(1) a specific approved drug;
(2) the manufacturer of the drug; and
(3) the package presentation of the drug.
Sec. 9. As used in this chapter, "net amount" means the amount
paid to a pharmacy or pharmacist by the insurer, pharmacy
benefit manager, or other administrator minus:
(1) any fees;
(2) any price concessions; and
(3) all other revenue;
passing from the pharmacy or pharmacist to the insurer,
pharmacy benefit manager, or other administrator.
Sec. 10. As used in this chapter, "pharmacy" has the meaning
set forth in IC 25-26-13-2.
Sec. 11. As used in this chapter, "pharmacy affiliate" means a
pharmacy, including a specialty pharmacy, that directly or
indirectly, through one (1) or more intermediaries:
(1) owns or controls;
(2) is owned or controlled by; or
(3) is under common ownership or common control with;
an insurer, a pharmacy benefit manager, or other administrator of
pharmacy benefits.
Sec. 12. As used in this chapter, "pharmacy benefit manager"
has the meaning set forth in IC 27-1-24.5-12.
Sec. 13. (a) As used in this chapter, "pharmacy or pharmacist
services" means any:
(1) health care procedures or treatments within the scope of
practice of a pharmacist; or
(2) services provided by a pharmacy or pharmacist.
(b) The term includes the sale and provision of the following by
a pharmacy or pharmacist:
(1) Prescription drugs.
(2) Home medical equipment (as defined in IC 25-26-21-2).
Sec. 14. (a) An insurer, a pharmacy benefit manager, or any
other administrator of pharmacy benefits that utilizes a network
to provide pharmacy or pharmacist services under a health plan
shall ensure that the network is reasonably adequate and accessible
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with respect to the provision of pharmacy or pharmacist services.
(b) A reasonably adequate and accessible network with respect
to the provision of pharmacy or pharmacist services must, at a
minimum:
(1) offer an adequate number of accessible pharmacies that
are not mail order pharmacies; and
(2) provide convenient access to pharmacies that are not mail
order pharmacies within a reasonable distance of not more
than thirty (30) miles from each insured's residence, to the
extent that pharmacy or pharmacist services are available.
(c) An insurer, a pharmacy benefit manager, and any other
administrator of pharmacy benefits shall file an annual report with
the commissioner in a manner and form prescribed by the
commissioner. The annual report must describe the networks of
the insurer, pharmacy benefit manager, or other administrator
that are utilized for the provision of pharmacy or pharmacist
services under a health plan.
(d) The commissioner shall review each network reported under
subsection (c) to ensure that the network complies with this section.
(e) All information and data acquired by the department under
this section that is generally recognized as confidential or
proprietary is confidential for the purposes of IC 5-14-3-4 and may
not be disclosed by the department. However, the department may
publicly disclose aggregated information that is not descriptive of
any readily identifiable person or entity.
Sec. 15. (a) A contract between a pharmacy or pharmacist and
an insurer, a pharmacy benefit manager, or any other
administrator of pharmacy benefits for the provision of pharmacy
or pharmacist services under a health plan, either directly or
through a pharmacy services administrative organization or group
purchasing organization, must include provisions that do the
following:
(1) Outline the terms and conditions for the provision of
pharmacy or pharmacist services.
(2) Subject to subsection (b), prohibit the insurer, pharmacy
benefit manager, or other administrator from retroactively
denying, reducing reimbursement for, or seeking any refunds
or recoupments for a claim for pharmacy or pharmacist
services, in whole or in part, from the pharmacy or
pharmacist after returning a paid claim response as part of
the adjudication of the claim, including claims for the cost of
a medication or dispensed product and claims for pharmacy
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or pharmacist services that are deemed ineligible for
coverage, unless:
(A) the original claim was submitted fraudulently; or
(B) the pharmacy or pharmacist received an actual
overpayment.
(3) Prohibit the insurer, pharmacy benefit manager, or other
administrator from reimbursing the pharmacy or pharmacist
for a prescription drug or other service at a net amount that
is less than the greater of the following:
(A) The amount the insurer, pharmacy benefit manager, or
other administrator reimburses itself or a pharmacy
affiliate for the same prescription drug by national drug
code number or service.
(B) The following amount, as applicable:
(i) If the prescription drug or service is administered,
dispensed, or provided at a pharmacy that is a licensed
premises (as defined in IC 7.1-1-3-20), the actual
acquisition cost for the prescription drug or service plus
a fair and reasonable dispensing fee.
(ii) If the prescription drug or service is administered,
dispensed, or provided at a pharmacy not described in
item (i), the national average drug acquisition cost
(NADAC) for the prescription drug or service, as
determined by the federal Centers for Medicare and
Medicaid Services at the time the prescription drug or
service is administered, dispensed, or provided plus a
professional dispensing fee equal to the Medicaid fee for
service dispensing fee under 405 IAC 5-24-6.
(b) An insurer, a pharmacy benefit manager, or any other
administrator of pharmacy benefits may not request a refund or
make a recoupment of a dispensing fee paid to the pharmacy if the
correct medication was dispensed to the patient.
Sec. 16. (a) Except as provided in section 15 of this chapter, with
respect to the provision of pharmacy or pharmacist services under
a health plan, an insurer, a pharmacy benefit manager, or any
other administrator of pharmacy benefits may not:
(1) prohibit a pharmacy or pharmacist from, or impose a
penalty on a pharmacy or pharmacist for:
(A) selling a lower cost alternative to an insured, if a lower
cost alternative is available; or
(B) providing information to an insured under subsection
(c);
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(2) discriminate against any pharmacy or pharmacist that is:
(A) located within the geographic coverage area of the
health plan; and
(B) willing to agree to, or accept, terms and conditions
established for participation in the insurer's, pharmacy
benefit manager's, other administrator's, or health plan's
network;
(3) impose limits, including quantity limits or refill frequency
limits, on an insured's access to medication from a pharmacy
that are more restrictive than those existing for a pharmacy
affiliate;
(4) except as provided in subsection (b), require an insured to
receive pharmacy or pharmacist services from a pharmacy
affiliate, including:
(A) requiring an insured to obtain a specialty drug from a
pharmacy affiliate; and
(B) charging less cost sharing to insureds that use
pharmacy affiliates than what is charged to insureds that
use nonaffiliated pharmacies;
(5) require a pharmacy or pharmacist to enter into an
additional contract with an affiliate of the insurer, pharmacy
benefit manager, or other administrator of pharmacy benefits
as a condition of entering into a contract with this insurer,
pharmacy benefit manager, or administrator; or
(6) require a pharmacy or pharmacist to, as a condition of a
contract, agree to payment rates for any affiliate of the
insurer, pharmacy benefit manager, or other administrator of
pharmacy benefits that is not a party to the contract.
(b) Subsection (a)(4):
(1) does not apply to a mail order pharmacy; and
(2) may not be construed to prohibit:
(A) communications to insureds regarding networks and
prices if the communication is accurate and includes
information about all eligible nonaffiliated pharmacies; or
(B) an insurer, a pharmacy benefit manager, or any other
administrator of pharmacy benefits from providing
financial incentives for utilizing the network, if the insurer,
pharmacy benefit manager, or other administrator
complies with this section and section 14 of this chapter.
(c) A pharmacist shall have the right to provide an insured with
information regarding lower cost alternatives to assist the insured
in making informed decisions.
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Sec. 17. (a) Any insured, pharmacy, or pharmacist impacted by
an alleged violation of this chapter may file a complaint with the
commissioner.
(b) The commissioner shall:
(1) review and investigate all complaints filed under this
section; and
(2) issue, in writing, a determination to the insured,
pharmacy, or pharmacist as to whether a violation occurred.
(c) An insurer, a pharmacy benefit manager, or any other
administrator of pharmacy benefits shall:
(1) respond to; and
(2) comply with;
any requests made by the commissioner under this section.
Sec. 18. (a) This section applies to a state employee health plan
(as defined in IC 5-10-8-6.7). If a pharmacy benefit manager is
used with regard to a state employee health plan, the state
personnel department shall either:
(1) create a pharmacy benefit manager within the state
personnel department; or
(2) contract with an insurer, a pharmacy benefit manager, or
any other administrator of pharmacy benefits.
(b) All data collected by a contractor while administering a
contract under subsection (a)(2) is the property of the state.
Sec. 19. (a) As used in this section, "plan sponsor" means an
employer or organization that:
(1) has more than one hundred (100) employees or members;
and
(2) offers health insurance coverage to its employees or
members through a self-funded health benefit plan.
(b) A third party administrator may not:
(1) require, as a condition of a plan sponsor entering into a
contract with the third party administrator, that the plan
sponsor enter into a contract with a particular pharmacy
benefit manager; or
(2) charge a different fee for services provided by the third
party administrator to a plan sponsor based on the plan
sponsor's selection of a particular pharmacy benefit manager.
Sec. 20. In addition to any other remedies, penalties, or damages
available under common law or statute, the commissioner may
order reimbursement to any person who has incurred a monetary
loss as a result of a violation of this chapter.
Sec. 21. This chapter applies to the extent that it is not in conflict
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with federal law.
SECTION 2. [EFFECTIVE UPON PASSAGE] (a) The
legislative council is urged to assign to the appropriate study
committee during the 2025 legislative interim the task of studying
the topic of contracts for pharmacy benefit coverage under:
(1) the Medicaid program under IC 12-15; and
(2) a state employee health plan (as defined in IC 5-10-8-6.7).
(b) If the topic is assigned to a study committee under subsection
(a), the study committee shall issue a final report to the legislative
council containing the study committee's findings and
recommendations, including any recommended legislation
concerning the topic, not later than November 1, 2025.
(c) This SECTION expires December 31, 2025.
SECTION 3. An emergency is declared for this act.
SEA 140 — CC 1
President of the Senate
President Pro Tempore
Speaker of the House of Representatives
Governor of the State of Indiana
Date: Time:
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