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1 STATE OF OKLAHOMA
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2 1st Session of the 60th Legislature (2025)
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3 SENATE BILL 773 By: Gollihare
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6 AS INTRODUCED
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7 An Act relating to pharmacy benefit managers;
7 amending 36 O.S. 2021, Sections 6960, as last amended
8 by Section 1, Chapter 306, O.S.L. 2024, 6962, as last
8 amended by Section 2, Chapter 306, O.S.L. 2024, and
9 6965, as last amended by Section 3, Chapter 306,
9 O.S.L. 2024 (36 O.S. Supp. 2024, Sections 6960, 6962,
10 and 6965), which relate to definitions, compliance
10 review, and power and authority to investigate,
11 examine, and enforce; modifying definitions;
11 prohibiting certain circumstances; requiring
12 nonpayment under providing venue for certain court
12 proceeding; allowing Attorney General to obtain
13 certain information; extending certain duties; and
13 providing an effective date.
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16 BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
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17 SECTION 1. AMENDATORY 36 O.S. 2021, Section 6960, as
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18 last amended by Section 1, Chapter 306, O.S.L. 2024 (36 O.S. Supp.
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19 2024, Section 6960), is amended to read as follows:
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20 Section 6960. A. For purposes of the Patient's Right to
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21 Pharmacy Choice Act:
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22 1. "Covered entity" means a nonprofit hospital or medical
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23 service organization, for-profit hospital or medical service
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24 organization, insurer, health benefit plan, health maintenance
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1 organization, health program administered by the state in the
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2 capacity of providing health coverage, or an employer, labor union,
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3 or other group of persons that provides health coverage to persons
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4 in this state. This term does not include a health plan that
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5 provides coverage only for accidental injury, specified disease,
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6 hospital indemnity, disability income, or other limited benefit
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7 health insurance policies and contracts that do not include
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8 prescription drug coverage;
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9 2. "Health insurer" means any corporation, association, benefit
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10 society, exchange, partnership or individual licensed by the
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11 Oklahoma Insurance Code;
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12 3. "Health insurer payor" means a health insurance company,
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13 health maintenance organization, union, hospital and medical
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14 services organization or any entity providing or administering a
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15 self-funded health benefit plan;
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16 4. "Mail-order pharmacy" means a pharmacy licensed by this
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17 state that primarily dispenses and delivers covered drugs via common
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18 carrier;
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19 5. "Pharmacy benefits manager" or "PBM" means a person,
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20 business, or other entity that performs pharmacy benefits
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21 management. The term shall include a person or entity acting on
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22 behalf of a PBM in a contractual or employment relationship in the
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23 performance of pharmacy benefits management for a managed care
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24 company, nonprofit hospital, medical service organization, insurance
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1 company, third-party payor or a health program administered by a
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2 department of this state;
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3 6. "Pharmacy benefits management" means a service provided to
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4 covered entities to facilitate the provisions of prescription drug
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5 benefits to covered individuals within the state, including, but not
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6 limited to, negotiating pricing and other terms with drug
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7 manufacturers and providers. Pharmacy benefits management may
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8 include any or all of the following services:
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9 a. claims processing, retail network management, and
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10 payment of claims to pharmacies for prescription drugs
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11 dispensed to covered individuals,
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12 b. administration or management of pharmacy discount
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13 cards or programs,
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14 c. clinical formulary development and management
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15 services, or
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16 d. c. rebate contracting and administration;
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17 7. "Provider" means a pharmacy, as defined in Section 353.1 of
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18 Title 59 of the Oklahoma Statutes or an agent or representative of a
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19 pharmacy;
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20 8. "Retail pharmacy network" means retail pharmacy providers
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21 contracted with a PBM in which the pharmacy primarily fills and
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22 sells prescriptions via a retail, storefront location;
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1 9. "Rural service area" means a five-digit ZIP code in which
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2 the population density is less than one thousand (1,000) individuals
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3 per square mile;
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4 10. "Spread pricing" means a prescription drug pricing model
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5 utilized by a pharmacy benefits manager in which the PBM charges a
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6 health benefit plan a contracted price for prescription drugs that
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7 differs from the amount the PBM directly or indirectly pays the
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8 pharmacy or pharmacist for providing pharmacy services;
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9 11. "Suburban service area" means a five-digit ZIP code in
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10 which the population density is between one thousand (1,000) and
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11 three thousand (3,000) individuals per square mile; and
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12 12. "Urban service area" means a five-digit ZIP code in which
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13 the population density is greater than three thousand (3,000)
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14 individuals per square mile.
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15 B. Nothing in the definitions of pharmacy benefits manager or
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16 pharmacy benefits management as such terms are defined in the
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17 Patient's Right to Pharmacy Choice Act, the Pharmacy Audit Integrity
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18 Act, or Sections 357 through 360 of Title 59 of the Oklahoma
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19 Statutes shall be construed to deem the following entities to be a
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20 pharmacy benefits manager:
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21 1. An employer of its own self-funded health benefit plan,
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22 except, to the extent permitted by applicable law, where the
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23 employer without the utilization of a third party and unrelated to
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24 the employer's own pharmacy:
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1 a. negotiates directly with drug manufacturers,
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2 b. processes claims on behalf of its members, or
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3 c. manages its own retail network of pharmacies; or
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4 2. A pharmacy that provides a patient with a discount card or
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5 program that is for exclusive use at the pharmacy offering the
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6 discount.
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7 SECTION 2. AMENDATORY 36 O.S. 2021, Section 6962, as
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8 last amended by Section 2, Chapter 306, O.S.L. 2024 (36 O.S. Supp.
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9 2024, Section 6962), is amended to read as follows:
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10 Section 6962. A. The Attorney General shall review and approve
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11 retail pharmacy network access for all pharmacy benefits managers
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12 (PBMs) to ensure compliance with Section 6961 of this title.
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13 B. A PBM, or an agent of a PBM, shall not:
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14 1. Cause or knowingly permit the use of advertisement,
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15 promotion, solicitation, representation, proposal or offer that is
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16 untrue, deceptive or misleading;
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17 2. Charge a pharmacist or pharmacy a fee related to the
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18 adjudication of a claim including without limitation a fee for:
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19 a. the submission of a claim,
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20 b. enrollment or participation in a retail pharmacy
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21 network, or
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22 c. the development or management of claims processing
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23 services or claims payment services related to
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24 participation in a retail pharmacy network;
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1 3. Reimburse a pharmacy or pharmacist in the state an amount
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2 less than the amount that the PBM reimburses a pharmacy owned by or
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3 under common ownership with a PBM for providing the same covered
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4 services. The reimbursement amount paid to the pharmacy shall be
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5 equal to the reimbursement amount calculated on a per-unit basis
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6 using the same generic product identifier or generic code number
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7 paid to the PBM-owned or PBM-affiliated pharmacy;
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8 4. Deny a provider the opportunity to participate in any
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9 pharmacy network at preferred participation status if the provider
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10 is willing to accept the terms and conditions that the PBM has
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11 established for other providers as a condition of preferred network
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12 participation status;
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13 5. Deny, limit or terminate a provider's contract based on
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14 employment status of any employee who has an active license to
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15 dispense, despite probation status, with the State Board of
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16 Pharmacy;
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17 6. Retroactively deny or reduce reimbursement for a covered
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18 service claim after returning a paid claim response as part of the
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19 adjudication of the claim, unless:
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20 a. the original claim was submitted fraudulently, or
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21 b. to correct errors identified in an audit, so long as
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22 the audit was conducted in compliance with Sections
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23 356.2 and 356.3 of Title 59 of the Oklahoma Statutes;
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1 7. Fail to make any payment due to a pharmacy or pharmacist for
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2 covered services properly rendered in the event a PBM terminates a
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3 provider from a pharmacy benefits manager network;
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4 8. Fail to make any payment due to a pharmacy or pharmacist for
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5 covered services properly rendered in the event a PBM terminates its
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6 contract with a plan sponsor or insurer;
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7 9. Conduct or practice spread pricing, as defined in Section
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8 6960 of this title, in this state; or
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9 9. 10. Charge a pharmacist or pharmacy a fee related to
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10 participation in a retail pharmacy network including but not limited
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11 to the following:
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12 a. an application fee,
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13 b. an enrollment or participation fee,
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14 c. a credentialing or re-credentialing fee,
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15 d. a change of ownership fee, or
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16 e. a fee for the development or management of claims
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17 processing services or claims payment services.
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18 C. The prohibitions under this section shall apply to contracts
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19 between pharmacy benefits managers and providers for participation
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20 in retail pharmacy networks.
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21 1. A PBM contract shall:
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22 a. not restrict, directly or indirectly, any pharmacy
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23 that dispenses a prescription drug from informing, or
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24 penalize such pharmacy for informing, an individual of
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1 any differential between the individual's out-of-
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2 pocket cost or coverage with respect to acquisition of
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3 the drug and the amount an individual would pay to
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4 purchase the drug directly, and
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5 b. ensure that any entity that provides pharmacy benefits
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6 management services under a contract with any such
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7 health plan or health insurance coverage does not,
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8 with respect to such plan or coverage, restrict,
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9 directly or indirectly, a pharmacy that dispenses a
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10 prescription drug from informing, or penalize such
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11 pharmacy for informing, a covered individual of any
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12 differential between the individual's out-of-pocket
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13 cost under the plan or coverage with respect to
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14 acquisition of the drug and the amount an individual
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15 would pay for acquisition of the drug without using
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16 any health plan or health insurance coverage.
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17 2. A pharmacy benefits manager's contract with a provider shall
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18 not prohibit, restrict, or limit disclosure of information or
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19 documents to the Attorney General, law enforcement or state and
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20 federal governmental officials investigating or examining a
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21 complaint or conducting a review of a pharmacy benefits manager's
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22 compliance with the requirements under the Patient's Right to
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23 Pharmacy Choice Act, the Pharmacy Audit Integrity Act, and Sections
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24 357 through 360 of Title 59 of the Oklahoma Statutes.
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1 D. A pharmacy benefits manager shall:
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2 1. Establish and maintain an electronic claim inquiry
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3 processing system using the National Council for Prescription Drug
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4 Programs' current standards to communicate information to pharmacies
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5 submitting claim inquiries;
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6 2. Fully disclose to insurers, self-funded employers, unions or
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7 other PBM clients the existence of the respective aggregate
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8 prescription drug discounts, rebates received from drug
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9 manufacturers and pharmacy audit recoupments;
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10 3. Provide the Attorney General, insurers, self-funded employer
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11 plans and unions unrestricted audit rights of and access to the
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12 respective PBM pharmaceutical manufacturer and provider contracts,
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13 plan utilization data, plan pricing data, pharmacy utilization data
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14 and pharmacy pricing data;
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15 4. Maintain, for no less than three (3) years, documentation of
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16 all network development activities including but not limited to
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17 contract negotiations and any denials to providers to join networks.
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18 This documentation shall be made available to the Attorney General
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19 upon request; and
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20 5. Report to the Attorney General, on a quarterly basis for
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21 each health insurer payor, on the following information:
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22 a. the aggregate amount of rebates received by the PBM,
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23 b. the aggregate amount of rebates distributed to the
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24 appropriate health insurer payor,
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1 c. the aggregate amount of rebates passed on to the
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2 enrollees of each health insurer payor at the point of
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3 sale that reduced the applicable deductible,
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4 copayment, coinsure or other cost sharing amount of
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5 the enrollee,
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6 d. the individual and aggregate amount paid by the health
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7 insurer payor to the PBM for pharmacy services
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8 itemized by pharmacy, drug product and service
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9 provided, and
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10 e. the individual and aggregate amount a PBM paid a
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11 provider for pharmacy services itemized by pharmacy,
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12 drug product and service provided.
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13 E. Nothing in the Patient's Right to Pharmacy Choice Act shall
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14 prohibit the Attorney General from requesting and obtaining detailed
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15 data, including raw data, in response to the information provided by
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16 a PBM in the quarterly reports required by this section. The
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17 Attorney General may alter the frequency of the reports required by
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18 this section at his or her sole discretion.
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19 F. The Attorney General may promulgate rules to implement the
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20 provisions of the Patient's Right to Pharmacy Choice Act, the
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21 Pharmacy Audit Integrity Act, and Sections 357 through 360 of Title
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22 59 of the Oklahoma Statutes.
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1 SECTION 3. AMENDATORY 36 O.S. 2021, Section 6965, as
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2 last amended by Section 3, Chapter 306, O.S.L. 2024 (36 O.S. Supp.
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3 2024, Section 6965), is amended to read as follows:
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4 Section 6965. A. The Attorney General shall have power and
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5 authority to examine and investigate the affairs of every pharmacy
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6 benefits manager (PBM) engaged in pharmacy benefits management in
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7 this state in order to determine whether such entity is in
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8 compliance with the Patient's Right to Pharmacy Choice Act, the
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9 Pharmacy Audit Integrity Act, and Sections 357 through 360 of Title
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10 59 of the Oklahoma Statutes.
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11 B. The Attorney General shall have the power and authority to
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12 subpoena witnesses and records, whether prior to or during an
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13 investigation or prosecution of a complaint, from any relevant
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14 entity or persons to ensure compliance with the Patient's Right to
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15 Pharmacy Choice Act, the Pharmacy Audit Integrity Act, and Sections
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16 357 through 360 of Title 59 of the Oklahoma Statutes.
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17 C. All PBM files and records shall be subject to examination by
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18 the Attorney General or by duly appointed designees. The Attorney
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19 General, authorized employees and examiners shall have access to any
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20 of a PBM's files and records that may relate to a particular
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21 complaint under investigation or to an inquiry or examination by the
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22 Attorney General.
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23 D. Every officer, director, employee or agent of the PBM, upon
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24 receipt of any inquiry from the Attorney General, shall, within
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1 twenty (20) days from the date the inquiry is sent, furnish the
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2 Attorney General with an adequate response to the inquiry.
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3 E. When making an examination under this section, the Attorney
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4 General may retain subject matter experts, attorneys, appraisers,
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5 independent actuaries, independent certified public accountants or
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6 an accounting firm or individual holding a permit to practice public
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7 accounting, certified financial examiners or other professionals and
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8 specialists as examiners, the cost of which shall be borne by the
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9 PBM that is the subject of the examination.
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10 F. 1. Protected health information (PHI) held by a PBM shall
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11 be provided at the request of the Attorney General for the purpose
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12 of conducting investigations into potential violations of state laws
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13 and regulations related to the PBM. Disclosure of protected health
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14 information shall be limited to the extent necessary for the
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15 investigation and enforcement of state law.
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16 2. All disclosures of protected health information shall be
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17 made in compliance with all applicable federal and state privacy
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18 laws, including the Health Insurance Portability and Accountability
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19 Act of 1996 (HIPAA), and other relevant laws protecting the privacy
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20 and confidentiality of health information.
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21 3. Any protected health information obtained for an
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22 investigation shall be handled and maintained per applicable federal
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23 and state privacy laws and regulations, including HIPAA.
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1 4. Unauthorized disclosure of protected health information
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2 obtained during an investigation is strictly prohibited and subject
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3 to legal penalties.
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4 G. 1. If the Attorney General, after notice and opportunity
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5 for hearing, finds that any PBM operating within this state has not
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6 fully cooperated with an investigation or inquiry conducted by the
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7 Attorney General related to compliance with the Patient's Right to
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8 Pharmacy Choice Act, the Pharmacy Audit Integrity Act, and Sections
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9 357 through 360 of Title 59 of the Oklahoma Statutes, the Attorney
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10 General may instruct the Insurance Commissioner that the PBM be
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11 censured or his or her license be suspended or revoked. If the
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12 Attorney General makes such instruction, the Commissioner shall
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13 enforce the instructed action within thirty (30) days.
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14 2. In addition to or in lieu of any censure, suspension, or
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15 revocation by the Commissioner, the Attorney General may levy a
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16 civil or administrative fine not less than One Hundred Dollars
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17 ($100.00) and not greater than Ten Thousand Dollars ($10,000.00) for
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18 each violation of this subsection and assess any other penalty or
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19 remedy authorized by this act. For purposes of this section, each
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20 day a PBM fails to comply with an investigation or inquiry may be
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21 considered a separate violation.
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22 H. The proper venue to compel compliance with a subpoena of a
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23 person or entity under this section shall be in the Oklahoma County
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24 District Court.
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1 I. No provision of this state's law shall be construed to
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2 prohibit the Attorney General from obtaining any information or
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3 documentation pertaining to prescription drug transactions
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4 including, but not limited to, data, statements, testimonies,
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5 contracts, communications, provider manuals, or any other
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6 documentation or materials, whether related to discount programs,
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7 loyalty programs, or otherwise. The duty to provide cooperation as
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8 set forth in this section shall extend to all PBMs, insurers,
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9 auditors, employers, vendors, or any other individual or entity
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10 acting on behalf of or in collaboration with a PBM.
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11 SECTION 4. This act shall become effective November 1, 2025.
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13 60-1-697 CAD 1/19/2025 5:43:03 AM
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Req. No. 697 Page 14Every fact on this page links to its source, starting with the official bill record.