SB 966 introduces new requirements for pharmacy benefit managers (PBMs) in California. It mandates that PBMs obtain licenses from the Department of Insurance by 2027, submit detailed reports on fees and drug contracts, and comply with stricter transparency and cost-sharing rules for prescription drugs. The bill aims to enhance oversight, prevent excessive fees, and ensure fair pricing in pharmacy benefit management. Additionally, it imposes civil penalties for violations and emphasizes maintaining competitive markets without altering the Attorney General’s authority.
Summary of Pharmacy Benefit Manager Regulations and Enforcement
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Reporting Requirements: Pharmacy benefit managers (PBMs) must submit annual reports by July 1 and January 1, detailing drug costs, pricing, rebates, and other financial data. The Department will compile and publish aggregated reports, excluding confidential information.
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Disclosure and Non-Discrimination: PBMs are required to report fees, rebate handling, and other financial interactions with health insurers and pharmacies. They must also ensure non-affiliated pharmacies are treated equally and not discriminated against in terms of reimbursement and contract opportunities.
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Contractual Obligations: PBMs cannot restrict patients to affiliated pharmacies or impose undue conditions. They must also allow non-affiliated pharmacies to offer prescription delivery services and not charge fees for processing electronic claims.
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Enforcement and Penalties: The Department can deny, suspend, or revoke a PBM's license for non-compliance, and it can audit PBM records, with expenses borne by the PBM. Violations may result in civil penalties and injunctive relief. The Attorney General has the authority to enforce laws and seek remedies, and fines are deposited into a dedicated account.
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Confidentiality and Legal Provisions: Certain information remains confidential to protect competitive interests, and the act’s provisions are designed to be severable, ensuring that invalidity in one part does not affect the rest. No local agency reimbursement is required for this act, which also preserves the Attorney General’s authority to uphold market fairness.
Full Bill can be read here.
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