House Bill 25-1094, introduced in the Colorado General Assembly on January 27, 2025, aims to regulate the practices of pharmacy benefit managers (PBMs) to enhance transparency and fairness in prescription drug pricing.
Key provisions of the bill include:
Income Structure: PBMs are permitted to earn income solely through flat-dollar service fees per prescription, prohibiting earnings based on the cost of medications.
Formulary Design: The bill prohibits PBMs from designing formularies that favor specific branded pharmaceuticals or biologics, ensuring unbiased drug selection.
Reimbursement Rates: It establishes standardized reimbursement rates that PBMs must adhere to when compensating both unaffiliated and PBM-affiliated pharmacies for dispensed medications.
Income Allocation: Any income derived from sources other than the flat-dollar service fees must be credited back to the associated health insurance carrier or self-funded health benefit plan, promoting cost savings for plan members.
Transparency and Disclosure: PBMs are required to provide relevant documents and data to carriers, self-funded plans, or the Commissioner of Insurance upon request, fostering greater transparency in their operations.
Summary
The bill: •
Allows a pharmacy benefit manager (PBM) to earn income derived from the assessment of a flat-dollar service fee;
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Prohibits a PBM from earning income based on the cost of a prescription drug;
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Prohibits a PBM from designing a formulary to favor a certain branded pharmaceutical or biologic;
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Sets the amount that a PBM shall reimburse an unaffiliated pharmacy or a PBM-affiliated retail, mail order, or specialty pharmacy for a prescription drug;
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Requires a PBM to credit income derived from a source other than a flat-dollar service fee to a health insurance carrier (carrier) or a self-funded health benefit plan; and
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Requires a PBM to make certain documents and data available to a carrier, a self-funded plan, or the commissioner of insurance upon request.
