Prescription Drug Benefit Information Transparency

Second Regular Session Seventy-fifth General Assembly STATE OF COLORADO INTRODUCED HOUSE BILL 26-1056 LLS NO. 26-0306.01 Eden Rolland x2373 HOUSE SPONSORSHIP DeGraaf, SENATE SPONSORSHIP (None), House Committees Senate Committees Health & Human Services A BILL FOR AN ACT CONCERNING PRESCRIPTION DRUG SOURCING PROVIDED PURSUANT TO A HEALTH BENEFIT PLAN.

Bill Summary (Note: This summary applies to this bill as introduced and does not reflect any amendments that may be subsequently adopted. If this bill passes third reading in the house of introduction, a bill summary that applies to the reengrossed version of this bill will be available at http://leg.colorado.gov.) The bill creates the "Prescription Drug Optimized Sourcing Transparency and Integrity Act" to prohibit a pharmacy benefit manager (PBM) or a health-care consultant from knowingly making or disseminating false or misleading statements or claims to a self-insured employer or policyholder about the legality or safety of a lawful prescription drug optimized sourcing program established by a pharmacy Shading denotes HOUSE amendment. Double underlining denotes SENATE amendment.

Capital letters or bold & italic numbers indicate new material to be added to existing law. Dashes through the words or numbers indicate deletions from existing law.

stewardship program. Upon written request by a self-insured employer, a PBM or health-care consultant is required to provide certain cost information for each prescription drug dispensed under the health benefit plan. The prohibition and information-sharing provisions of the bill do not restrict or limit the rights of a self-insured employer to purchase prescription drugs through and contract for a lawful prescription drug optimized sourcing program. The bill also recognizes that a pharmacy stewardship program is an effective cost-containment tool and is authorized when implemented in compliance with federal law and with the bill.

Be it enacted by the General Assembly of the State of Colorado: SECTION 1. Legislative declaration. (1) The general assembly finds and declares that:

(a) Improving transparency and integrity in prescription drug purchasing protects employers and health benefit plan sponsors, supports patient safety, and reduces unnecessary costs, while preserving clinical decision-making; and

(b) It is the policy of this state to permit the lawful personal-use importation of prescription drugs, otherwise known as pharmacy stewardship programs, optimized sourcing, or international sourcing, in order to reduce net plan costs without disrupting patient care.

SECTION 2. In Colorado Revised Statutes, add 10-16-171 as follows: 10-16-171.

Pharmacy benefit managers - health-care consultants - prescription drug optimized sourcing - disclosure requirements - enforcement - short title - definitions.

Short title. THE SHORT TITLE OF THIS SECTION IS THE "PRESCRIPTION DRUG OPTIMIZED SOURCING TRANSPARENCY AND INTEGRITY ACT".

(2) Definitions. AS USED IN THIS SECTION:

(a) "HEALTH-CARE CONSULTANT" MEANS AN INDIVIDUAL OR ENTITY THAT PROVIDES PROFESSIONAL ADVICE, ANALYSIS, OR SERVICES TO A SELF-INSURED EMPLOYER REGARDING HEALTH BENEFIT PLAN DESIGN OR ADMINISTRATION, INCLUDING SERVICES RELATED TO PRESCRIPTION DRUG BENEFITS.

(b) "NATIONAL DRUG CODE" HAS THE MEANING SET FORTH IN SECTION 10-16-122.9 (2)(f).

(c) (I) "PHARMACY STEWARDSHIP PROGRAM" MEANS A PROGRAM OPERATED BY OR ON BEHALF OF A SELF-INSURED EMPLOYER TO OPTIMIZE THE FINANCIAL PERFORMANCE OF THE SELF-INSURED EMPLOYER'S PHARMACY BENEFIT WHILE MAINTAINING SAFETY, CONTINUITY OF THERAPY, AND EQUAL OR LOWER MEMBER COST SHARE. PRESCRIPTIONS NOT FULFILLED THROUGH THE PHARMACY STEWARDSHIP PROGRAM CONTINUE TO PROCESS UNDER THE HEALTH BENEFIT PLAN'S EXISTING PHARMACY BENEFIT MANAGER, CARRIER, AND NETWORK.

(II) A "PHARMACY STEWARDSHIP PROGRAM" INCLUDES THE USE OF OPTIMIZED SOURCING.

(III) A "PHARMACY STEWARDSHIP PROGRAM" IS NOT:

(A) INSURANCE OR A POLICY OF INSURANCE;

(B) A HEALTH PLAN;

(C) A PBM; OR

(D) A THIRD-PARTY ADMINISTRATOR.

(d) (I) "PRESCRIPTION DRUG OPTIMIZED SOURCING PROGRAM" MEANS A LAWFUL ARRANGEMENT OPERATED BY OR ON BEHALF OF A SELF-INSURED EMPLOYER UNDER WHICH A DEFINED SUBSET OF PRESCRIPTION DRUGS FOR COVERED PERSONS MAY BE DISPENSED THROUGH CHANNELS OTHER THAN THE HEALTH BENEFIT PLAN'S PHARMACY BENEFIT MANAGER OR CARRIER-ADMINISTERED NETWORK, IF AUTHORIZED BY FEDERAL LAW, TO REDUCE THE NET PLAN COST WHILE MAINTAINING PATIENT SAFETY, CONTINUITY OF THERAPY, AND EQUAL OR LOWER MEMBER COST SHARE. A PRESCRIPTION DRUG OPTIMIZED SOURCING PROGRAM IS NOT INSURANCE, AND PRESCRIPTIONS NOT FULFILLED THROUGH THE PROGRAM CONTINUE TO PROCESS UNDER A PLAN'S EXISTING PHARMACY BENEFIT MANAGER, CARRIER, AND NETWORK.

(II) "PRESCRIPTION DRUG OPTIMIZED SOURCING PROGRAM" INCLUDES A PROGRAM FOR IMPORTING PRESCRIPTION DRUGS AUTHORIZED BY FEDERAL LAW AND FDA REGULATION.

(e) "SELF-INSURED EMPLOYER" MEANS AN EMPLOYER THAT OFFERS A SELF-INSURED HEALTH PLAN TO ITS EMPLOYEES.

(3) Prohibition against misinformation. A PHARMACY BENEFIT MANAGER OR HEALTH-CARE CONSULTANT SHALL NOT KNOWINGLY MAKE OR DISSEMINATE FALSE OR MISLEADING STATEMENTS OR CLAIMS TO AN EMPLOYER, SELF-INSURED EMPLOYER, OR POLICYHOLDER ABOUT THE LEGALITY OR SAFETY OF A LAWFUL PRESCRIPTION DRUG OPTIMIZED SOURCING PROGRAM ESTABLISHED BY A PHARMACY STEWARDSHIP PROGRAM.

(4) Disclosure requirements.

(a) UPON WRITTEN REQUEST BY A SELF-INSURED EMPLOYER, A PHARMACY BENEFIT MANAGER OR HEALTH-CARE CONSULTANT SHALL PROVIDE DETAILED COST INFORMATION FOR EACH PRESCRIPTION DRUG DISPENSED UNDER THE PLAN, INCLUDING:

(I) TOTAL DRUG COST PER CLAIM;

(II) TOTAL MEMBER-PAID PORTION PER CLAIM;

(III) TOTAL PLAN-PAID, SPONSOR-PAID, OR EMPLOYER-PAID PORTION PER CLAIM; AND

(IV) NATIONAL DRUG CODE, QUANTITY, STRENGTH, AND DAYS OF SUPPLY.

(b) A PHARMACY BENEFIT MANAGER OR HEALTH-CARE CONSULTANT THAT PROVIDES COST INFORMATION PURSUANT TO SUBSECTION (4)(a) OF THIS SECTION SHALL NOT WITHHOLD, EDIT, OR REDACT THE INFORMATION THAT THE PHARMACY BENEFIT MANAGER OR HEALTH-CARE CONSULTANT PROVIDES.

(5) Self-insured employer rights. THIS SECTION DOES NOT RESTRICT OR LIMIT THE RIGHT OF A SELF-INSURED EMPLOYER TO PURCHASE PRESCRIPTION DRUGS THROUGH A LAWFUL PRESCRIPTION DRUG OPTIMIZED SOURCING PROGRAM. A SELF-INSURED EMPLOYER RETAINS THE RIGHT TO CONTRACT FOR ANY LAWFUL PRESCRIPTION DRUG OPTIMIZED SOURCING PROGRAM, INCLUDING PERSONAL-USE IMPORTATION PROGRAMS PERMITTED UNDER FEDERAL LAW, FOR DRUGS USED BY THE SELF-INSURED EMPLOYER'S HEALTH BENEFIT PLAN'S COVERED PERSONS.

(6) Pharmacy stewardship programs.

(a) A PHARMACY STEWARDSHIP PROGRAM THAT IS DESIGNED TO IMPROVE MAINTAINING PATIENT SAFETY IS RECOGNIZED AS AN EFFECTIVE COST-CONTAINMENT TOOL.

THE COST-EFFECTIVENESS OF MEDICATION USE WHILE

(b) PHARMACY STEWARDSHIP PROGRAMS AND PRESCRIPTION DRUG OPTIMIZED SOURCING PROGRAMS ARE AUTHORIZED BY STATE LAW WHEN IMPLEMENTED IN COMPLIANCE WITH FEDERAL LAW AND WITH THIS SECTION.

IMPORTING PRESCRIPTION DRUGS WHEN AUTHORIZED UNDER FEDERAL SUCH AUTHORIZED PROGRAMS INCLUDE PROGRAMS FOR LAW.

(c) NOTHING IN THIS SECTION SHALL BE CONSTRUED TO CREATE A NEW INSURANCE PRODUCT OR MANDATORY COVERAGE.

(7) No state cost or self-insured employer mandate.

(a) THIS SECTION DOES NOT:

(I) CREATE A FISCAL REQUIREMENT FOR ANY STATE AGENCY OR AN APPROPRIATION FROM THE GENERAL FUND;

(II) REQUIRE AN EMPLOYER TO ADOPT OR PARTICIPATE IN A PRESCRIPTION DRUG OPTIMIZED SOURCING PROGRAM OR PHARMACY STEWARDSHIP PROGRAM; OR

(III) REQUIRE THAT RESOURCES BE EXPENDED AS A RESULT OF THIS SECTION.

(b) THE COMMISSIONER SHALL IMPLEMENT THIS SECTION WITHIN EXISTING APPROPRIATIONS.

(8) Enforcement. THE COMMISSIONER SHALL ENFORCE THIS SECTION WITH RESPECT TO A PBM OR HEALTH-CARE CONSULTANT THAT ADMINISTERS OR MANAGES PRESCRIPTION DRUG BENEFITS FOR A HEALTH BENEFIT PLAN.

HEALTH-CARE CONSULTANT IS AN UNFAIR METHOD OF COMPETITION AND AN UNFAIR OR DECEPTIVE ACT OR PRACTICE IN THE BUSINESS OF INSURANCE PURSUANT TO SECTION 10-3-1104 (1)(uu). EACH DAY DURING WHICH A VIOLATION CONTINUES CONSTITUTES A SEPARATE VIOLATION.

SECTION 3. In Colorado Revised Statutes, 10-3-1104, add A VIOLATION OF THIS SECTION BY A PBM OR A (1)(uu) as follows:

10-3-1104. Unfair methods of competition - unfair or deceptive practices - rules - definitions. (1) The following are defined as unfair methods of competition and unfair or deceptive acts or practices in the business of insurance:

(uu) VIOLATING SECTION 10-16-171.

SECTION 4.

Act subject to petition - effective date - applicability. (1) This act takes effect at 12:01 a.m. on the day following the expiration of the ninety-day period after final adjournment of the general assembly (August 12, 2026, if adjournment sine die is on May 13, 2026); except that, if a referendum petition is filed pursuant to section 1

(3) of article V of the state constitution against this act or an item, section, or part of this act within such period, then the act, item, section, or part will not take effect unless approved by the people at the general election to be held in November 2026 and, in such case, will take effect on the date of the official declaration of the vote thereon by the governor.

(2) This act applies to conduct or omissions occurring on or after the applicable effective date of this act.