HB 25-1094

House Bill 25-1094, also known as the Pharmacy Benefit Manager Practices Act, sets new rules for how PBMs operate in Colorado starting January 1, 2027. It stops PBMs from earning money based on drug prices and bans them from favoring certain brand-name drugs over others when creating their formularies. The bill requires PBMs to reimburse pharmacies fairly and mandates that contracts between PBMs and health plans include provisions for transparency and audits. Since the bill has been signed, these rules will become law as scheduled in 2027, affecting how prescription drug costs are managed by PBMs and impacting both pharmacies and health benefit plan members.

Official Summary

Beginning January 1, 2027, the act: Allows a pharmacy benefit manager (PBM) to earn income derived from the assessment of a flat-dollar service fee for the provision of a prescription drug; Prohibits a PBM from earning income based on the price or cost of a prescription drug; Prohibits a PBM from designing a formulary to favor a certain branded pharmaceutical or biologic; Requires a PBM to be reimbursed by a health benefit plan for lowering the plan's prescription drug spending over a given period of time and for the direct services the PBM provides to the plan; 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; and Requires a contract between a PBM and a health benefit plan to contain a provision where the PBM discloses prescription drug cost information to the health benefit plan and a provision authorizing the health benefit plan to execute an audit to validate compliance with the contract.(Note: This summary applies to this bill as enacted.)

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