HB 23-1201

HB 23-1201, which has been approved by the governor and will take effect on August 7, 2023, aims to ensure that pharmacy benefit managers (PBMs) and health insurance carriers do not charge more for prescription drugs than what they pay pharmacies. This means if a PBM or carrier pays $50 to a pharmacy for a drug, they cannot charge the patient more than $50 for it. The bill also requires PBMs and carriers to be transparent about their prescription drug benefits and allows insurance commissioners to audit these companies to make sure they comply with the new rules. This law will affect both individual health plans and group health benefit plans starting in 2025, ensuring that patients pay fair prices for their medications.

Official Summary

For a contract between a pharmacy benefit manager (PBM) or a health insurance carrier (carrier) and a certificate holder or policyholder, the act requires that the amount charged by the PBM or carrier to the certificate holder or policyholder for a prescription drug be equal to or less than the amount paid by the PBM or carrier to the contracted pharmacy for the drug. For group health benefit plans in effect during the 2025 calendar year and each calendar year thereafter, the act creates transparency requirements for PBMs and carriers regarding prescription drug benefits and grants audit authority to the commissioner of insurance (commissioner) for fully insured plans to ensure compliance with the requirements. The commissioner is authorized to promulgate rules to implement the act. A violation of the requirements of the act is a deceptive trade practice in the business of insurance, with regard to fully insured plans. For contracts between a PBM and the department of health care policy and financing (state department) or one of its affiliated managed care organizations offering a prescription benefit plan that is issued on or after January 1, 2025, the act requires the amount charged by the PBM to the state department or managed care organization for a prescription drug dispensed to an enrollee in the Colorado medical assistance program to be equal to or less than the amount paid by the PBM to a pharmacy for the prescription drug dispensed to the enrollee. The act directs the medical services board to adopt rules to implement and ensure compliance with this requirement. APPROVED by Governor May 10, 2023 EFFECTIVE August 7, 2023 NOTE: This act was passed without a safety clause and takes effect 90 days after sine die. (Note: This summary applies to this bill as enacted.)

Votes