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HB 1584

Children; Children and Juvenile Code Act of 2025; effective date.

2025 Regular Session Introduced by Mark Lawson

ND HB 1584 establishes a state PBM regulator, licensing, fees, and a transparency regime to disclose rebates/payments and enforce contract rules.

Second Reading referred to Rules
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Bill Summary · HB 1584

HB 1584 — Pharmacy Benefits Managers (North Dakota) — Summary (2025)

Status: Enacted by the 69th Legislative Assembly (2025). The bill was passed with amendments and enacted in 2025; most provisions take effect September 1, 2025 (bill includes an emergency clause).

Purpose
- To establish a state registration and regulatory structure for pharmacy benefits managers (PBMs), increase transparency about PBM payments and how those payments are used, restrict certain PBM contracting practices, create an enforcement fund, repeal prior PBM-related statutes, and provide civil/criminal penalties and funding to support enforcement.

Key provisions and changes
- Definitions and scope
- Revises and clarifies definitions for “pharmacy benefits manager,” “covered entity,” “covered individual,” “rebate,” “payment received by the pharmacy benefits manager,” and related terms within chapter 26.1-27.1.
- Explicitly excludes certain self‑funded plans and some carriers in defined circumstances.

  • Licensing / registration

    • Requires PBMs operating in the state to be licensed/registered with the Insurance Commissioner (certificate of registration as an administrator under chapter 26.1-27).
    • Commissioner-authorized application and renewal process; licensing term defined (one year from April 30 through March 31).
    • Financial responsibility requirement: each application and renewal must include evidence of $1,000,000 in financial responsibility.

  • Fees / funding

    • Initial application fee and annual renewal fee to be set by the commissioner and capped (as amended) at up to $10,000 for initial application and annual renewal.
    • Establishes a pharmacy benefit manager enforcement fund (continuing appropriation language in bill variants) to receive fees, penalties, and related receipts to support enforcement and regulatory activity.

  • Contracting and prohibited practices

    • PBMs may not require a pharmacist or pharmacy to accept one contract as a condition of participation in another.
    • PBMs cannot exclude an otherwise qualified pharmacy that accepts contract terms and reimbursement rates.
    • PBMs must offer opt‑in pharmacy contracts — pharmacies must have at least 30 days to respond and contracts must be signed by the pharmacy (or entity acting on its behalf).
    • Pharmacies are permitted to opt out of PBM contracts with at least 90 days’ notice.
    • PBMs must comply with state rules governing substitution of drugs.

  • Transparency / examinations

    • During examinations of covered entities (insurers, HMOs, etc.), the Commissioner may review contracts between covered entities and PBMs.
    • Covered entities must annually disclose to the Commissioner the “payment received by the PBM” (a statutorily defined aggregate of rebates, administrative fees, pharmacy network fees, price concessions, data‑sale revenues, etc.) and describe how those payments have been applied (e.g., used to reduce rates or distributed to covered individuals).
    • The Commissioner may assess whether PBM‑received payments were applied toward reducing plan rates or distributed to members.

  • Repeals and alignment

    • Repeals certain prior PBM-related statutory provisions (section 26.1-27-01.1 and chapter 26.1-36.10) to replace or consolidate regulatory framework.

  • Enforcement and penalties

    • Operating as a PBM without required registration/license can carry criminal exposure (Class C felony language appears in earlier versions; the enacted bill provides enforcement mechanisms and penalties — see final statute text for exact penalty structure).
    • Civil/administrative penalties and fees collected are directed to the enforcement fund.

Who is affected
- PBMs and entities that contract with PBMs (including insurers, health plans, HMOs, nonprofit hospitals, employers, labor unions).
- Retail and independent pharmacies (contracting options and opt‑out rights).
- Manufacturers, labelers, and rebate aggregators (expanded reporting and regulatory focus on fee streams).
- Covered individuals and plan members (indirectly affected via transparency and potential pass-through of savings).

Procedural/timeline notes
- Introduced December 11, 2024; went through committee hearings and multiple amendments in both chambers.
- Final enactment occurred in 2025; effective date set for September 1, 2025 (consult official state code or the signed bill for the precise effective and emergency-clause details).
- The bill creates an ongoing regulatory program administered by the Insurance Commissioner; fees and fund receipts are used to support enforcement activities.

Potential impacts (high-level)
- Greater regulatory oversight and transparency on PBM payment flows and contract practices.
- Increased compliance costs for PBMs (licensure, bond/financial responsibility, reporting).
- Potentially stronger bargaining/contracting position for pharmacies and clearer information for covered entities about how PBM payments are applied.
- Enforcement capacity funded via licensing fees and penalties.

For exact statutory language, penalty amounts, and any implementing rules, consult the final enacted text in chapter 26.1-27.1 of the North Dakota Century Code and related Insurance Department rulemaking.

Compiled from official sources — confirm details with the bill’s official record.

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