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SB 1390

Gross production tax; modifying apportionment of collections for certain fiscal years; modifying apportionment limit. Effective date.

2026 Regular Session Introduced by Darcy Jech and 1 co-sponsor

Illinois SB 1390 requires DHFS to curb PBM practices for Medicaid MCOs: ensure transparent pass-through pricing, cap admin fees, and annual PBM reporting to lawmakers.

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Bill Summary · SB 1390

SB 1390 — DHFS‑MCO‑PBM‑CONTRACTS (Summary)

Note: The provided bill text mixes material from two different states. This summary focuses on the material titled “DHFS‑MCO‑PBM‑CONTRACTS” (Illinois content) — the provisions that direct the Illinois Department of Healthcare and Family Services (DHFS) and regulate managed care organizations (MCOs) that rely on pharmacy benefit managers (PBMs). The packet also contains unrelated Arizona language about utility contributions; readers should confirm the final jurisdiction/version.

Main purpose

To increase transparency and set minimum contracting and reimbursement requirements for PBMs that provide services to Medicaid managed care plans (and for MCOs that rely on such PBMs). The goal is to limit certain PBM practices (administrative fee increases, opaque spread pricing) and require periodic PBM reporting to the Department so the State can monitor drug pricing and flows of rebates, fees and reimbursements.

Key provisions

  • DHFS may not contract with an MCO that relies on a PBM unless the PBM agrees to all of the following:

    1. Use a pharmacy reimbursement methodology that is the lesser of: (a) the National Average Drug Acquisition Cost (NADAC) plus a professional dispensing fee (set by the Department), (b) the Wholesale Acquisition Cost (WAC) plus that dispensing fee, or (c) the pharmacy’s usual and customary charge.
    2. Reimburse legally valid claims at a rate not less than the rate in effect when the claim was first adjudicated at point of sale.
    3. Move to a transparent pass‑through pricing model, disclosing the administrative fee as a percentage of professional dispensing costs to DHFS.
    4. Not create new pharmacy administrative fees and not increase current fees by more than the rate of inflation (subject to federal rules).
    5. Not terminate an existing contract with a licensed pharmacy solely because of the additional professional dispensing fee authorized by this provision.

  • Annual PBM reporting (each January 15 beginning 2027) to DHFS for the previous fiscal year must include:

    • Total number of prescriptions dispensed.
    • Aggregate WAC for each formulary drug.
    • Aggregate rebates, discounts and price concessions received for each formulary drug.
    • Aggregate administrative fees received from manufacturers.
    • Aggregate amounts of (WAC and rebates) retained by the PBM (i.e., not passed through) and amounts passed through.
    • Aggregate reimbursements PBM paid to contracting pharmacies.
    • Any additional information DHFS considers necessary.

  • DHFS must forward the collected data to the General Assembly and the Governor’s Office of Management and Budget (by March 1, 2027 and each March 1 thereafter).

  • Non‑aggregated information submitted to DHFS under these provisions is treated as confidential and is exempt from disclosure under the Freedom of Information Act.

Who is affected

  • Pharmacy benefit managers (PBMs) that receive Medicaid‑relevant reimbursements (directly or via Medicaid MCOs)
  • Managed care organizations contracting with DHFS
  • Retail, institutional and 340B pharmacies participating in Medicaid/MCO networks
  • DHFS, the General Assembly and the Governor’s Office (receivers and users of the data)
  • Medicaid beneficiaries indirectly (through potential effects on pharmacy access, reimbursement, and plan design)

Potential impact

  • Increased transparency into PBM pricing, rebates and fee retention.
  • Potentially higher pharmacy reimbursement rates and stronger protections for pharmacies (reduced terminations tied to dispensing fees).
  • Limits on PBM fee growth (linked to inflation) and a requirement to move toward pass‑through pricing could reduce PBM revenue streams; MCOs and payers may see changes in their net drug cost structures.
  • Administrative and compliance burdens on PBMs and DHFS to collect, submit and manage confidential data.
  • Confidentiality protections limit public access but enable legislative and budgetary oversight.

Timeline / procedural status (as provided)

  • Introduced: Feb 19, 2025.
  • Senate Committee Amendment No. 1 filed: Mar 17, 2025 (renaming/expanding measure in one amendment as “Prescription Drug Affordability Act” and adding broader insurance/benefit code changes).
  • Latest status note: Senate Committee Amendment No. 1 Rule 3‑9(a) / Re‑referred to Assignments (Jun 2, 2025).
  • Reporting deadlines in the bill: PBM reporting begins Jan 15, 2027; DHFS transmittal to legislature/GOMB by Mar 1, 2027.

Recommendation: Because the packet contains mixed-state materials and an extensive committee amendment that changes scope, verify the official enacted text and which jurisdiction/version (Illinois vs. Arizona) you intend to analyze before relying on this summary for policymaking or compliance.

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

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