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SB 377

HEALTH/ACC INSURANCE: Provides relative to pharmacy benefit managers. (gov sig) (OR +$2,265,844 SG EX See Note)

2026 Regular Session Introduced by Jimmy Harris

Louisiana SB 377 strengthens PBM oversight by limiting revenue sources, banning spread pricing, and mandating annual audits and strict contract disclosures.

Introduced in the Senate; read by title. Rules suspended. Read second time and referred to the Committee on Insurance.
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Bill Summary · SB 377

Overview

Senate Bill 377 (SB 377), introduced in the 2026 Regular Session of the Louisiana Legislature, proposes to regulate pharmacy benefit managers (PBMs) more tightly. The bill would create new requirements for PBMs, including limitations on how they earn revenue, mandatory audits, reporting and contract disclosures, privacy protections for confidential information, and certain contract standards with insurers or health plans. It would also repeal a current provision (R.S. 22:1856(F)) and add new law (R.S. 22:1657.1). The act would take effect upon the governor’s signature or the expiration of gubernatorial action.

Purpose and Intent

  • Establish clearer standards and oversight for PBMs operating in Louisiana.
  • Limit certain revenue practices (e.g., rebates and spread pricing) and require transparency in PBM compensation.
  • Enhance accountability through annual audits and mandatory reporting.
  • Ensure contracts with insurers/health plans include explicit disclosures of revenue forms.

Key Provisions

  • Add: R.S. 22:1657.1 establishing PBM governance (A–F subsections detailing definitions, compensation, audits, contracts, penalties, and regulatory scope).
  • PBM Compensation (Section B):
    • PBMs may negotiate but not retain rebates and fees.
    • PBMs may only derive income from PBM fees for services provided to an insurer or health plan in Louisiana.
    • The amount of PBM fees must be stated in the contract with the insurer/health plan.
    • Fees must not be contingent on drug acquisition costs, rebates, or patient cost-sharing amounts.
    • Annual certification due by December 31 each year, by the PBM’s CEO or CFO, confirming full compliance.
  • PBM Audits (Section C):
    • The Louisiana Commissioner of Insurance and any insurer/health plan contractually linked to a licensed PBM may audit the PBM once per calendar year.
    • Audits may request detailed reimbursement data (claim-level payments, rebates, fees, clawbacks, etc.), differences between affiliated vs. unaffiliated pharmacies, historical claims data, aggregate rebates, and more.
    • Information must be provided within 30 days of request; form of data at the Commissioner’s discretion.
    • Certifications of accuracy must be signed by the PBM’s CEO or CFO.
    • Confidential and proprietary information must be protected from public disclosure; such data shall not become a public record.
  • PBM Contract and Other Requirements (Section D):
    • New or renewed contracts after January 1, 2027 must specify all forms of revenue (including PBM fees) paid by the insurer/health plan to the PBM.
    • Acknowledgment that spread pricing is not permitted.
  • Penalties (Section E):
    • Violations are subject to civil monetary penalties up to $1,000 per claim, in addition to other civil/criminal penalties under law.
  • Regulatory Scope (Section F):
    • Louisiana will regulate PBMs and insurers only to the extent permitted by applicable law.

Definitions (Key Terms)

  • PBM: Pharmacy Benefit Manager, defined consistently with existing statute (R.S. 22:1641) to include entities that provide PBM services and related entities (agents, contractors, affiliates, etc.).
  • Rebate: Negotiated price concessions and related price protections that reduce insurer/health plan liabilities.
  • Unaffiliated Pharmacy: A dispensing pharmacy not fractionally or wholly owned by a PBM or its affiliates.
  • Related Entity: Broad definition including common control groups and entities connected to PBMs as regulated by commissioner rules.

Affected Parties

  • Pharmacy Benefit Managers operating in Louisiana.
  • Health insurers and health plans regulated under state law.
  • Insurers or health plans contracting with PBMs in Louisiana.
  • The Louisiana Commissioner of Insurance.
  • Pharmacies (affiliates and unaffiliated) and, indirectly, patients due to pricing and reimbursement impacts.

Effective Date and Timing

  • Effective upon the governor’s signature or, if not signed, upon lapse of time for gubernatorial action.
  • Contracts with insurers/health plans entered into, amended, extended, or renewed on or after January 1, 2027 must comply with new disclosure and revenue-structure requirements.

Compliance and Compliance Timeline

  • Annual certification due by December 31 each year, attesting compliance with PBM compensation provisions.
  • Annual audits permitted (one per calendar year) with data requests and confidentiality protections.
  • Ongoing reporting and confidentiality obligations for audit information.

Potential Impacts

  • Increased transparency in PBM revenue and compensation structures.
  • Reduced use of spread pricing and prohibited certain fee structures tied to drug costs or patient charges.
  • Enhanced oversight and accountability via mandatory audits and annual certifications.
  • Possible administrative and compliance burden on PBMs and contracting insurers/health plans.
  • Changes to contract negotiations for PBMs with insurers/health plans after 2027, including explicit disclosure of revenue sources.

Summary

SB 377 aims to strengthen Louisiana’s oversight of PBMs by restricting how PBMs earn money, mandating annual audits and disclosures, ensuring contract clarity on revenue, and protecting confidential information. It repeals current law related to PBM practices (R.S. 22:1856(F)) and adds a framework that emphasizes fee-based income, prohibits spread pricing, and enhances regulatory transparency within permissible constitutional bounds.

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

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