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HB 1217

HEALTH: Provides with respect to pharmacy benefit managers

2026 Regular Session Introduced by Michael Echols

The bill requires full disclosure of affiliated entities, annual financial reconciliations, quarterly claims-level reporting, and penalties to curb hidden PBM payments and spread p

Read second time by title and referred to the Committee on Health and Welfare.
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Bill Summary · HB 1217

HB 1217 (Louisiana) – Health: Provides with respect to pharmacy benefit managers

Overview
- Purpose: Strengthen transparency, accountability, and enforcement related to pharmacy benefit managers (PBMs), insurers, health maintenance organizations (HMOs), third-party administrators, and their affiliated entities. The bill aims to curb opaque practices, ensure disclosure of affiliations and financial flows, and establish robust enforcement and penalties.

Key Provisions and Changes
- Disclosure of affiliated entities
- PBMs and insurers must disclose all affiliated or related entities involved in pharmacy-related services.
- Disclosures must map the complete corporate vertical integration, covering components such as PBM/insurer, group purchasing organization, manufacturers, wholesalers, specialty or mail-order/pharmacy providers, retail or long-term care pharmacies, and providers.
- Each affiliate’s services must be identified, including the number of services, the entities providing them, and the dollar amounts tied to those services.
- All compensation flowing through an affiliated entity is treated as PBM compensation for regulatory purposes.

  • Financial reconciliation and data access

    • PBMs and insurers administering self-funded plans must provide an annual full financial reconciliation to plan sponsors, detailing all fees, rebates, administrative offsets, negotiated price concessions, performance-based concessions, and affiliated-entity payments.
    • Prohibits contract provisions that restrict access to claims-level data or limit disclosure to regulators.

  • Claims-level reporting and verifications

    • Requires quarterly claims-level reporting to the commissioner and attorney general, including:
    • Billed and paid amounts
    • All direct and indirect remuneration
    • Affiliates involved in each transaction
    • Post-sale adjustments
    • Negotiated or performance-based price concessions
    • Requires reporting of total reimbursements paid to network pharmacies in the state, identified by local and non-local pharmacies.
    • The commissioner may examine books and records to verify data.

  • Prohibition on spread pricing manipulation

    • Prohibits recharacterization of spread pricing through administrative fees, affiliate payments, data charges, or service charges.
    • Such practices are deemed unfair or deceptive and subject to enforcement, including restitution, disgorgement, and treble damages for knowing or willful violations.

  • Enforcement and penalties

    • Grants the commissioner and attorney general concurrent enforcement authority; civil actions, subpoenas, and injunctive relief are authorized.
    • Minimum civil penalty set at $1,000,000 per violation.
    • Each undisclosed remuneration, failure to disclose an affiliated relationship, or failure to provide required reporting constitutes a separate violation.
    • Possible restitution, disgorgement, treble damages for knowing/willful violations, and recovery of attorney fees, investigative costs, and expert fees.
    • Establishes the Pharmacy Benefit Enforcement Fund, financed by civil penalties, settlements, and cost recoveries, to fund investigations, litigation, regulatory enforcement, and consumer protection.

  • Whistleblower protections

    • Protections for whistleblowers and potential awards up to 25% of recovered funds.

  • Fiduciary duties

    • Adds a definition of “fiduciary” specific to PBMs, imposing duties of loyalty, prudence, and good faith toward health plans or plan sponsors when performing PBM services.

Effective date
- Effective upon the governor’s signature or, if not signed, upon lapse of the period for gubernatorial action; if vetoed and subsequently approved by the legislature, becomes effective the day after approval.

Who is affected
- PBMs, health insurers, HMOs, third-party administrators, and their affiliated entities.
- Plan sponsors and self-funded employer groups.
- State regulators (Louisiana Commissioner of Insurance and Attorney General) with enhanced oversight authority.
- Restitution and enforcement processes will impact entities found in violation, including potential civil penalties and funds for enforcement.

Notes
- The amendments referenced primarily adjust terminology (PBMs to “pharmacy benefit manager”/“insurer”) and clarifications to ensure broad applicability across related entities.
- The bill codifies extensive disclosure, data reporting, and financial transparency measures intended to deter practices such as undisclosed affiliated payments and manipulated pricing structures.

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

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