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SB 4

Insurance: health insurers; compliance with the prescription drug cost and affordability review act; require. Amends 1956 PA 218 (MCL 500.100 - 500.8302) by adding sec. 3406tt. TIE BAR WITH: SB 0003'25

2025-2026 Regular Session Introduced by Stephanie Chang and 2 co-sponsors

Michigan requires health insurers to comply with prescription drug cost affordability standards, potentially limiting drug prices but risking premium increases and reduced market flexibility.

referred to Committee on Government Operations
#health:pharmaceuticals #insurance:healthinsurers
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Bill Summary · SB 4

Legislative bill overview

SB 4 amends Michigan's insurance code to require health insurers to comply with the state's Prescription Drug Cost and Affordability Review Act. The bill adds a new section (3406tt) to the 1956 Insurance Code, establishing compliance obligations for insurers regarding prescription drug pricing and cost management practices.

Why is this important

Prescription drug costs represent a significant burden for Michigan residents and insurers alike. This bill creates enforceable compliance requirements that could affect how health insurers manage drug formularies, negotiate prices, and control out-of-pocket costs for patients. The legislation is paired with companion bill SB 3, suggesting a comprehensive legislative approach to prescription drug affordability.

Potential points of contention

  • Implementation costs: Health insurers may argue that new compliance requirements increase administrative burden and operational costs, which could be passed to consumers through higher premiums
  • Market dynamics: Insurance industry may contend that heavy-handed regulations could reduce competitive negotiating power with pharmaceutical manufacturers or limit access to certain drugs
  • Scope and enforcement: Ambiguity around what specific "compliance" means and how the state will monitor/enforce these requirements could create regulatory uncertainty and disputes

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

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