SB60: SB60 Pharmacy Benefits Managers; managers have a duty of care to insureds, health plans, and providers; provide

Pharmacy benefits managers (PBMs) are companies that administer prescription drug benefits for insurers and employers, deciding things like which pharmacies patients can use and how drugs get priced. Currently Georgia law regulates PBMs but does not spell out a formal duty of care they owe to the people and plans they serve. This bill amends Georgia's PBM licensing law (O.C.G.A. Chapter 64 of Title 33) to create a new 'pharmacy benefits manager duty' owed to insureds, health plans, and providers. It directs the Insurance Commissioner to write regulations spelling out that duty, including transparency around pricing, formulary decisions, and conflicts of interest. It also updates several definitions, including adding terms like 'insurer,' 'provider,' and 'spread pricing,' sets a priority order if duties conflict, and creates a private right of action letting anyone harmed by a violation sue a PBM in state court.

• Creates a new legal duty requiring pharmacy benefits managers to act with care, good faith, and fair dealing toward insureds, health plans, and providers.
• Directs the Insurance Commissioner to adopt regulations spelling out exactly what that duty requires, including disclosure of conflicts of interest and transparency about pricing.
• Sets a priority order for conflicting duties: the duty to an insured comes before the duty to any other party, and the duty to a provider comes before the duty to a health plan.
• Creates a private right of action letting an insured, health plan, or provider sue a pharmacy benefits manager in state court for violating the new duty.
• Adds and revises multiple definitions in the PBM law, including new terms like 'insurer,' 'provider,' 'spread pricing,' 'related entity,' and 'pharmacy benefits management fee.'
• Clarifies that Georgia will only regulate pharmacy benefits managers or insurers to the extent permitted under federal law.

Pharmacy benefits managers operating in Georgia, health insurers and health plans (including the state health benefit plan, Medicaid, and PeachCare for Kids), pharmacies and other prescription drug providers, and individual patients (insureds) who receive prescription drug coverage through these plans.

If enacted, patients, pharmacies, and health plans would gain a legal basis to hold pharmacy benefits managers accountable for pricing practices, conflicts of interest, and formulary decisions, and could sue in state court if a PBM fails to meet its new duty of care.

• Section 1 revises Code Section 33-64-1 to add and update definitions, including 'insurer,' 'provider,' 'pharmacy benefits management fee,' 'related entity,' and 'spread pricing,' and defines a new 'pharmacy benefits manager duty.'
• Section 2 revises Code Section 33-64-13 to state that Georgia will regulate pharmacy benefits managers and insurers only to the extent permitted under federal law.
• Section 3 adds new Code Section 33-64-14, creating the duty of care, good faith, and fair dealing owed to insureds, health plans, and providers, and directing the Commissioner to write implementing regulations.
• Section 3(b) establishes that when duties conflict, the duty owed to an insured takes priority over other duties, and the duty owed to a provider takes priority over the duty owed to a health plan.
• Section 3(c) creates a private right of action allowing anyone aggrieved by a violation to sue a pharmacy benefits manager in state court.
• Section 4 repeals all conflicting laws.

1. 2025-01-30Senate Read and Referred (Senate)
2. 2025-01-29Senate Hopper (Senate)

• Chuck Hufstetler (R, SD-052)Primary sponsor
• Kay Kirkpatrick (R, SD-032)
• Ben Watson (R, SD-001)
• Nan Orrock (D, SD-036)
• Brian Strickland (R, SD-042)

• pharmacy benefits managers
• prescription drug pricing
• health insurance regulation
• drug pricing transparency
• consumer protection