HB690: HB690 Pharmacy benefits managers; duty of care to insureds, health plans, and providers; provide

Pharmacy benefits managers (PBMs) are companies that administer prescription drug benefits for insurers and health plans, deciding things like which pharmacies are in network and how much they get paid. Georgia law already regulates PBMs under Chapter 64 of Title 33, but this bill adds a new legal duty of care that PBMs would owe to three groups: insured patients, health plans, and providers such as pharmacies. The bill expands the definitions section to add new terms like 'spread pricing,' 'rebate,' 'related entity,' and 'pharmacy benefits manager duty,' and creates a new Code section, 33-64-14, spelling out duties of care and 'good faith and fair dealing' owed to each group. The state insurance Commissioner would be directed to write regulations spelling out exactly what those duties require, including disclosing conflicts of interest and being transparent about pricing. If the duties conflict, the duty to insureds comes first, and the duty to providers outranks the duty to health plans. Anyone harmed by a violation could sue a PBM in Georgia state court.

• Creates a new legal 'pharmacy benefits manager duty' requiring PBMs to act with care, skill, fairness, transparency, and in the best interest of insureds, health plans, and providers.
• Directs the state insurance Commissioner to write regulations spelling out exactly what PBMs must do to meet these duties, including disclosing conflicts of interest.
• Sets a priority order when duties conflict: the duty to insured patients comes before duties to health plans or providers, and the duty to providers outranks the duty to health plans.
• Creates a private right of action letting any person harmed by a PBM's violation of the new duty sue the PBM in a Georgia state court.
• Adds and revises numerous definitions in O.C.G.A. § 33-64-1, including new terms for 'spread pricing,' 'rebate,' 'related entity,' 'provider,' and 'pharmacy benefits management fee.'

Pharmacy benefits managers operating in Georgia; insured patients who get prescription drug coverage through a PBM; health plans and insurers that contract with PBMs; and pharmacies and other providers that dispense or administer prescription drugs and deal with PBMs.

If enacted, patients, pharmacies, and health plans that believe a PBM shortchanged them, hid pricing information, or acted against their interests would have a specific legal duty to point to and the ability to sue in state court, rather than relying only on state regulatory enforcement.

• Section 1 rewrites O.C.G.A. § 33-64-1 to add and renumber definitions, including new terms such as 'spread pricing,' 'rebate,' 'related entity,' 'provider,' and 'pharmacy benefits manager duty.'
• Section 2 revises O.C.G.A. § 33-64-13 to clarify that conflicting federal law controls and that the state may only regulate PBMs and insurers to the extent permissible under applicable law.
• Section 3 adds new Code Section 33-64-14, creating the pharmacy benefits manager duty owed to insureds, health plans, and providers, including duties of care and good faith and fair dealing.
• Section 3(a) directs the Commissioner to adopt regulations defining the scope of these duties, including transparency about formulary design, pricing, spread pricing, and conflicts of interest.
• Section 3(b) sets a priority order for conflicting duties: duty to insureds is primary, and duty to providers outranks duty owed to health plans.
• Section 3(c) creates a private right of action allowing an aggrieved person to sue a PBM in a Georgia state court for violating the new duty.
• Section 4 repeals any conflicting laws.

1. 2025-03-04House Second Readers (House)
2. 2025-03-03House First Readers (House)
3. 2025-02-28House Hopper (House)

• Mark Newton (R, HD-127)Primary sponsor
• Michelle Au (D, HD-050)
• Sharon Cooper (R, HD-045)
• Ron Stephens (R, HD-164)
• Lee Hawkins (R, HD-027)

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