SB 60: 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 much pharmacies get paid. Currently Georgia law regulates PBMs but does not spell out a duty they owe to the people and organizations they serve. This bill amends Chapter 64 of Title 33 of the Official Code of Georgia Annotated to create a new 'pharmacy benefits manager duty,' requiring PBMs to act with care, skill, fairness, transparency, and in the best interest of insureds, health plans, and providers. The bill also updates definitions, including new terms like 'spread pricing,' 'controlled group of corporations,' and 'related entity,' and directs the state Insurance Commissioner to write regulations spelling out exactly what these duties require. If the duties conflict, the duty to insureds comes first, then the duty to providers. Anyone harmed by a PBM's violation of this new duty could sue in state court. The bill also clarifies that state regulation of PBMs applies only to the extent allowed under federal law.

• Creates a new legal 'pharmacy benefits manager duty' requiring PBMs to act with care, skill, fairness, and transparency toward insureds, health plans, and providers.
• Directs the Insurance Commissioner to write regulations spelling out the specific duties PBMs owe to insureds, health plans, and providers, including disclosing conflicts of interest and identifying spread pricing.
• Establishes a priority order for conflicting duties: the duty to insureds ranks above duties to health plans or providers, and the duty to providers ranks above the duty to health plans.
• Creates a private right of action, letting anyone harmed by a PBM's violation of these duties sue the PBM in state court.
• Adds and revises numerous definitions in the law, including new terms for 'spread pricing,' 'related entity,' 'insurer,' and 'pharmacy benefits management fee.'
• Clarifies that Georgia may only regulate PBMs and insurers to the extent allowed under applicable federal law.

Pharmacy benefits managers operating in Georgia, insurance companies and health plans that hire them, pharmacies and other providers that dispense or administer prescription drugs, and insured patients who receive prescription drug benefits through a PBM-administered plan.

If enacted, patients, pharmacies, and health plans in Georgia would gain a clearer legal standard to hold PBMs accountable for pricing practices like spread pricing and conflicts of interest, and could sue PBMs directly in state court rather than relying solely on state regulators to enforce the rules.

• Section 1 revises O.C.G.A. § 33-64-1's definitions, adding terms such as 'spread pricing,' 'related entity,' 'pharmacy benefits manager duty,' and 'insurer,' and expanding the definition of 'pharmacy benefits management services.'
• Section 2 revises O.C.G.A. § 33-64-13 to state that inconsistent state provisions yield to federal law and that the state may regulate PBMs or insurers only 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, each including duties of care and good faith and fair dealing.
• Section 3 also directs the Commissioner to adopt regulations on formulary design, utilization management, grievances, appeals, spread pricing transparency, and conflict-of-interest disclosure.
• Section 3 sets a priority order for conflicting duties: insured duty is primary over other duties, and provider duty is primary over health plan duty.
• Section 3 creates a private right of action allowing a person 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
• spread pricing
• patient rights