HB 527

Enrolled Copy  H.B. 527
1Pharmacy Pricing Amendments
                                      2026 GENERAL SESSION
                                           STATE OF UTAH
                                      Chief Sponsor: Katy Hall
                                   Senate Sponsor: Evan J. Vickers
2
3  LONG TITLE
4  General Description:
5      This bill amends provisions related to pharmacy benefits.
6  Highlighted Provisions:
7      This bill:
8      ▸ defines terms;
9      ▸ amends provisions related to drug maximum allowable cost, including regarding lists,
10  appeals, and claims;
11      ▸ specifies penalties; and
12      ▸ provides the Insurance Department rulemaking authority.
13  Money Appropriated in this Bill:
14      None
15  Other Special Clauses:
16      None
17  Utah Code Sections Affected:
18  AMENDS:
19      31A-46-102, as last amended by Laws of Utah 2025, Chapter 525
20      31A-46-303, as last amended by Laws of Utah 2020, Chapters 198, 275
21      31A-46-401, as enacted by Laws of Utah 2019, Chapter 241
22  ENACTS:
23      31A-46-103, Utah Code Annotated 1953
24
25  Be it enacted by the Legislature of the state of Utah:
26Section 1. Section 31A-46-102 is amended to read:
2731A-46-102 . Definitions.
H.B. 527  Enrolled Copy
28      As used in this chapter:
29   (1) "340B drug" means a drug purchased through the 340B drug discount program by a
30340B entity.
31   (2) "340B drug discount program" means the 340B drug discount program described in 42
32U.S.C. Sec. 256b.
33   (3) "340B entity" means:
34(a) an entity participating in the 340B drug discount program;
35(b) a pharmacy of an entity participating in the 340B drug discount program; or
36(c) a pharmacy contracting with an entity participating in the 340B drug discount
37program to dispense drugs purchased through the 340B drug discount program.
38   (4) "Administrative fee" means any payment, other than a rebate, that a pharmaceutical
39manufacturer makes directly or indirectly to a pharmacy benefit manager.
40   (5) "Allowable claim amount" means the amount paid by an insurer under the customer's
41health benefit plan.
42   (6) "Contracting insurer" means an insurer with whom a pharmacy benefit manager
43contracts to provide a pharmacy benefit management service.
44   (7) "Cost share" means the amount paid by an insured customer under the customer's health
45benefit plan.
46   (8) "Direct or indirect remuneration" means any adjustment in the total compensation:
47(a) received by a pharmacy from a pharmacy benefit manager for the sale of a drug,
48device, or other product or service; and
49(b) that is determined after the sale of the product or service.
50   (9) "Dispense" means the same as that term is defined in Section 58-17b-102.
51   (10) "Drug" means the same as that term is defined in Section 58-17b-102.
52   (11) "Insurer" means the same as that term is defined in Section 31A-22-636.
53   (12) "Maximum allowable cost" means:
54(a) a maximum reimbursement amount for a group of pharmaceutically and
55therapeutically equivalent drugs; or
56(b) any similar reimbursement amount that is used by a pharmacy benefit manager to
57reimburse pharmacies for multiple source drugs.
58   (13) "Medicaid program" means the same as that term is defined in Section 26B-3-101.
59   (14) "Obsolete" means a product that may be listed in national drug pricing compendia but
60is no longer available to be dispensed based on the expiration date of the last lot
61manufactured.
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62  (15) "Patient counseling" means the same as that term is defined in Section 58-17b-102.
63  (16) "Pharmacy acquisition cost" means the net amount that a pharmaceutical wholesaler
64      charges for a pharmaceutical product.
65  [(16)] (17) "Pharmaceutical facility" means the same as that term is defined in Section
66      58-17b-102.
67  [(17)] (18) "Pharmaceutical manufacturer" means a pharmaceutical facility that
68      manufactures prescription drugs.
69  [(18)] (19) "Pharmacist" means the same as that term is defined in Section 58-17b-102.
70  [(19)] (20) "Pharmacy" means the same as that term is defined in Section 58-17b-102.
71  [(20)] (21) "Pharmacy benefits management service" means any of the following services
72      provided to a health benefit plan, or to a participant of a health benefit plan:
73      (a) negotiating the amount to be paid by a health benefit plan for a prescription drug; or
74      (b) administering or managing a prescription drug benefit provided by the health benefit
75plan for the benefit of a participant of the health benefit plan, including administering
76or managing:
77(i) an out-of-state mail service pharmacy;
78(ii) a specialty pharmacy;
79(iii) claims processing;
80(iv) payment of a claim;
81(v) retail network management;
82(vi) clinical formulary development;
83(vii) clinical formulary management services;
84(viii) rebate contracting;
85(ix) rebate administration;
86(x) a participant compliance program;
87(xi) a therapeutic intervention program;
88(xii) a disease management program; or
89(xiii) a service that is similar to, or related to, a service described in Subsection
90(20)(a) or this Subsection (20)(b).
91  [(21)] (22) "Pharmacy benefit manager" means a person licensed under this chapter to
92      provide a pharmacy benefits management service.
93  [(22)] (23) "Pharmacy service" means a product, good, or service provided to an individual
94      by a pharmacy or pharmacist.
95  [(23)] (24) "Pharmacy services administration organization" means an entity that contracts
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96with a pharmacy to assist with third-party payer interactions and administrative services
97related to third-party payer interactions, including:
98(a) contracting with a pharmacy benefit manager on behalf of the pharmacy; and
99(b) managing a pharmacy's claims payments from third-party payers.
100   [(24)] (25) "Pharmacy service entity" means:
101(a) a pharmacy services administration organization; or
102(b) a pharmacy benefit manager.
103   [(25)] (26) "Prescription device" means the same as that term is defined in Section
10458-17b-102.
105   [(26)] (27) "Prescription drug" means the same as that term is defined in Section 58-17b-102.
106   [(27)] (28)(a) "Rebate" means a refund, discount, or other price concession that is paid by
107a pharmaceutical manufacturer to a pharmacy benefit manager based on a
108prescription drug's utilization or effectiveness.
109(b) "Rebate" does not include an administrative fee.
110   [(28)] (29)(a) "Reimbursement report" means a report on the adjustment in total
111compensation for a claim.
112(b) "Reimbursement report" does not include a report on adjustments made pursuant to a
113pharmacy audit or reprocessing.
114   [(29)] (30) "Retail pharmacy" means the same as that term is defined in Section 58-17b-102.
115   [(30)] (31) "Sale" means a prescription drug or prescription device claim covered by a
116health benefit plan.
117   [(31)] (32) "Spread pricing" means the practice in which a pharmacy benefit manager
118charges a health benefit plan a different amount for pharmacist services than the amount
119the pharmacy benefit manager reimburses a pharmacy for pharmacist services.
120   [(32)] (33) "Wholesale acquisition cost" means the same as that term is defined in 42 U.S.C.
121Sec. 1395w-3a.
122Section 2. Section 31A-46-103 is enacted to read:
12331A-46-103 . Rulemaking.
124      In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
125   department may make rules to implement this chapter.
126Section 3. Section 31A-46-303 is amended to read:
12731A-46-303 . Insurer and pharmacy benefit management services -- Registration
128   -- Maximum allowable cost -- Audit restrictions.
129   (1) An insurer and an insurer's pharmacy benefit manager is subject to the pharmacy audit
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130      provisions of Section 58-17b-622.
131  (2) A pharmacy benefit manager shall not use maximum allowable cost as a basis for
132      reimbursement to a pharmacy unless:
133      (a) the drug is listed as "A" or "B" rated in the most recent version of the United States
134Food and Drug Administration's approved drug products with therapeutic equivalent
135evaluations, also known as the "Orange Book," or has an "NR" or "NA" rating or
136similar rating by a nationally recognized reference; and
137      (b) the drug is:
138(i) generally available for purchase in this state from a national or regional
139wholesaler; and
140(ii) not obsolete.
141  (3) The maximum allowable cost may be determined using comparable and current data on
142      drug prices obtained from multiple nationally recognized, comprehensive data sources,
143      including wholesalers, drug file vendors, and pharmaceutical manufacturers for drugs
144      that are available for purchase by pharmacies in the state.
145  (4) For every drug for which the pharmacy benefit manager uses maximum allowable cost
146      to reimburse a contracted pharmacy, the pharmacy benefit manager shall:
147      (a) make a list available to a network pharmacy upon request in a format that:
148(i) is electronic;
149(ii) is computer accessible and searchable;
150(iii) identifies all drugs for which maximum allowable costs have been established;
151and
152(iv) for each drug specifies:
153(A) the national drug code; and
154(B) the maximum allowable cost;
155      (b) include in the contract with the pharmacy information identifying the national drug
156pricing compendia and other data sources used to obtain the drug price data;
157      [(b)] (c) review and make necessary adjustments to the maximum allowable cost, using
158the most recent data sources identified in Subsection [(4)(a)] (4)(b), at least once per
159week;
160      [(c)] (d) provide a process for the contracted pharmacy to appeal the maximum allowable
161cost in accordance with Subsection (5); and
162      [(d)] (e) include in each contract with a contracted pharmacy a process to obtain an
163update to the pharmacy product pricing files used to reimburse the pharmacy in a
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164format that is readily available and accessible.
165   (5)(a) The right to appeal in Subsection [(4)(c)] (4)(d) shall be:
166(i) limited to 21 days following the initial claim adjudication; and
167(ii) investigated and resolved by the pharmacy benefit manager within 14 business
168days.
169(b) A pharmacy benefit manager shall:
170(i) provide as part of the appeals process:
171(A) a dedicated telephone number, electronic mail address, and website for the
172purpose of submitting appeals; and
173(B) the ability for a pharmacy to submit an appeal directly to the pharmacy benefit
174manager or through the pharmacy's pharmacy services administrative
175organization; and
176(ii) allow a pharmacy to submit documentation in support of the pharmacy's appeal
177on paper or electronically.
178(c) If an appeal is denied, the pharmacy benefit manager shall provide the contracted
179pharmacy[ with] :
180(i) the reason for the denial[ and] ;
181(ii) the identification of the national drug code of the drug that may be purchased by
182the pharmacy at a price at or below the price determined by the pharmacy benefit
183manager[.] ; and
184(iii) the specific basis upon which the pharmacy benefit manager can show that the
185drug is available for purchase at or below the maximum allowable cost.
186(d) If an appeal is upheld or the pharmacy benefit manager cannot show the drug is
187available for purchase at or below the maximum allowable cost for a similarly
188situated pharmacy as the pharmacy that submitted the appeal, the pharmacy benefit
189manager shall:
190(i) make an adjustment for the pharmacy that appealed;
191(ii) permit the dispensing pharmacy to reverse the claim and resubmit an adjusted
192claim without an additional charge; and
193(iii) consider additional action consistent with the outcome of the appeal.
194   (6) The contract with each pharmacy shall contain a dispute resolution mechanism in the
195event either party breaches the terms or conditions of the contract.
196   (7) This section does not apply to a pharmacy benefit manager when the pharmacy benefit
197manager is providing pharmacy benefit management services on behalf of the Medicaid
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198      program.
199Section 4. Section 31A-46-401 is amended to read:
20031A-46-401 . Penalties.
201     [A person that violates a provision of this chapter is subject to the penalties
202  described in Section 31A-2-308.]
203  (1) The commissioner may order a pharmacy benefit manager who violates this chapter to
204      forfeit to the state not more than $2,500 for each violation.
205  (2) Each day the violation continues is a separate violation.
206Section 5. Effective Date.
207  This bill takes effect on May 6, 2026.
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