Amends and adds to existing law to establish provisions regarding dispensing fees and to establish duties and restrictions pertaining to pharmacy benefit managers and third-party payers.

LEGISLATURE OF THE STATE OF IDAHO
Sixty-eighth Legislature Second Regular Session - 2026
IN THE SENATE
SENATE BILL NO. 1367
BY STATE AFFAIRS COMMITTEE
AN ACT	1
RELATING TO PHARMACY BENEFIT MANAGERS; AMENDING CHAPTER 3, TITLE 41, IDAHO	2
CODE, BY THE ADDITION OF A NEW SECTION 41-349A, IDAHO CODE, TO ESTABLISH	3
PROVISIONS REGARDING DISPENSING FEES; AMENDING SECTION 41-349, IDAHO	4
CODE, TO DEFINE TERMS, TO REVISE PROVISIONS REGARDING DISPENSING FEES,	5
AND TO ESTABLISH PROVISIONS REGARDING DUTIES AND RESTRICTIONS PERTAIN-	6
ING TO PHARMACY BENEFIT MANAGERS AND THIRD-PARTY PAYERS; AND DECLARING	7
AN EMERGENCY.	8
Be It Enacted by the Legislature of the State of Idaho:	9
SECTION 1. That Chapter 3, Title 41, Idaho Code, be, and the same is	10
hereby amended by the addition thereto of a NEW SECTION, to be known and des-	11
ignated as Section 41-349A, Idaho Code, and to read as follows:	12
41-349A. DISPENSING FEES. (1) A plan sponsor, pharmacy benefit man-	13
ager (PBM), or third-party payer shall ensure that reimbursement to indepen-	14
dent pharmacies for each drug dispensed is an amount that is not less than the	15
sum of the national average drug acquisition cost (NADAC) as provided for in	16
subsection (2) of this section and the professional dispensing fee as pro-	17
vided for in subsection (3) of the section.	18
(2) The NADAC shall be the published price in effect for the day that a	19
drug claim is billed by a pharmacy. However, if a particular drug does not	20
have a published NADAC, the reimbursement to an independent pharmacy shall	21
be:	22
(a) For generic drugs, one hundred percent (100%) of published whole-	23
sale acquisition costs; and	24
(b) For brand name drugs, one hundred percent (100%) of wholesale ac-	25
quisition costs.	26
(3) The minimum professional dispensing fee for independent pharmacies	27
shall be twelve dollars and thirty-five cents ($12.35), subject to an an-	28
nual increase as provided for in this subsection. On January 1 of each year,	29
every plan sponsor, PBM, and third-party payer shall increase the amount of	30
the minimum professional dispensing fee for independent pharmacies to ad-	31
just for inflation. Inflation shall be measured by the annual percentage in-	32
crease, if any, in the consumer price index for all urban consumers (CPI-U)	33
as published by the United States department of labor, bureau of labor sta-	34
tistics, for all items.	35
(4) The Idaho department of insurance shall issue a letter and guidance	36
to every plan sponsor, PBM, and third-party payer registered with the state	37
of Idaho no later than thirty (30) days after the effective date of this sec-	38
tion. All reimbursement rates shall be in full force and effect as of that	39
date, and plan sponsors, PBMs, and third-party payers shall issue additional	40
payments as needed to independent pharmacies to cover any deficiencies in	41
payment made after the effective date of this section.	42

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2
(5) The Idaho department of insurance shall issue a letter and guidance	1
to every plan sponsor, PBM, and third-party payer registered with the state	2
of Idaho no later than January 15 of each year. Such letter shall include the	3
updated dispensing fee that will become effective on March 1 of the same cal-	4
endar year.	5
(6) Annually, on March 1, plan sponsors, PBMs, and third-party payers	6
shall begin paying the updated dispensing fee as provided for in subsection	7
(5) of this section.	8
(7) In the event that an issuance date provided for pursuant to this	9
section falls on a weekend or a national holiday, the next business day shall	10
become the required date of issuance.	11
SECTION 2. That Section 41-349, Idaho Code, be, and the same is hereby	12
amended to read as follows:	13
41-349. PHARMACY BENEFIT MANAGERS. (1) As used in this section:	14
(a) "Brand name or generic effective rate" means the contractual rate	15
set forth by a pharmacy benefit manager for the reimbursement of covered	16
brand name or generic drugs, calculated using the total payments in the	17
aggregate, by drug type, during the performance period. The effective	18
rates are typically calculated as a discount from industry benchmarks,	19
such as average wholesale price or wholesale acquisition cost.	20
(b) "Dispensing fee" means a fee intended to cover reasonable costs as-	21
sociated with providing a drug to a covered person. This cost includes	22
but is not limited to the pharmacist's services and the overhead asso-	23
ciated with maintaining the facility and equipment necessary to operate	24
the pharmacy. The dispensing fee shall be set pursuant to the provi-	25
sions of section 41-349A, Idaho Code.	26
(c) "Effective rate guarantee" means the minimum ingredient cost reim-	27
bursement a pharmacy benefit manager guarantees it will pay for pharma-	28
cist services during the applicable measurement period.	29
(d) "Independent pharmacy" means any pharmacy not owned or affiliated	30
with a pharmacy benefit manager.	31
(d) (e) "Maximum allowable cost" means the maximum amount that a phar-	32
macy benefit manager will reimburse a pharmacy for the cost of a generic	33
drug.	34
(e) (f) "Maximum allowable cost appeal pricing adjustment" means a ret-	35
rospective positive payment adjustment made to a pharmacy by the phar-	36
macy benefits plan or program or by the pharmacy benefit manager pur-	37
suant to an approved maximum allowable cost appeal request submitted by	38
the same pharmacy to dispute the amount reimbursed for a drug based on	39
the pharmacy benefit manager's listed maximum allowable cost price.	40
(g) "National average drug acquisition cost" or "NADAC" means a medic-	41
aid benchmark that represents the average retail price pharmacies pay	42
to acquire prescription and over-the-counter drugs.	43
(f) (h) "Participation contract" means any agreement between a phar-	44
macy benefit manager and pharmacy for the provision and reimbursement	45
of pharmacist services and any exhibits, attachments, amendments, or	46
addendums to such agreement.	47
(g) (i) "Pass-through pricing model" means a payment model used by a	48
pharmacy benefit manager in which the payments made by the pharmacy ben-	49

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3
efits plan or program to the pharmacy benefit manager for the covered	1
outpatient drugs are:	2
(i) Equivalent to the payments the pharmacy benefit manager makes	3
to a dispensing pharmacy or provider for such drugs, including any	4
contracted professional dispensing fee between the pharmacy ben-	5
efit manager and its network of pharmacies. Such dispensing fee	6
would be paid if the pharmacy benefits plan or program was making	7
the payments directly; and	8
(ii) Passed through in their entirety by the pharmacy benefits	9
plan or program or by the pharmacy benefit manager to the pharmacy	10
or provider that dispenses the drugs, and the payments are made in	11
a manner that is not offset by any reconciliation.	12
(h) (j) "Pharmacy benefit manager" means a person or entity doing busi-	13
ness in this state that contracts with pharmacies on behalf of an in-	14
surer, third-party administrator, or managed care organization to ad-	15
minister prescription drug benefits to residents of this state.	16
(i) (k) "Spread pricing" means the practice in which a pharmacy benefit	17
manager charges a pharmacy benefits plan or program a different amount	18
for pharmacist services than the amount the pharmacy benefit manager	19
reimburses a pharmacy for such pharmacist services.	20
(j) (l) "Usual and customary price" means the amount charged to cash	21
customers for a pharmacist service exclusive of sales tax or other	22
amounts claimed.	23
(2) A person may not perform, offer to perform, or advertise any phar-	24
macy benefit management service in this state unless the person is regis-	25
tered as a pharmacy benefit manager with the department of insurance. A per-	26
son may not utilize the services of another person as a pharmacy benefit man-	27
ager if the person knows or has reason to know that the other person does not	28
have a registration with the department. Such registration must occur annu-	29
ally no later than April 1 of each year and shall be on a form prescribed by	30
the director. The department may utilize applicable sections of this title	31
to administer registration as provided in this subsection.	32
(3) A pharmacy benefit manager shall not prohibit a pharmacist or re-	33
tail pharmacy from providing a covered person information on the amount of	34
the cost share for a prescription drug and the clinical efficacy of a more	35
affordable alternative drug if one is available, and a pharmacy benefit man-	36
ager may not penalize a pharmacist or retail pharmacy for disclosing such in-	37
formation to a covered person or for selling to a covered person a more af-	38
fordable alternative if one is available.	39
(4) A pharmacy benefit manager shall not directly or indirectly charge	40
a pharmacy benefits plan or program a different amount for a prescription	41
drug's ingredient cost or dispensing fee than the amount the pharmacy ben-	42
efit manager reimburses a pharmacy for the prescription drug's ingredient	43
cost or dispensing fee where the pharmacy benefit manager retains the amount	44
of any such difference.	45
(5) A pharmacy benefit manager shall apply the same utilization review,	46
fees, copayments or cost-sharing, days allowance, and other conditions of	47
a covered person when the covered person obtains a prescription drug from a	48
pharmacy that is included in the pharmacy benefit manager's pharmacy net-	49

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work, including mail-order pharmacies and the pharmacy benefit manager's	1
owned, affiliated, or preferred pharmacies.	2
(6) A pharmacy benefit manager shall not:	3
(a) Reimburse a network pharmacy an amount less than the contract	4
price between the pharmacy benefit manager and the insurer, third-party	5
payer, or pharmacy services management organization; or	6
(b) Require or coerce a patient to use a pharmacy that is owned by or	7
affiliated with the pharmacy benefit manager.	8
(7) A pharmacy benefit manager, a third-party payer, or a discount card	9
processor shall not, directly or indirectly, charge or hold a pharmacy re-	10
sponsible for any fee, including but not limited to the following:	11
(a) A fee for submission of a claim;	12
(b) Any other claim-related fee;	13
(c) A fee for enrollment or participation in a retail pharmacy network;	14
(d) A credentialing or recredentialing fee;	15
(e) A fee for the development or management of claims processing ser-	16
vices or claims payment services; or	17
(f) A fee on remittance advice or a fee that is retroactive.	18
(8) All reimbursements to pharmacies shall be made through direct bank	19
transfers, checks, or another payment method that does not incur any pro-	20
cessing fees for the pharmacy. A check shall have a one-hundred-eighty (180)	21
day expiration to deposit.	22
(9) A pharmacy benefit manager or third-party payer shall not prohibit	23
a pharmacist or pharmacy from:	24
(a) Participating in a class action lawsuit;	25
(b) Disclosing to the plan sponsor or to the patient information re-	26
garding the adjudicated reimbursement paid to the pharmacy if the phar-	27
macist or pharmacy complies with the requirements of the federal health	28
insurance portability and accountability act of 1996, 29 U.S.C. 1181,	29
et seq.;	30
(c) Providing relevant information to a patient about the patient's	31
prescription drug order, including but not limited to the cost and clin-	32
ical efficacy of a more affordable alternative drug if one is available;	33
(d) Mailing or delivering a prescription drug to a patient as an ancil-	34
lary service of a pharmacy if the practice is not prohibited by law; or	35
(e) Charging a shipping and handling fee to a patient who has asked that	36
a prescription drug be mailed or delivered if the practice is not pro-	37
hibited by law.	38
(10) A pharmacy benefit manager or third-party payer shall not:	39
(a) Require pharmacy accreditation standards or recertification re-	40
quirements inconsistent with, more stringent than, or in addition to	41
federal and state requirements for licensure as a pharmacy in this	42
state; or	43
(b) Exclude a pharmacy from the pharmacy benefit manager's or third-	44
party payer's network based solely on the pharmacy being newly opened or	45
open for less than a defined period of time or because a license or loca-	46
tion transfer occurs, unless there is pending investigation for fraud,	47
waste, or abuse.	48
(11) A pharmacist or pharmacy that belongs to a pharmacy services admin-	49
istrative organization shall be entitled to receive a copy of a contract be-	50

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5
tween the pharmacy services administrative organization and a pharmacy ben-	1
efit manager or third-party payer on the pharmacy's or pharmacist's behalf.	2
(12) A pharmacy benefit manager or third-party payer shall provide a	3
pharmacy or pharmacist with the processor control number, bank identifi-	4
cation number, and group number for each pharmacy network established or	5
administered by a pharmacy benefit manager or third-party payer to enable	6
the pharmacy to make an informed contracting decision.	7
(5) (13) The pharmacy benefit manager shall pass along or return one	8
hundred percent (100%) of any manufacturer rebate to a pharmacy benefits	9
plan or program, including any payment, discount, incentive, fee, price	10
concession, or other remuneration.	11
(6) (14) The pharmacy benefit manager shall provide full and complete	12
disclosure of:	13
(a) The cost, price, and reimbursement of the prescription drug to each	14
health plan, payer, and pharmacy with which the pharmacy benefit man-	15
ager has a contract or agreement to provide pharmacy benefit management	16
services;	17
(b) Each fee, markup, and discount charged or imposed by the pharmacy	18
benefit manager to each health plan, payer, and pharmacy with which the	19
pharmacy benefit manager has a contract or agreement for pharmacy bene-	20
fit management services; or	21
(c) The aggregate amount of all remuneration the pharmacy benefit man-	22
ager receives from a prescription drug manufacturer for a prescription	23
drug, including any rebate, discount, administration fee, and any other	24
payment or credit obtained or agreement for pharmacy benefit management	25
services to a health plan or payer.	26
(7) (15) A pharmacy benefit manager using maximum allowable cost pric-	27
ing may place a drug on a maximum allowable cost list if the pharmacy benefit	28
manager does the following:	29
(a) Ensures that the drug:	30
(i)1. Is listed as A-rated or B-rated in the most recent ver-	31
sion of the United States food and drug administration's ap-	32
proved drug products with therapeutic equivalence evalua-	33
tions, also known as the "orange book"; or	34
2. Has an NR or NA rating or a similar rating by a nationally	35
recognized reference; and	36
(ii) Is available for purchase by pharmacies in the state from na-	37
tional or regional wholesalers and is not obsolete;	38
(b) Provides to a network pharmacy, at the time a contract is entered	39
into or renewed with the network pharmacy, the sources used to determine	40
the maximum allowable cost pricing for the maximum allowable cost list	41
specific to that provider;	42
(c) Reviews and updates maximum allowable cost price information at	43
least once every seven (7) business days to reflect any modification of	44
maximum allowable cost pricing;	45
(d) Establishes a process for eliminating products from the maximum al-	46
lowable cost list or modifying maximum allowable cost prices in a timely	47
manner to remain consistent with pricing changes and product availabil-	48
ity in the marketplace;	49

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(e) Establishes a process by which a network pharmacy, or a network	1
pharmacy's contracting agent, may appeal the reimbursement for a	2
generic drug no later than thirty (30) days after such reimbursement is	3
made; and	4
(f) Provides a process for each of its network pharmacies to readily ac-	5
cess the maximum allowable cost list specific to that provider.	6
(16) A pharmacy benefit manager or third-party payer shall not make or	7
allow any reduction in payment for pharmacy services by a pharmacy benefit	8
manager or third-party payer or directly or indirectly reduce a payment for	9
pharmacy services under a reconciliation process to an effective rate of re-	10
imbursement, including generic effective rates, brand effective rates, di-	11
rect and indirect remuneration fees, or any other reduction or aggregate re-	12
duction of payments.	13
(8) (17) No pharmacy benefit manager may retroactively deny or reduce	14
a claim for reimbursement of the cost of services after the claim has been	15
adjudicated by the pharmacy benefit manager unless:	16
(a) The adjudicated claim was submitted fraudulently or improperly; or	17
(b) The pharmacy benefit manager's payment on the adjudicated claim was	18
incorrect because the pharmacy or pharmacist had already been paid for	19
the services.	20
(9) (18) If the director finds a pharmacy benefit manager has violated	21
this section or any provision of title 41, Idaho Code, then the director may	22
subject the pharmacy benefit manager to any or all of the actions, penalties,	23
and remedies referenced in sections 41-117, 41-1016, and 41-1026, Idaho	24
Code.	25
(10) (19)(a) No later than January 1, 2025, and each year thereafter,	26
each licensed pharmacy benefit manager shall report to the director of	27
the department of insurance the following information:	28
(i) The aggregate amount of the difference between the amount	29
the pharmacy benefit manager paid each pharmacy on behalf of the	30
health plan for prescription drugs; and	31
(ii) If at any time during the reporting year the pharmacy bene-	32
fit manager moved or reassigned a prescription drug to a formulary	33
tier that has a higher cost, higher copayment, higher coinsurance,	34
higher deductible to a consumer, or lower reimbursement to a phar-	35
macy, an explanation of the reason why the drug was moved or reas-	36
signed, including whether the move or reassignment was determined	37
or requested by a prescription drug manufacturer or other entity.	38
(b) Any pharmacy benefit manager that owns, controls, or is affiliated	39
with a pharmacy shall also report any difference in reimbursement rates	40
or practices, direct and indirect remuneration fees or other price con-	41
cessions, and clawbacks between a pharmacy that is owned, controlled,	42
or affiliated with the pharmacy benefit manager and any other pharmacy.	43
(11) (20) In addition to any other requirements in this title, all con-	44
tractual arrangements executed, amended, adjusted, or renewed between a	45
pharmacy benefit manager and a pharmacy benefits plan or program must in-	46
clude, in substantial form, requirements, to the extent allowable by law,	47
to:	48
(a) Use a pass-through pricing model;	49

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(b) Exclude terms that allow for the direct or indirect engagement in	1
the practice of spread pricing;	2
(c) Ensure that funds received in relation to providing services for a	3
pharmacy benefits plan or program or a pharmacy are used or distributed	4
only pursuant to the pharmacy benefit manager's contract with the phar-	5
macy benefits plan or program or with the pharmacy or as otherwise re-	6
quired by applicable law;	7
(d) Require the pharmacy benefit manager to pass one hundred percent	8
(100%) of all prescription drug manufacturer rebates, including non-	9
resident prescription drug manufacturer rebates, received to the phar-	10
macy benefits plan or program, if the contractual arrangement delegates	11
the negotiation of rebates to the pharmacy benefit manager, for the	12
sole purpose of offsetting defined cost-sharing and reducing premiums	13
of covered persons. Rebates include any payment, discount, incentive,	14
fee, price concession, or other remuneration. Any excess rebate rev-	15
enue after the pharmacy benefit manager and the pharmacy benefits plan	16
or program have taken all actions required pursuant to this section must	17
be used for the sole purpose of offsetting copayments and deductibles of	18
covered persons;	19
(e) Include network adequacy requirements that meet or exceed medicare	20
part D program standards for convenient access to the network pharma-	21
cies and that:	22
(i) Do not limit a network to solely include affiliated pharma-	23
cies;	24
(ii) Do not require a covered person to receive a prescrip-	25
tion drug by United States mail, common carrier, local courier,	26
third-party company or delivery service, or pharmacy direct de-	27
livery unless the prescription drug cannot be acquired at any	28
retail pharmacy in the pharmacy benefit manager's network for	29
the covered person's pharmacy benefits plan or program. The	30
provisions of this subparagraph do not prohibit a pharmacy bene-	31
fit manager from operating mail order or delivery programs on an	32
opt-in basis at the sole discretion of a covered person, provided	33
that the covered person is not penalized through the imposition	34
of any additional retail cost-sharing obligations or a lower al-	35
lowed-quantity limit for choosing not to select the mail order or	36
delivery programs;	37
(iii) For the in-person administration of covered prescription	38
drugs, prohibit requiring a covered person to receive pharmacist	39
services from an affiliated pharmacy or an affiliated health care	40
provider; and	41
(iv) Prohibit offering or implementing pharmacy networks that re-	42
quire or provide a promotional item or an incentive to a covered	43
person to use an affiliated pharmacy or an affiliated health care	44
provider for the in-person administration of covered prescription	45
drugs or advertising, marketing, or promoting an affiliated phar-	46
macy to covered persons. Provided, however, a pharmacy benefit	47
manager may include an affiliated pharmacy in communications to	48
covered persons regarding network pharmacies and prices as long as	49
the pharmacy benefit manager includes information, such as links	50

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8
to all nonaffiliated network pharmacies, in such communications	1
and that the information provided is accurate and of equal promi-	2
nence. The provisions of this subparagraph may not be construed to	3
prohibit a pharmacy benefit manager from entering into an agree-	4
ment with an affiliated pharmacy to provide pharmacist services to	5
covered persons;	6
(f) Prohibit a pharmacy benefit manager from conditioning participa-	7
tion in one (1) pharmacy network based on participation in any other	8
pharmacy network or from penalizing a pharmacy for exercising its pre-	9
rogative not to participate in a specific pharmacy network;	10
(g) Prohibit a pharmacy benefit manager from instituting a network	11
that requires a pharmacy to meet accreditation standards inconsistent	12
with or more stringent than applicable federal and state requirements	13
for licensure and operation as a pharmacy in this state. However, a	14
pharmacy benefit manager may specify additional specialty networks	15
that require enhanced standards related to safety and competency	16
necessary to meet the United States food and drug administration's	17
limited distribution requirements for dispensing any drug that, on a	18
drug-by-drug basis, requires extraordinary special handling, provider	19
coordination, or clinical care or monitoring when such extraordinary	20
requirements cannot be met by a retail pharmacy. For purposes of this	21
paragraph, drugs requiring extraordinary special handling are limited	22
to drugs that are subject to a risk evaluation and mitigation strategy	23
approved by the United States food and drug administration and that:	24
(i) Require special certification of a health care provider to	25
prescribe, receive, dispense, or administer; or	26
(ii) Require special handling due to the molecular complexity	27
or cytotoxic properties of the biologic or biosimilar product or	28
drug. For participation in a specialty network, a pharmacy ben-	29
efit manager may not require a pharmacy to meet requirements for	30
participation beyond those necessary to demonstrate the phar-	31
macy's ability to dispense the drug in accordance with the United	32
States food and drug administration's approved manufacturer la-	33
beling;	34
(h) At a minimum, require the pharmacy benefit manager or pharmacy ben-	35
efits plan or program to, upon revising its formulary of covered pre-	36
scription drugs during a plan year, provide a ninety (90) day continu-	37
ity-of-care period in which the covered prescription drug that is being	38
revised from the formulary continues to be provided at the same cost for	39
the patient for a period of ninety (90) days. The ninety (90) day conti-	40
nuity-of-care period commences upon notification to the patient. This	41
requirement does not apply if the covered prescription drug:	42
(i) Has been approved and made available over the counter by the	43
United States food and drug administration and has entered the	44
commercial market as such;	45
(ii) Has been removed or withdrawn from the commercial market by	46
the manufacturer;	47
(iii) Is subject to an involuntary recall by state or federal au-	48
thorities and is no longer available on the commercial market; or	49

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(iv) Has a generic, biosimilar, or interchangeable biologic ap-	1
proved by the United States food and drug administration;	2
(i) Require that in-network pharmacies receive dispensing fees that	3
reasonably cover the costs of dispensing medications pursuant to sec-	4
tion 41-349A, Idaho Code; and	5
(j) Prohibit a pharmacy benefit manager from directly or indirectly	6
charging or holding a pharmacist or pharmacy responsible for a fee for	7
any step of or component or mechanism related to the claim adjudication	8
process, including:	9
(i) The adjudication of a pharmacy benefit claim;	10
(ii) The processing or transmission of a pharmacy benefit claim;	11
(iii) The development or management of a claim processing or adju-	12
dication network; or	13
(iv) Participation in a claim processing or adjudication network.	14
(12) (21) The requirements of subsection (11) (20) of this section shall	15
not apply to specialty drugs. For the purposes of this section, "specialty	16
drug" means:	17
(a) A drug that is subject to restricted distribution by the United	18
States food and drug administration; or	19
(b) A drug that requires special handling, provider coordination, or	20
patient education that a retail pharmacy cannot provide.	21
(13) (22) In addition to other requirements in this title, a partici-	22
pation contract executed, amended, adjusted, or renewed between a pharmacy	23
benefit manager and one (1) or more pharmacies or pharmacists must include,	24
in substantial form, to the extent allowable by law, terms that ensure com-	25
pliance with the provisions of this subsection.	26
(a) The pharmacy benefit manager shall provide a reasonable adminis-	27
trative appeal procedure to allow a pharmacy or pharmacist to challenge	28
the maximum allowable cost pricing information and the reimbursement	29
made under the maximum allowable cost as defined in subsection (1)(d)	30
of this section for a specific drug as being below the acquisition cost	31
available to the challenging pharmacy or pharmacist.	32
(b) The administrative appeal procedure must include a telephone num-	33
ber and email address, or a website, for the purpose of submitting the	34
administrative appeal. The appeal may be submitted by the pharmacy or	35
an agent of the pharmacy directly to the pharmacy benefit manager or	36
through a pharmacy service administration organization. The pharmacy	37
or pharmacist must be given at least thirty (30) business days after	38
a maximum allowable cost update or after an adjudication for an elec-	39
tronic claim or reimbursement for a nonelectronic claim to file the	40
administrative appeal.	41
(c) The pharmacy benefit manager must respond to the administrative ap-	42
peal within thirty (30) business days after receipt of the appeal.	43
(i) If the appeal is upheld, the pharmacy benefit manager must:	44
1. Update the maximum allowable cost pricing information to	45
at least the acquisition cost available to the pharmacy;	46
2. Permit the pharmacy or pharmacist to reverse and rebill	47
the claim in question;	48
3. Provide to the pharmacy or pharmacist the national drug	49
code on which the increase or change is based; and	50

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10
4. Make the increase or change effective for each similarly	1
situated pharmacy or pharmacist who is subject to the appli-	2
cable maximum allowable cost pricing information; or	3
(ii) If the appeal is denied, the pharmacy benefit manager must	4
provide to the pharmacy or pharmacist the national drug code and	5
the name of the national or regional pharmaceutical wholesalers	6
operating in this state that have the drug currently in stock at a	7
price below the maximum allowable cost pricing information.	8
(d) Every ninety (90) days, a pharmacy benefit manager shall report to	9
the department the total number of appeals received and denied in the	10
preceding ninety (90) day period, with an explanation or reason for each	11
denial, for each specific drug for which an appeal was submitted pur-	12
suant to this subsection.	13
(14) (23) In addition to other prohibitions in this section, a pharmacy	14
benefit manager may not do any of the following:	15
(a) Prohibit, restrict, or penalize in any way a pharmacy or pharmacist	16
from disclosing to any person any information that the pharmacy or phar-	17
macist deems appropriate, including but not limited to information re-	18
garding any of the following:	19
(i) The nature of treatment, risks, or alternatives thereto;	20
(ii) The availability of alternate treatment, consultations, or	21
tests;	22
(iii) The decision of utilization reviewers or similar persons to	23
authorize or deny pharmacist services;	24
(iv) The process used to authorize or deny pharmacist services or	25
benefits;	26
(v) Information on financial incentives and structures used by	27
the pharmacy benefits plan or program;	28
(vi) Information that may reduce the costs of pharmacist ser-	29
vices;	30
(vii) Whether the cost-sharing obligation exceeds the retail	31
price for a covered prescription drug and the availability of a	32
more affordable alternative drug;	33
(viii) A decision by the pharmacy to refuse to accept pharmacy ben-	34
efit manager payment for the dispensing of an individual prescrip-	35
tion on the basis of an aggregate pharmacy benefit manager payment	36
of less than the pharmacy's costs to provide the service; or	37
(ix) The financial details of a prescription claim;	38
(b) Prohibit, restrict, or penalize in any way a pharmacy or pharma-	39
cist from disclosing information to the department, law enforcement, or	40
state and federal governmental officials, provided that the recipient	41
of the information represents that it has the authority, to the extent	42
provided by state or federal law, to maintain proprietary information	43
as confidential and before disclosure of information designated as con-	44
fidential, the pharmacist or pharmacy marks as confidential any docu-	45
ment in which the information appears or requests confidential treat-	46
ment for any oral communication of the information;	47
(c) Communicate at the point-of-sale, or otherwise require, a cost-	48
sharing obligation for the covered person in an amount that exceeds the	49
lesser of:	50

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11
(i) The applicable cost-sharing amount under the applicable	1
pharmacy benefits plan or program; or	2
(ii) The amount that will be retained by the pharmacy;	3
(d) Transfer or share records relative to prescription information	4
containing patient-identifiable or prescriber-identifiable data	5
to an affiliated pharmacy for any commercial purpose other than the	6
limited purposes of facilitating pharmacy reimbursement, formulary	7
compliance, or utilization review on behalf of the applicable pharmacy	8
benefits plan or program;	9
(e) Fail to make any payment due to a pharmacy for an adjudicated claim	10
with a date of service before the effective date of a pharmacy's ter-	11
mination from a pharmacy benefit network, unless payments are withheld	12
because of fraud, waste, or abuse on the part of the pharmacy or except	13
as otherwise required by law; or	14
(f) Terminate the contract of, penalize, or disadvantage a pharmacist	15
or pharmacy solely due to a pharmacist or pharmacy:	16
(i) Disclosing information about pharmacy benefit manager prac-	17
tices in accordance with this section;	18
(ii) Exercising any of its prerogatives pursuant to this section;	19
or	20
(iii) Sharing any portion, or all, of the pharmacy benefit manager	21
contract with the department of insurance pursuant to a complaint	22
or a query regarding whether the contract is in compliance with the	23
provisions of this section.	24
(15) (24) In complying with the requirements of this section, a pharmacy	25
benefit manager or its agents, and the director or the director's agents,	26
shall not directly or indirectly publish or otherwise disclose any infor-	27
mation reported to the director under this section that would reveal: the	28
identity of a specific pharmacy benefits plan, program, or pharmaceutical	29
manufacturer; the prices charged for a specific drug or class of drugs; the	30
amount of any rebates provided for a specific drug or class of drugs or the	31
pharmaceutical manufacturer; or information that would otherwise have the	32
potential to compromise the financial, competitive, or proprietary nature	33
of such information. Any such information shall be protected from disclo-	34
sure as confidential and proprietary and shall not be regarded as a public	35
record pursuant to section 74-101, Idaho Code. A pharmacy benefit manager	36
shall impose the confidentiality protections and requirements of this sec-	37
tion on any agent or downstream third party that performs health care or ad-	38
ministrative services on behalf of the pharmacy benefit manager that may re-	39
ceive or have access to such information, and the director shall impose the	40
confidentiality protections and requirements of this section on any agent	41
or downstream third party directly or indirectly involved in the administra-	42
tion of this section that may receive or have access to such information.	43
SECTION 3. An emergency existing therefor, which emergency is hereby	44
declared to exist, this act shall be in full force and effect on and after its	45
passage and approval.	46

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