HB2225

SECTION 1. The legislature finds that pharmacy benefit managers — third-party companies that manage prescription drug benefits for health insurers — play a significant role in determining access to prescription medications, reimbursement to pharmacies, and out-of-pocket costs for beneficiaries. Interim staff reports issued by the Federal Trade Commission document how pharmacy benefit managers have used spread pricing, preferential reimbursement to affiliated pharmacies, and opaque payment structures to extract excessive margins while reimbursing community pharmacies below acquisition cost, contributing to pharmacy closures and reduced access to care, particularly in rural and underserved areas.

The legislature recognizes that when pharmacies are reimbursed below cost or subjected to discriminatory contract terms, patient access, medication adherence, and public health outcomes are jeopardized. Ensuring fair participation, nondiscriminatory treatment, and adequate reimbursement for pharmacies is essential to maintaining a stable and accessible prescription drug delivery system in Hawaii.

The legislature further finds that pass-through pricing models, drug pricing transparency, and the point-of-sale application of rebates may promote accountability and better align pharmacy benefit manager incentives with the interests of patients and payors. Establishing minimum reimbursement standards tied to nationally recognized acquisition costs and professional dispensing fees helps ensure that pharmacies are compensated fairly for services rendered, rather than losing money on a significant majority of dispensed medications.

The purpose of this Act is to promote transparency and fairness in prescription drug benefit plans, prevent discriminatory and anti-competitive practices, and ensure that cost savings are passed on to beneficiaries rather than retained by pharmacy benefit managers through spread pricing.

SECTION 2. Chapter 431R, Hawaii Revised Statutes, is amended by adding four new sections to be appropriately designated and to read as follows:

"§431R-A Nondiscrimination. A pharmacy benefit manager, prescription drug benefit plan provider, prescription drug benefit plan, or third-party payor shall not discriminate against a pharmacy or pharmacist with respect to participation, referral, reimbursement of a covered service, or indemnification if a pharmacist is acting with the scope of the pharmacist's license, as permitted under state law, and the pharmacy is operating in compliance with all applicable laws and rules.

§431R-B Prescription drugs; beneficiaries; cost sharing; deductibles. (a) A beneficiary's cost sharing for a prescription drug shall be calculated at the point of sale based on a price that is reduced by an amount equal to at least one hundred per cent of all rebates that have been received, or that will be received, by the prescription drug benefit plan provider or a pharmacy benefit manager in connection with the administration or dispensing of the prescription drug. Any additional rebate in excess of the required cost sharing shall be passed on to the prescription drug benefit plan for the purpose of reducing premiums.

(b) A prescription drug benefit plan provider shall not increase a beneficiary's cost sharing percentage or ration at or after the point of sale by raising the deductible, copayment, or coinsurance, or by requiring any other out of pocket payment as a means of recouping the dispensing cost of a pharmacist or pharmacy.

(c) Any amount paid by a beneficiary for a prescription drug shall be applied to any deductible imposed on the beneficiary by the beneficiary's prescription drug benefit plan in accordance with the prescription drug benefit plan's coverage documents.

(d) As used in this section:

"Cost sharing" means any coverage limit, copayment, coinsurance, deductible, or other out-of-pocket cost obligation imposed by a prescription drug benefit plan on a beneficiary.

"Rebate" means all discounts and other negotiated price concessions paid directly or indirectly by a pharmaceutical manufacturer or other entity, other than a beneficiary, in the prescription drug supply chain to a pharmacy benefit manager, and that may be based on any of the following:

(1) A pharmaceutical manufacturer's list price for a prescription drug;

(2) Utilization;

(3) To maintain a net price for a prescription drug for a specified period of time for the pharmacy benefit manager in the event the pharmaceutical manufacturer's list price increases; or

(4) Reasonable estimates of the volume of a prescription drug that will be dispensed by a pharmacy to beneficiaries.

§431R-C Pharmacy benefit managers; reimbursement. (a) A pharmacy benefit manager shall not reimburse any pharmacy located in the State in an amount less than the amount that the pharmacy benefit manager reimburses a pharmacy benefit manager affiliate for dispensing the same prescription drug as dispensed by the pharmacy.

(b) A pharmacy benefit manager shall not reimburse any pharmacy located in the State in an amount less than the most recently published national average drug acquisition cost for a prescription drug on the date that the prescription drug is administered or dispensed. If the most recently published national average drug acquisition cost for the prescription drug is unavailable on the date that the prescription drug is administered or dispensed, a pharmacy benefit manager shall not reimburse any pharmacy located in the State in an amount less than the wholesale acquisition cost for the prescription drug on the date that the prescription drug is administered or dispensed.

(c) In addition to the reimbursement required under subsection (b), a pharmacy benefit manager shall reimburse the pharmacy or pharmacist a professional dispensing fee at the same rate as the professional dispensing fee under the Hawaii medicaid fee schedule.

(d) As used in this section:

"National average drug acquisition cost" means the monthly survey of retail community pharmacies conducted by the federal Centers for Medicare and Medicaid Services to determine average acquisition cost for medicaid covered outpatient drugs.

"Pharmacy benefit manager affiliate" means a pharmacy or pharmacist that directly or indirectly through one or more intermediates, owns or controls, is owned and controlled by, or is under common ownership or control of, a pharmacy benefit manager.

"Wholesale acquisition cost" has the same meaning as in title 42 United States Code section 1395w-3a(c)(6)(B).

§431R-D Pharmacy benefit managers; pass-through pricing; spread pricing. (a) All prescription drug benefit plans executed, amended, adjusted, or renewed on or after July 1, 2027, between a pharmacy benefit manager and a third-party payor, or between a person and a third-party payor, shall include all of the following requirements:

(1) The pharmacy benefit manager shall use pass-through pricing unless paragraph (2) applies;

(2) The pharmacy benefit manager may use direct or indirect spread pricing only if the difference between the amount the third-party payor pays the pharmacy benefit manager for a prescription drug and the amount the pharmacy benefit manager reimburses the dispensing pharmacy or dispensing health care provider for the prescription drug is passed through by the pharmacy benefit manager to the person contracted to receive third-party payor services; and

(3) Payments received by a pharmacy benefit manager for services provided by the pharmacy benefit manager to a third-party payor or a pharmacy shall be used or distributed pursuant to the pharmacy benefit manager's contract with the third-party payor or the pharmacy, or as otherwise required by law.

(b) Unless otherwise prohibited by law, subsection (a) shall supersede any contractual terms to the contrary in any contract executed, amended, adjusted, or renewed on or after July 1, 2027, between a pharmacy benefit manager and a third-party payor, or between a person and a third-party payor.

"Pass-through pricing" means a model of prescription drug pricing in which payments made by a prescription drug benefit plan provider to a pharmacy benefit manager for prescription drugs are equivalent to the payments the pharmacy benefit manager makes to the dispensing pharmacy or dispensing health care provider for the prescription drugs, including any professional dispensing fee.

"Spread pricing" means the method by which a pharmacy benefit manager charges a prescription drug benefit plan provider more for prescription drugs dispensed to a beneficiary than the amount the pharmacy benefit manager reimburses the pharmacy for dispensing prescription drugs to a beneficiary."

SECTION 3. Section 431R-1, Hawaii Revised Statutes, is amended by adding a new definition to be appropriately inserted and to read as follows:

""Third-party payor" means any entity other than a beneficiary or a health care provider that is responsible for any amount of reimbursement for a prescription drug benefit. "Third-party payor" includes prescription drug benefit plan providers and other entities that provide prescription drug coverage.

"Third-party payor" does not include:

(1) The department of human services;

(2) Managed care organizations under contract with the department of human services to provide health care coverage for Hawaii medicaid beneficiaries; or

(3) A policy or contract providing a prescription drug benefit under medicare part D (42 U.S.C. chapter 7, subchapter XVIII, part D)."

SECTION 4. Section 431R-5, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) The insurance commissioner may assess a fine of up to $10,000 for each violation by a pharmacy benefit manager or prescription drug benefit plan provider who is in violation of section 431R-2 [or], 431R-3[.], 431R-A, 431R-B, 431R-C, or 431R-D. In addition, the insurance commissioner may order the pharmacy benefit manager or prescription drug benefit plan provider to take specific affirmative corrective action or make restitution."

SECTION 5. In codifying the new sections added by section 2 of this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in designating the new sections in this Act.

SECTION 6. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 7. This Act shall take effect upon its approval.

INTRODUCED BY:	_____________________________

HOUSE OF REPRESENTATIVES	H.B. NO.	2225
THIRTY-THIRD LEGISLATURE, 2026
STATE OF HAWAII