STAND. COM. REP. NO. 2918

Honolulu, Hawaii

RE: S.B. No. 2047

S.D. 2

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Third State Legislature

Regular Session of 2026

State of Hawaii

Sir:

Your Committees on Commerce and Consumer Protection and Ways and Means, to which was referred S.B. No. 2047, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO PHARMACY BENEFIT MANAGERS,"

beg leave to report as follows:

The purpose and intent of this measure is to:

(1) Establish requirements for pharmacy benefit managers that reimburse contracting pharmacies for drugs on a maximum allowable cost basis, including maximum allowable cost lists, maximum allowable cost reports, and a complaint process;

(2) Require pharmacy benefit managers to disclose lower-priced equivalent drugs when a maximum allowable cost is upheld on appeal;

(3) Allow contracting pharmacies to reverse and rebill claims if a maximum allowable cost is denied on appeal;

(4) Authorize the Insurance Commissioner to adopt rules and assess fines for violations; and

(5) Appropriate funds.

Your Committees received testimony in support of this measure from the State Health Planning and Development Agency and Hawaii Pharmacists Association.

Your Committees received comments on this measure from the Insurance Division of the Department of Commerce and Consumer Affairs, Hawaiʻi Primary Care Association, and Pharmaceutical Care Management Association.

Your Committees find that maximum allowable cost lists for widely-available, multiple-source generic drug reimbursements to pharmacies, which are administered by pharmacy benefit managers, are intended to be a general pricing benchmark. However, since regulatory oversight was repealed in 2023 due to administrative issues, pharmacy benefit managers have been able to use opaque methodologies when setting maximum allowable cost pricing. This can result in reimbursements to pharmacies below cost price, higher drug costs for plan sponsors and patients, and copay clawbacks. This measure would reinstate enforceable regulatory oversight of maximum allowable cost pricing, overseen by the Insurance Commissioner rather than the Department of Health, to improve transparency and fairness in prescription drug reimbursements for pharmacies and consumers.

Your Committees have amended this measure by:

(1) Replacing language to clarify the definitions of:

(A) "Contracting pharmacy" to mean a non-affiliated pharmacy that is not part of a regional or national chain; and

(B) "Maximum allowable cost list" to mean a listing of drugs or other methodology used by a pharmacy benefits manager, directly or indirectly, setting the maximum allowable payment to a pharmacy or pharmacist for certain drugs and to include certain information; and

(2) Making technical, nonsubstantive amendments for the purposes of clarity and consistency.

As affirmed by the records of votes of the members of your Committees on Commerce and Consumer Protection and Ways and Means that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 2047, S.D. 1, as amended herein, and recommend that it pass Third Reading in the form attached hereto as S.B. No. 2047, S.D. 2.

Respectfully submitted on behalf of the members of the Committees on Commerce and Consumer Protection and Ways and Means,

________________________________ DONOVAN M. DELA CRUZ, Chair

________________________________ JARRETT KEOHOKALOLE, Chair