Representative Dieter told the Financial Institutions Insurance Technology Committee that Substitute House Bill 229 would establish licensing, oversight and transparency requirements for pharmacy benefit managers, or PBMs, under the Department of Insurance.

Dieter said PBMs "manage and administer prescription drug benefits" and that their operations are largely hidden from employers, patients and local pharmacies. "Today, 3 PBMs process approximately 80% of all pharmacy claims and just 6 PBMs control over 90% of the market," she said, arguing the bill would require PBMs to disclose contractual arrangements, fees, rebates and related financial flows to plan sponsors and would authorize audits by the superintendent of insurance.

Dieter said the bill does not set drug prices or add dispensing fees but provides licensing, audit authority and reporting to plan sponsors. She told the committee the bill received unanimous votes in the House general-government committee and on the House floor and that she had negotiated changes that produced support or neutrality from stakeholders.

Senator Shavazz asked whether audits would be mandatory on a regular schedule; Dieter responded that audits would be conducted by the Department of Insurance when there is a complaint or suspicion of noncompliance but that PBMs would be required to provide annual accounts to plan sponsors. She said some implementation details would be subject to rulemaking.

The Financial Institutions Insurance Technology Committee held a first hearing on the substitute bill; no committee vote occurred during the session.