LDI issues Directive 2-57, says PBMs must meet NADAC plus $9 standard by March 1, 2026

The Louisiana Department of Insurance on Feb. 13 issued Directive 2-57, telling pharmacy benefit managers they must ensure pharmacy reimbursements meet a National Average Drug Acquisition Cost (NADAC)-based ingredient price plus a combined $9 markup and professional dispensing fee to satisfy the statute's "fair and reasonable" standard. Commissioner Tim Temple presented the directive to the Pharmacy Benefit Manager Advisory Council on Feb. 19, saying LDI's data call and market review found formulas paying below that combined amount were inconsistent with industry practice and therefore not fair and reasonable under Act 4 74.

LDI Deputy Commissioner Frank O'Pelka told the council the law that took effect Jan. 1, 2026, did not itself set a dispensing-fee floor. The department said it waited for PBM implementation of the NADAC-based ingredient component and then collected market data (formal data call began Jan. 26) before issuing the directive. O'Pelka said LDI's role was to apply the statutory fair-and-reasonable standard to observed compensation programs, not to legislate a fee.

Why it matters: the directive creates an explicit compliance target for PBMs and a March 1, 2026, deadline for contractual and operational changes. LDI said the directive is intended as an enforcement standard that identifies outlier PBM compensation programs and clarifies pharmacists'ability to appeal underpayments.

What LDI said about enforcement: staff told the council the department is pursuing an attorney general opinion on whether the directive can be applied retroactively to Jan. 1. LDI described a 15-day pharmacist appeal process for claims paid below acquisition cost, and a range of regulatory remedies including market-conduct examinations, cease-and-desist orders, license suspension or revocation, and fines. Department staff cited general fine authority (described in testimony as $1,000 per occurrence, with a statutory cap discussed at $100,000 per six months) and noted an additional unfair-trade statute that can produce higher penalties (testimony referenced up to $500,000 in certain circumstances).

Data, audits and industry outreach: LDI said responses to its data call covered the majority of claim volume in the state and that the department has three active market-conduct investigations. The agency also said it met informally with major PBMs (witnesses referenced Express Scripts, Optum and CVS) to confirm awareness and cooperative implementation steps.

Points of dispute: Several council members and pharmacy witnesses pressed LDI on why it relied on an OGB/commercial practice benchmark rather than the state Medicaid dispensing fee (testimony referenced a Medicaid dispensing fee amount of $11.81). LDI replied that Medicaid's reimbursement basis differs from commercial practice and that the department based its fairness determination on Louisiana commercial market practice and historical data.

Next steps: LDI must finalize how it will operationalize the directive, respond to the attorney general's opinion on retroactivity, and continue auditing and complaint investigations. PBMs have until March 1, 2026, to make changes LDI deems necessary to comply with the standard.