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Senate committee approves sweeping PBM transparency and oversight package
Summary
The Senate Health & Human Services committee approved a replace-all amendment to SB 665 that expands PBM registration, clarifies fiduciary obligations, requires semiannual aggregated transparency reporting on rebates and clarifies appeal/audit protections; the Department of Insurance participated closely in drafting.
The Senate Health and Human Services committee adopted a comprehensive amendment to Senate Bill 665 to tighten oversight of pharmacy benefit managers (PBMs) and increase transparency into drug pricing flows.
The amendment removes a prior carve-out for carrier-owned PBMs, requiring those entities to register and be regulated as PBMs rather than being treated as separate third-party administrators. It affirms fiduciary duties for PBMs in statute, requires aggregated transparency reporting every six months about rebates and discounts, codifies appeal protections for audit clawbacks, and provides tiered penalties for repeat violations.
Commissioner-level staff from the Department of Insurance helped draft and review the language; the department said the amendment balances transparency and respect for federal jurisdictional limits (for example, self-funded plans) while improving consumer protections. The sponsor summarized the bill's aim as methodically increasing oversight without overreaching into markets the state cannot regulate.
"We wanted as much transparency as possible," the sponsor said during committee discussion, emphasizing that aggregated rebate reporting and clearer registration will give plan sponsors and regulators better information. Department staff told the committee they will provide compliance templates and reporting guidance for PBMs and plan administrators before the measure reaches the floor.
The committee advanced SB 665 as amended; the amendment text (0895S) will travel with the bill to the Senate floor.
