Pennsylvania SB 1186: An Act amending the act of November 21, 2016 (P.L.1318, No.169), known as the Pharmacy Audit Integrity and Transparency Act, in preliminary provisions, further providing for definitions; and, in pharmacy benefits manager contracts, providing for State pharmacy benefits manager.

Bill Text

PRINTER'S NO. 1500
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No. 1186
Session of
2026
INTRODUCED BY BOSCOLA, J. WARD, COLLETT, TARTAGLIONE, DUSH,
PISCIOTTANO, CAPPELLETTI, ARGALL AND KEARNEY, MARCH 12, 2026
REFERRED TO HEALTH AND HUMAN SERVICES, MARCH 12, 2026
AN ACT
Amending the act of November 21, 2016 (P.L.1318, No.169),
entitled, as amended, "An act providing for pharmacy audit
procedures, for registration of pharmacy benefits managers
and auditing entities, for maximum allowable cost
transparency, for prescription drugs reimbursed under the
PACE and PACENET program and for pharmacy benefit managers
contract requirements and prohibited activities; and making
related repeals," in preliminary provisions, further
providing for definitions; and, in pharmacy benefits manager
contracts, providing for State pharmacy benefits manager.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. The definitions of "specialty drug" and "spread
pricing" in section 103 of the act of November 21, 2016
(P.L.1318, No.169), known as the Pharmacy Audit Integrity and
Transparency Act, added July 17, 2024 (P.L.852, No.77), are
amended to read:
Section 103. Definitions.
The following words and phrases when used in this act shall
have the meanings given to them in this section unless the
context clearly indicates otherwise:
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"Specialty drug." [Either of the following:
(1) A prescription drug prescribed to a covered
individual with a cost that meets or exceeds the cost of a
drug on the specialty tier of Medicare Part D under 42 CFR
423.104(d)(2)(iv) (relating to requirements related to
qualified prescription drug coverage) and meets three or more
of the following criteria:
(i) The drug requires specialized product handling
or administration by the dispensing pharmacy.
(ii) The drug requires specialized clinical care,
including, but not limited to, frequent dosing
adjustments to the prescription drug, clinical monitoring
or expanded patient service, intensive patient counseling
and ongoing clinical support, such as individualized
disease or therapy management to support patient outcomes
for a covered individual.
(iii) The drug is prescribed for a covered
individual with a rare medical condition, complex or
chronic medical condition or life-threatening medical
condition.
(iv) The prescription drug has a limited or
exclusive distribution and is not typically stocked or
dispensed by a retail pharmacy.
(2) A prescription drug that is prescribed to a covered
individual and that is listed as a specialty drug on the
medical assistance fee-for-service specialty pharmacy drug
list.] Prescription medication used to treat complex or
chronic conditions that requires special handling, provider
coordination or patient education and monitoring for which a
retail community pharmacy is not reasonably equipped to
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handle, store, provide counseling regarding use and safely
distribute.
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"Spread pricing." A model of prescription drug pricing in
which the PBM charges a health benefit plan or health insurer a
contracted price for prescription drugs and the contracted price
for the prescription drugs [differs from] is more than the
amount the PBM directly or indirectly pays the pharmacist or
pharmacy for prescription drugs and related pharmacist services.
Section 2. The act is amended by adding a section to read:
Section 605. State pharmacy benefits manager.
(a) Duty of Department of Human Services .-- The Department of
Human Services, by July 31, 2026, shall select and enter into a
master contract with a single third-party administrator to serve
as the State pharmacy benefits manager to administer all
pharmacy benefits for Medicaid recipients, including those
enrolled in a managed care organization by such date with whom
the Department of Human Services contracts for the delivery of
Medicaid services.
(b) Requirement .-- Each managed care contract entered into or
renewed by the Department of Human Services for the delivery of
Medicaid services by a managed care organization shall require
the managed care organization to contract with and utilize the
State pharmacy benefits manager for the purpose of administering
all pharmacy benefits for Medicaid recipients enrolled with the
managed care organization.
(c) Contractor compliance .--The State pharmacy benefits
manager shall comply with the provisions of this act unless
otherwise prohibited by Federal law.
(d) Procurement process.--
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(1) The Secretary of Human Services must, through a
competitive procurement process that is in compliance with
paragraph (2) , select a State pharmacy benefits manager to
comply with subsection (e).
(2) The competitive procurement process shall:
(i) accept app