ModifiedFlorida Office of Insurance RegulationPolicy N/A

Prescription drug price increase reporting and PBM oversight

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Establishes reporting requirements for prescription drug manufacturers regarding price increases and expands regulatory/oversight provisions for pharmacy benefit managers (PBMs) and related permits; affects prescription drug manufacturers, nonresident manufacturers, PBMs, pharmacies, and relevant state offices in Florida.

Policy Summary

PayerFlorida Office of Insurance Regulation

PolicyPrescription drug price increase reporting and PBM oversight

Policy CodePolicy N/A

Change TypeStatutory additions & PBM regulatory expansion

Effective DateJul 1, 2023

Next Review DateN/A

Key ActionManufacturers must notify the Department of Business and Professional Regulation on a prescribed form on the effective date of any reportable drug price increase and submit an annual report by the specified date.

SourceLink

POLICY UPDATE CHANGES

Creates section 499.026 requiring manufacturer notification and annual reports of reportable drug price increases and specifying form, submission timing, and related procedures.

Adds a prohibited act for failing to accurately and timely submit reportable drug price increase forms, reports, and documents as required by s. 499.026.

Requires permits for prescription drug manufacturers and nonresident manufacturers to be subject to the requirements of s. 499.026.

Multiple provisions expanding regulation of pharmacy benefit managers, including definition revisions, audit provisions, certificate-of-authority requirements to act as an administrator, reporting, investigations, examinations, and recordkeeping.

A new section 626.8825 creating 'Pharmacy benefit manager transparency and accountability' with definitions including 'adjudication transaction fee'.

Section 626.8805 now requires PBMs to obtain a certificate of authority to act as an administrator, with a limited transition period and civil fines for noncompliance.

PBM applicants must submit biographical statements, background reports, fingerprints, and disclosure of related complaints or discipline.

PBMs must attest to compliance with network requirements in section 626.8825 beginning January 1, 2024, and make contracts and subcontracts available for inspection.

Administrators must disclose ownership interests or affiliations with insurers; PBMs must additionally disclose ownership or affiliation with pharmacies and changes must be reported within 60 days.

1new statutory section created (499.026)

29prohibited act added (s.499.005 subsection)

multiplePBM oversight sections amended

annualmanufacturer reporting cadence

30%price-change threshold

$10,000PBM noncompliance fine/day

Coverage, Reporting, and PBM Requirements

Manufacturer reporting and permit compliance

Reporting and compliance criteria for manufacturers and permit applicants

Manufacturer must notify the Department of Business and Professional Regulation of each reportable drug price increase on the department-prescribed form on the effective date of the increase.

Manufacturer must submit an annual report to the department by April 1 each year listing all prescription drugs affected by reportable drug price increases during the previous calendar year and required details.

Department may request additional information from the manufacturer before approving the annual report.

Prescription drug manufacturer and nonresident prescription drug manufacturer permits are subject to the requirements of section 499.026.

The Agency for Health Care Administration will post submitted forms and reports on its website, except information marked as trade secret under specified paragraphs, and the compiled information must be made available to the Governor and Legislature upon request.

Failure to accurately complete and timely submit reportable drug price increase forms, reports, and documents as required by s.499.026 is an unlawful act under s.499.005(29).

PBM oversight and enforcement

PBM regulatory and contractual requirements

Division of Consumer Services must designate an employee as primary contact for consumer complaints involving PBMs and refer certain complaints to the Office of Insurance Regulation.

PBMs operating as administrators must obtain a certificate of authority; PBMs registered with the office as of June 30, 2023 may operate without a certificate until January 1, 2024; failure to hold a certificate on or after January 1, 2024 may result in fines up to $10,000 per violation per day.

PBM applicants for certificate of authority must submit biographical statements, independent background reports, fingerprints for referenced individuals, and self-disclosure of administrative, civil, or criminal complaints/discipline related to insurance laws.

PBMs must identify ownership affiliations to the office and report any changes in such information within specified timeframes.

The Office of Insurance Regulation may investigate and examine PBMs, conduct biennial reviews, require production of records, take statements under oath, charge associated examination expenses to the PBM or applicant, and submit annual reports of examinations to the Governor and Legislature.

Reporting criteria

Manufacturer reporting criteria for reportable drug price increases:

Calculate percentage change using most recent month price data from wholesale price guides or other publications of drug or biological product pricing data (wholesale acquisition cost definition applies).

An increase that meets the 30 percent threshold (calculated as specified) is a reportable drug price increase and must be notified to the department on the department-prescribed form on the effective date of the increase.

The department-prescribed notification form must require the manufacturer to specify the listed items as required by statute.

Manufacturer report contents

Manufacturer annual reporting and form contents

List proprietary and nonproprietary names for each prescription drug affected by a reportable drug price increase.

Provide dollar amount and percentage increase of each reportable drug price increase relative to the previous wholesale acquisition cost.

If multiple forms were filed for the same drug, report the percentage increase from the earliest filed form to the most recent filed form.

Describe the intended uses of each prescription drug and whether the manufacturer benefits from market exclusivity for the drug.

State the length of time the prescription drug has been available for purchase.

List factors contributing to each reportable drug price increase with an estimated percentage of influence for each factor that totals 100 percent and provide a description/justification for each factor; department may request additional information before approving the report.

Report any action filed to extend a patent after the first extension has been granted (if applicable).

Pharmacy audit criteria

Pharmacy audit and appeal process requirements when audits are conducted by insurers/PBMs

Provide at least 7 calendar days' notice before the initial onsite audit for each audit cycle, except as provided in subsection 3 exceptions.

Do not schedule an onsite audit during the first 3 calendar days of a month unless the pharmacist consents.

Limit the audit lookback period to 24 months after the date a claim was submitted to or adjudicated by the entity.

Conduct audits that require clinical or professional judgment in consultation with, or allow the audit to be conducted by, a pharmacist.

Allow pharmacies to use written and verifiable records of hospitals, physicians, or other authorized practitioners to validate pharmacy records, transmitted by any means in accordance with law.

Reimburse the pharmacy for a claim retroactively denied due to a clerical, typographical, scrivener's, or computer error if the prescription was properly dispensed, unless a pattern of errors, fraud, or actual financial loss exists.

Provide the pharmacy with a copy of the preliminary audit report within 120 days after conclusion of the audit; allow 10 business days for the pharmacy to produce documentation to address discrepancies; provide the final audit report within 6 months after delivery of the preliminary report.

Calculate any recoupment or penalties based on actual overpayments and not by extrapolation accounting practices.

PBM certification and penalties

PBM certificate of authority application requirements and enforcement

It is unlawful to act as an administrator in Florida without a valid certificate of authority; PBMs registered with the office as of June 30, 2023 may continue to operate until January 1, 2024 without a certificate.

Applicants that are PBMs must submit a complete biographical statement, an independent background report, fingerprints for referenced individuals, and a self-disclosure of any administrative, civil, or criminal complaints/settlements/discipline related to insurance laws.

A person who, on or after January 1, 2024, operates as a PBM without holding a certificate of authority is subject to a fine of $10,000 per violation per day; the office must report by January 15, 2024 on whether PBMs operating on January 1, 2024 obtained certificates as required.

PBM-plan contract mandatory terms

Contract requirements for PBM and pharmacy benefits plan/program agreements executed/changed on or after July 1, 2023 (applicable to benefits on or after January 1, 2024):

Contracts executed, amended, adjusted, or renewed on or after July 1, 2023 that are applicable to pharmacy benefits covered on or after January 1, 2024 must include terms, in substantial form, that ensure compliance with specified requirements and, except as not allowed by law, shall supersede any contrary contractual terms.

Use a pass-through pricing model consistent with the prohibition on spread pricing.

Exclude terms that allow direct or indirect engagement in spread pricing unless the PBM passes along the entire amount of such difference to the pharmacy benefits plan or program (i.e., no retained spread unless fully passed through).

Ensure that funds received in relation to providing services for a pharmacy benefits plan/program or a pharmacy are used or distributed only pursuant to the pharmacy benefit (restricted use/distribution of such funds).

These contractual requirements apply to arrangements executed, amended, adjusted, or renewed on or after July 1, 2023 and applicable to pharmacy benefits covered on or after January 1, 2024.

Coverage and operational criteria

Key coverage and operational criteria extracted from this part:

PBMs must not engage in spread pricing unless the entire difference is passed to the pharmacy benefits plan/program; rebates must be used to offset premiums and cost-sharing, and any excess rebate revenue must be used to offset copayments and deductibles of covered persons (excluding certain programs such as Medicaid managed care).

Contracts must include network adequacy requirements meeting or exceeding Medicare Part D standards; networks may not be limited solely to affiliated pharmacies and PBMs must offer provider contracts to licensed pharmacies within the geographic service area, including designated essential providers and specialty centers as specified.

PBMs may not require a covered person to use mail-order or delivery unless the drug cannot be acquired at any retail pharmacy in the network; mail-order/delivery programs may be offered on an opt-in basis without penalty to the covered person.

For in-person administration of covered prescription drugs, PBMs may not require the covered person to receive pharmacist services from an affiliated pharmacy or affiliated health care provider, nor may they offer impermissible incentives to use affiliated providers; communications must list nonaffiliated options with equal prominence.

Specialty networks may require enhanced standards only as necessary to meet FDA limited distribution requirements or extraordinary special handling; participation requirements cannot exceed what is necessary to demonstrate ability to dispense per FDA labeling.

When a formulary drug is revised during a plan year, the plan must provide a 60-day continuity-of-care period at the same patient cost commencing upon notification, except in limited circumstances (OTC switches, manufacturer withdrawal, involuntary recall/unavailability).

Beginning January 1, 2024 and annually thereafter, pharmacy benefits plans/programs must submit an annual attestation to the office under penalty of perjury certifying compliance with these subsection requirements.

PBM - participating pharmacy/pharmacist contract obligations

Contract terms requirement

Participation contracts between a PBM and one or more pharmacies or pharmacists executed, amended, adjusted, or renewed on or after July 1, 2023 that apply to pharmacist services on or after January 1, 2024 must include, in substantial form, terms that ensure compliance with the listed statutory requirements and, except as not allowed by law, those terms shall supersede any contractual terms to the contrary.

PBM contractual and operational criteria

Requirements and prohibitions PBMs must follow regarding reimbursement communication, financial recoupments, pharmacy rights, and MAC appeals.

PBM must provide basis of reimbursement information for the specific network applicable to the claim used to calculate reimbursement, including the applicable network reimbursement ID or plan ID as defined in the NCPDP Telecommunication Standard Implementation Guide.

Basis of reimbursement information must be communicated during reconciliation in accordance with NCPDP standards, be accurate, correspond with the applicable network rate, and be relied upon by the pharmacy.

PBMs may not charge, withhold, or recoup direct or indirect remuneration fees, dispensing fees, effective rate adjustments, or other monetary recoupments via reconciliation or offsets, except limited enumerated exceptions (incentive payments, recoupment for erroneous claims/fraud/waste/abuse, claims adjudicated in error, MAC appeal pricing adjustments, or audit adjustments pursuant to s.624.491 and certain state program returns).

PBMs may not unilaterally change participation contract terms.

Unless prohibited by law, PBMs may not prohibit pharmacies/pharmacists from offering mail/delivery services on an opt-in basis, mailing/delivering a prescription upon patient request, or charging disclosed shipping/handling fees (which may not be reimbursable by the plan); PBMs must provide a pharmacy, upon request, a list of plans/programs in which it participates and update that list within 7 days.

Electronic Remittance Advice must include claim-level payment adjustments and sufficient detail (e.g., pharmacy NCPDP or NPI identifier, date of service, prescription number, refill number, adjustment code, transaction amount) to reconcile debits or credits.

PBMs must provide a reasonable administrative appeal procedure to allow a pharmacy or pharmacist to challenge MAC pricing determinations; pharmacies have at least 30 business days to file an appeal after a MAC update or adjudication and PBM must respond within 30 business days.

If an appeal is upheld, PBM must update MAC pricing to at least the acquisition cost available to the pharmacy, permit reversal and rebilling of the claim, provide the NDC on which the change is based, and make the change effective for similarly situated pharmacies/pharmacists.

If an appeal is denied, PBM must provide the pharmacy or pharmacist the national drug code (NDC) and the name of national or regional pharmaceutical wholesalers operating in the state that have the drug currently in stock at a price below the MAC.

PBM disclosure and reporting requirements

PBM operational requirements for disclosures and reporting related to MAC appeals:

When a pharmacy's MAC appeal is denied, the PBM must provide the pharmacy or pharmacist the national drug code and the name of national or regional pharmaceutical wholesalers in the state that have the drug in stock at a price below the MAC.

Every 90 days, the PBM shall report to the office the total number of appeals received and denied in the preceding 90-day period, with an explanation or reason for each denial for each specific drug for which an appeal was filed.

Information items (a)–(g)

Limited information that must be provided to covered persons includes:

The nature of treatment, risks, or alternatives.

The availability of alternate treatment, consultations, or tests.

Decisions of utilization reviewers or similar persons to authorize or deny pharmacist services.

The process used to authorize or deny pharmacist services or benefits.

Information on financial incentives and structures used by the pharmacy benefits plan or program.

Information that may reduce the costs of pharmacist services.

Whether the cost-sharing obligation exceeds the retail price for a covered prescription drug and availability of a more affordable alternative drug pursuant to s. 465.0244.

Disclosure and non-penalization requirements

Covered persons must be provided certain information and pharmacies/pharmacists may not be penalized for disclosures.

Plans must provide covered persons information on services or benefits, financial incentives and structures used by the pharmacy benefits plan or program, information that may reduce the costs of pharmacist services, and whether cost-sharing exceeds retail price and availability of more affordable alternatives (see s. 465.0244).

Plans may not prohibit, restrict, or penalize a pharmacy or pharmacist from disclosing information to the office or to covered persons regarding the above items.

Codes, Thresholds, and Key Numeric Values

N/Amixed

No clinical or billing codes specified in this portion of the document.

WAC definitionmixed

Wholesale acquisition cost defined as the manufacturer's list price for the prescription drug or biological product to wholesalers or direct purchasers in the United States, not including prompt pay or other discounts, rebates, or reductions in price, for the most recent month for which the information is available.

Disclosure and trade secret handlingmixed

Information marked as a trade secret under specified paragraphs may be withheld from public posting; other submitted information may not claim trade-secret exemption under s.119.0715.

Defined term: Adjudication transaction feemixed

'Adjudication transaction fee' means a fee charged by the pharmacy benefit manager to the pharmacy for electronic claim submissions.

Not applicablemixed

No billing or clinical codes provided in this excerpt.

N/A (administrative definitions)mixed

Administrative definitions (e.g., direct and indirect remuneration fees, dispensing fee, effective rate guarantee) only; no clinical procedure or billing codes specified.

Rebatesmixed

References to manufacturer rebates and their required use to offset premiums, cost-sharing, and to offset copayments and deductibles; no specific NDCs or numeric codes listed.

Identifiers required in MAC appeals and reimbursement communicationNDC

NDC	National Drug Code must be provided when updating MAC pricing, for appeals, and when communicating acquisition sources below MAC pricing.

Drug identifier required on disclosureNDC

NDC	National Drug Code for the drug identified in a denied appeal must be provided to the pharmacy or pharmacist.

Drug identification for pricing transparencyNDC

NDC	National Drug Code to be provided for drugs priced below maximum allowable cost (MAC) as part of transparency and appeal-denial disclosures.

inv-26: Reporting frequency — Annual (manufacturers submit reports each year by a specified date)

Reporting frequencyManufacturers must submit annual reports to the department by a specified date each year (annual cadence)

Notification timingOn the effective date of each reportable drug price increase the manufacturer must notify the department on the department-prescribed form

Public postingDepartment submits forms and reports to the Agency for Health Care Administration for posting; certain trade-secret information will not be posted

inv-27: 30 percent threshold — Calculation based on wholesale acquisition cost at end of 3-year period compared to beginning of same 3-year period

Calculation basisCalculate the 30% threshold using the wholesale acquisition cost (WAC) in effect at the end of the 3-year period compared to the WAC at the beginning of the same 3-year period

Price sourceWAC is the manufacturer's list price to wholesalers or direct purchasers, not including prompt-pay discounts, rebates, or reductions

Data monthUse the most recent month for which WAC information is available as reported in wholesale price guides or other pricing publications

inv-28: price_increase_threshold — 30% increase in wholesale acquisition cost over a 3-year period

Threshold value30% increase in wholesale acquisition cost over a 3-year period (end vs beginning of same 3-year period)

WAC definitionWholesale acquisition cost means the manufacturer's list price to wholesalers or direct purchasers in the U.S., excluding prompt-pay or other discounts, rebates, or reductions

Data sourceUse WAC as reported in wholesale price guides or other publications of drug pricing data for the most recent month available

inv-29: Reportable price increase threshold — 30 percent change using most recent month data from wholesale price guides

Reportable thresholdA reportable drug price increase is evaluated against a 30% threshold using price information from wholesale price guides or other pricing publications

Notification requirementIf increase meets the 30% threshold, manufacturer must notify the department on the prescribed form on the effective date

Form contentsThe prescribed form must require the manufacturer to specify required details (see statute for full list)

inv-30: Reportable price increase threshold — 30% (used in calculating threshold)

Reportable change threshold30% (used in calculating whether a price increase is reportable)

Calculation periodComparison is made over a 3-year period using wholesale acquisition cost values

Source guidancePrice data taken from wholesale price guides or other publications for the most recent month available

inv-31: Audit lookback limit — 24 months after claim submission/adjudication

Audit lookback limitAudit period limited to 24 months after the date a claim is submitted to or adjudicated by the entity

Advance noticeExcept as provided, auditors must notify the pharmacy at least 7 calendar days before initial onsite audit

Clinical auditsAudits requiring clinical/professional judgment must be conducted in consultation with or by a pharmacist

inv-32: N/A — No thresholds or numeric limits in this excerpt

No numeric thresholds in excerptThis excerpt contains definitions and requirements but no additional numeric thresholds or limits

Definitions presentIncludes defined terms such as 'course of therapy' and 'manufacturer' but no numeric limits here

Refer to thresholds sectionNumeric thresholds (e.g., 30% threshold) are specified elsewhere in the statute text

inv-33: Contract effective/coverage dates — Contracts executed/amended/renewed on or after July 1, 2023 applicable to benefits on or after Jan 1, 2024

Contract effective/coverage datesParticipation contracts executed, amended, adjusted, or renewed on or after July 1, 2023 that apply to pharmacist services on or after January 1, 2024 must include required terms

Applicability to benefitsRequirements apply to pharmacy benefits covered on or after January 1, 2024

Contract supersessionSuch contractual terms shall supersede any contractual terms to the contrary except to the extent not allowed by law

inv-34: continuity_of_care_days — 60

Continuity-of-care period60-day continuity-of-care period must be provided when a formulary drug is revised during a plan year

CommencementThe 60-day period commences upon notification to the patient

ExceptionsExceptions include OTC switches, market withdrawals by manufacturer, or involuntary recall/unavailability as specified in statute

inv-35: Contract applicability threshold date — July 1, 2023

Contract applicability threshold dateContracts executed, amended, adjusted, or renewed on or after July 1, 2023 are subject to the listed requirements

Applies to pharmacist servicesApplies to contracts that govern pharmacist services on or after January 1, 2024

Substantial form requirementParticipation contracts must include required terms in substantial form to ensure compliance

inv-36: Appeal filing window — 30 business days

Appeal filing windowPharmacy or pharmacist must be given at least 30 business days after a MAC update or after adjudication to file an administrative appeal

PBM response timeThe pharmacy benefit manager must respond to the administrative appeal within 30 business days after receipt

Appeal contact methodsAppeal procedure must include a telephone number and e-mail address or a website for submitting appeals

inv-37: reporting cadence — Every 90 days

Reporting cadence (appeals)Pharmacy benefit managers must report appeals data to the office every 90 days (total appeals received and denied in the preceding 90-day period)

Report contentReports must include an explanation or reason for each denial and be specific to each drug for which an appeal was filed

Quarterly scheduleReporting interval is every 90 days to the Office of Insurance Regulation

inv-38: Reporting interval — Every 90 days

Reporting intervalEvery 90 days (PBMs shall report total number of appeals received and denied in the preceding 90-day period)

Denial explanationsEach report must include an explanation or reason for each denial

Drug-specific detailReporting must be provided for each specific drug for which an appeal was filed

Actions Required by Manufacturers, PBMs, and Pharmacies

Documentation Required

Manufacturer notification and annual reporting

Manufacturers must notify the Department of Business and Professional Regulation of each reportable drug price increase on the effective date of the increase using a form prescribed by the department; manufacturers must also submit annual reports to the department by the specified annual date. The department will submit the forms and reports to the Agency for Health Care Administration for posting, but the agency shall not post information marked as a trade secret; the agency must compile submitted information for the Governor and Legislature upon request.

Notification required on the effective date of each reportable drug price increase using the department-prescribed form
Annual report submission to the department by the specified date each year
Agency for Health Care Administration will post forms/reports except information designated as trade secret
Department may request additional information from manufacturer before approving the report (see statute)

Note

Definition — course of therapy (30‑day standard)

'Course of therapy' is defined as the recommended daily dose units of a prescription drug pursuant to its prescribing label for 30 days, or the recommended daily dose units pursuant to its prescribing label for a normal course of treatment which is less than 30 days.

Standard reference period: 30 days
Alternate shorter-course reference when the normal course is less than 30 days

Note

Definition — manufacturer and permit scope

'Manufacturer' means a person holding a prescription drug manufacturer permit or a nonresident prescription drug manufacturer permit under s. 499.01; such permitholders are subject to the reporting requirements in s. 499.026.

Manufacturer permit and nonresident manufacturer permit holders are within scope
Permit applications are amended to reference new reporting obligations

Documentation Required

Permit application definitions and obligations

Permit application language incorporates the 'course of therapy' and manufacturer definitions and makes prescription drug manufacturer and nonresident manufacturer permits subject to the reportable drug price increase requirements of s. 499.026.

Permit holders must comply with s. 499.026 reporting requirements
Definitions used in permit applications include 'course of therapy' and 'manufacturer' as stated

Prior Authorization

Manufacturer notification on effective date (form required)

On the effective date of a reportable drug price increase, the manufacturer must provide notification of each reportable increase to the department on the department-prescribed form; the form must require the manufacturer to specify the enumerated information detailed in the statute.

Notification must be submitted on the department-prescribed form on the effective date
The prescribed form requires the manufacturer to specify all listed information (see statute for fields)

Documentation Required

Manufacturer annual report contents and submission

Manufacturers must submit annual reports to the department by the statute's specified date (annual filing); the form and report contents must include the detailed fields required by statute and the department may request additional information prior to approving a report.

Annual report due on the statutory date (see statute)
Report must list affected drugs, dollar and percentage increases, intended uses, market exclusivity status, time available for purchase, contributing factors with percentage influence totaling 100%, and justifications

Prior Authorization

PBM certificate of authority — registration and transition

Pharmacy benefit managers operating in Florida must register and obtain a certificate of authority to act as an administrator; PBMs registered with the office as of June 30, 2023 may operate without a certificate until January 1, 2024.

PBMs must hold a valid certificate of authority to act as an administrator after Jan 1, 2024
Registered PBMs as of 6/30/2023 have a transitional allowance until 1/1/2024

Documentation Required

Consumer complaint responses and pharmacy audit procedures

Division may require licensed persons or entities to respond in writing within 20 days to a written request for documents and information concerning a consumer complaint; audits of pharmacies by insurers or PBMs must follow statutory notice, timing, duration, clinical consultation, validation, and report timelines.

Respond to Division written requests within 20 days
If conducting audits: provide at least 7 days' notice, avoid first 3 calendar days of month without consent, limit audit lookback to 24 months, use pharmacist consultation for clinical judgments, allow verifiable external records, reimburse certain retroactive denials, provide preliminary report within 120 days, allow 10 business days to respond, and provide final report within 6 months

Denial Risk

Certificate of authority enforcement and penalties

It is unlawful to act as an administrator (including operating as a PBM) in Florida after January 1, 2024 without a certificate of authority; failure to hold the certificate after that date exposes the PBM to civil fines of $10,000 per violation per day.

Deadline to hold certificate of authority: Jan 1, 2024
Penalty for noncompliance after that date: $10,000 per violation per day

Documentation Required

Inspection and attestation obligations for PBM applicants

Applicants that are PBMs must make copies of contracts and subcontracts available for inspection by the office and must attest, beginning Jan 1, 2024, to compliance with the network requirements in s. 626.8825.

Make all contracts relating to administrator services available for inspection
PBM applicants must provide contract templates with pharmacies and all supporting subcontracts
PBMs must attest to compliance with s. 626.8825 network requirements

Documentation Required

Definition — adjudication transaction fee

'Adjudication transaction fee' is defined as a fee charged by the pharmacy benefit manager to the pharmacy for electronic claim submissions.

Term applies to fees for electronic claim submission transactions charged by PBMs

Denial Risk

Definition and restriction — affiliated pharmacy

'Affiliated pharmacy' is defined as a pharmacy that shares common ownership with a pharmacy benefit manager (definition text appears in statute); PBMs may not require a covered person to receive in-person pharmacist services from an affiliated pharmacy or affiliated health care provider.

Affiliated pharmacy: pharmacy sharing common ownership with PBM (statutory definition)
Prohibits requiring covered persons to receive in-person administration from an affiliated pharmacy or affiliated provider

Prior Authorization

Network composition and provider contract offer

PBMs may not limit pharmacy networks solely to affiliated pharmacies; PBMs must offer participation/provider contracts to licensed pharmacies physically located within the plan's geographic service area, including specified essential providers and specialty centers.

Networks cannot be restricted to affiliated pharmacies only
PBMs must offer contracts to licensed pharmacies in the geographic service area, including designated essential providers, cancer centers of excellence, organ transplant hospitals, specialty children's hospitals, and regional perinatal intensive care centers as specified

Billing Rule

Prohibition on conditioning network participation

PBMs shall not condition participation in one pharmacy network on participation in another network, and may not penalize a pharmacy for choosing not to participate in an additional network.

Prohibits tying participation across networks or imposing penalties for nonparticipation

Documentation Required

Mail‑order and delivery requirements

A PBM may not require a covered person to use mail-order, delivery, or pharmacy direct delivery unless the drug cannot be acquired at any retail pharmacy in the PBM's network; PBMs may operate mail-order or delivery programs on an opt-in basis provided the covered person is not penalized through additional cost-sharing or lower allowed-quantity limits.

Mail-order/delivery may only be required when no retail network access exists
Mail-order/delivery may be offered as opt-in without penalizing the covered person

Documentation Required

Required contract terms for pharmacist services

Participation contracts executed, amended, adjusted, or renewed on or after July 1, 2023 that apply to pharmacist services on or after January 1, 2024 between a PBM and pharmacies or pharmacists must include, in substantial form, the statutory terms ensuring compliance with the listed requirements.

Contract effective/coverage trigger: contracts acted on or after July 1, 2023 for pharmacist services effective Jan 1, 2024
Required contract language must be included in substantial form and supersede contrary terms to the extent allowed by law

Prior Authorization

MAC administrative appeal procedure and timelines

PBMs must provide a reasonable administrative MAC appeal procedure allowing a pharmacy or pharmacist to challenge MAC pricing determinations; the appeal must include contact methods and permit filing by the pharmacy within at least 30 business days after a MAC update or adjudication, and the PBM must respond within 30 business days.

Appeal submission methods: telephone, email, website, or via agent/pharmacy service admin org
Filing window: at least 30 business days after MAC update or adjudication
PBM response time: 30 business days

Documentation Required

Denied-appeal disclosure — NDC and wholesaler information

If a MAC appeal is denied, the PBM must provide the pharmacy or pharmacist the National Drug Code (NDC) and the name of the national or regional pharmaceutical wholesalers operating in the state that have the drug in stock at a price below the MAC.

Denied-appeal disclosure must include the NDC and wholesaler name(s) with the drug available below MAC

Documentation Required

Quarterly appeals reporting to the office

Every 90 days, a PBM shall report to the office the total number of appeals received and denied in the preceding 90-day period, including an explanation or reason for each denial and counts for each specific drug for which an appeal was filed.

Reporting cadence: every 90 days
Report must include total appeals received and denied, with reasons for denials, broken out by specific drug

Documentation Required

MAC transparency to pharmacies — NDC and wholesaler disclosure

When a pharmacy's MAC appeal is denied or when providing MAC transparency for drugs priced below MAC, the PBM must provide the pharmacy or pharmacist the National Drug Code (NDC) and the name of the national or regional pharmaceutical wholesalers in this state that have the drug currently in stock at a price below the MAC.

NDC and wholesaler names must be provided for drugs below MAC to enable verification and potential rebilling

Documentation Required

Prohibition on restricting pharmacy or pharmacist disclosures

Plans and PBMs may not prohibit, restrict, or penalize a pharmacy or pharmacist from disclosing information to the office or to covered persons about services, financial incentives, cost‑reduction options, or whether cost‑sharing exceeds retail price and availability of more affordable alternatives.

Prohibits penalizing pharmacies/pharmacists for disclosures to the office or covered persons
Required disclosure topics include financial incentives, structures, cost‑reduction options, and whether cost‑sharing exceeds retail price

Note

Key Definitions

inv-63: Course of therapy — 'Course of therapy' means recommended daily dose units for 30 days or normal course if shorter

Course of therapy (standard)Means the recommended daily dose units of a prescription drug pursuant to its prescribing label for 30 days

Course of therapy (shorter courses)If the normal course of treatment is less than 30 days, 'course of therapy' means the recommended daily dose units for that shorter course

Usage in statuteDefinition used to determine course-of-therapy references in permit and reporting requirements

inv-64: Pharmacy benefit manager / Administrator (summary) — Revised definition summary

PBM / Administrator definition (summary)'Pharmacy benefit manager' means a person or entity doing business in this state which contracts to administer prescription drug benefits for a pharmacy benefits plan or program; 'administrator' must hold a certificate of authority to act as an administrator

Adjudication transaction feeDefined as a fee charged by the pharmacy benefit manager to the pharmacy for electronic claim submissions

Certification requirementPBMs operating as administrators must obtain a certificate of authority and submit required application materials

inv-65: course of therapy — recommended daily dose units per prescribing label for 30 days or shorter course

Course of therapy (prescribing label)Recommended daily dose units per prescribing label for 30 days or for the normal course if less than 30 days

Application to reportingUsed to standardize quantity calculations in manufacturer reporting and permit contexts

Cross-referenceAppears in permit application and reportable price increase definitions

inv-66: manufacturer — A person holding a prescription drug manufacturer permit or a nonresident prescription drug (holder)

Manufacturer definition'Manufacturer' means a person holding a prescription drug manufacturer permit or a nonresident prescription drug manufacturer permit under s. 499.01

Permit applicabilityManufacturer permitholders are subject to the reporting requirements in s. 499.026

Statutory contextDefinition used where permit application requirements reference price increase reporting

inv-67: Course of therapy — alternate location of same definition

Course of therapy (alt location)Definition reiterates recommended daily dose units for 30 days or shorter normal course as used elsewhere in the statute

Multiple occurrencesDefinition appears in multiple sections related to permits and reporting

ConsistencySame operative meaning across permit and reporting provisions

inv-69: Wholesale acquisition cost (WAC) — manufacturer's list price to wholesalers or direct purchasers

Wholesale acquisition cost (WAC)WAC means the manufacturer's list price for the prescription drug or biological product to wholesalers or direct purchasers in the U.S., not including prompt-pay or other discounts, rebates, or reductions, for the most recent month available

Use in calculationsWAC is the data point used to compute the 30% threshold for reportable price increases

Source guidanceWAC values are taken from wholesale price guides or other pricing publications of drug or biological product pricing data

inv-70: wholesale acquisition cost — duplicate/related WAC definition

WAC definition (duplicate)Wholesale acquisition cost means the manufacturer's list price to wholesalers or direct purchasers in the U.S., excluding prompt-pay discounts, rebates, or reductions, for the most recent month available

Role in thresholdUsed as the basis for calculating percentage change over the 3-year comparison period

Reported sourcesValues reported in wholesale price guides or other publications of pricing data

inv-71: reportable drug price increase — defined with 30% threshold and data sources

Reportable drug price increase definitionA reportable drug price increase is an increase evaluated against a 30% threshold using price information reported in wholesale price guides or other pricing publications

Notification and reportingManufacturers must notify the department on the effective date via the prescribed form and submit annual reports listing affected drugs and increase details

Form and report requirementsForm must require specified information; annual report due April 1 (see statute for full list)

inv-72: Pharmacy benefit manager — definition of PBM doing business in the state and contracting to administer prescription drug benefits

PBM definition'Pharmacy benefit manager' means a person or entity doing business in this state which contracts to administer prescription drug benefits on behalf of a pharmacy benefits plan or program (includes claims processing, rebate administration, formulary management, mail-order programs, etc.)

Administrator certificateEntities acting as administrators must hold a certificate of authority; PBMs registered as of June 30, 2023 have a transition until Jan 1, 2024

Scope of servicesDefinition includes pharmacy claims processing, managing networks, reimbursement, and related services

inv-73: Administrator (certificate requirement) — Any person acting as an administrator must have certificate of authority; transitional language for PBMs

Administrator certificate requirementAny person acting as or holding out as an administrator in the state must have a certificate of authority; PBMs operating as administrators must obtain such certificate

Application materialsPBM applicants must submit biographical statements, independent background reports, fingerprints, and self-disclosure of complaints or discipline

Transition provisionPBMs registered with the office as of June 30, 2023 may operate until Jan 1, 2024 without the certificate

inv-74: Adjudication transaction fee — definition reference

Adjudication transaction fee definition'Adjudication transaction fee' means a fee charged by the pharmacy benefit manager to the pharmacy for electronic claim submissions

ContextDefined within the PBM transparency and accountability section (s. 626.8825)

ImplicationReferenced in prohibitions on recoupments and reconciliation practices elsewhere in the statute

inv-76: Affiliated pharmacy — partial definition

Affiliated pharmacy (partial)'Affiliated pharmacy' means a pharmacy that, either directly or indirectly through one or more intermediaries, shares common ownership with a pharmacy benefit manager (definition text appears in statute)

Contract restrictionsStatute prohibits limiting networks solely to affiliated pharmacies and conditioning participation on other network participation

Communications requirementIf including affiliated pharmacies in communications, PBMs must include nonaffiliated options with equal prominence

inv-79: Direct and indirect remuneration fees — definition reference

Direct and indirect remuneration feesDefined as price concessions paid retrospectively to the PBM by the pharmacy that cannot be calculated at point of sale (including discounts, chargebacks, rebates, coupons, etc.)

Pass-through pricing modelDefined as a model where payments made by the plan to the PBM are equivalent to payments the PBM makes to dispensing pharmacies and passed through in entirety

Rebate definition'Rebate' includes all payments that accrue to a PBM or its client or affiliated GPO from a manufacturer, including discounts, administration fees, credits, incentives, or penalties

inv-80: Pass-through pricing model — definition reference

Pass-through pricing modelRequires that PBM-plan contracts use a pass-through pricing model and prohibit retained spread unless fully passed through to the plan

Rebate useManufacturer rebates received must be used to offset premiums and cost-sharing; any excess must offset copayments and deductibles

Spread pricing prohibitionSpread pricing is prohibited unless the PBM passes the entire difference to the pharmacy benefits plan/program

inv-89: appeal — definition reference (denied appeal disclosures and NDC requirement)

Denied appeal disclosureIf an appeal is denied, the PBM must provide the pharmacy or pharmacist the national drug code (NDC) and the name of national or regional wholesalers in the state that have the drug in stock below the MAC

MAC transparencyPBMs must provide NDC and wholesaler names for drugs priced below MAC when requested or on denial

Appeals reportingPBMs must report appeal totals and denials to the office every 90 days

inv-90: NDC — National Drug Code definition reference

NDC requirementPBM must provide the National Drug Code (NDC) to the pharmacy or pharmacist when an appeal is denied or when MAC transparency is required

Wholesaler namesPBM must also provide the name of national or regional pharmaceutical wholesalers operating in the state that have the drug in stock at a price below MAC

PurposeSupports pharmacy ability to rebill or obtain product at acquisition cost when appeals are upheld or for verification when denied

inv-92: Required pharmacy benefit disclosures — Information to be provided to covered persons (list summary)

Required pharmacy benefit disclosures (summary)Covered persons must be provided limited information including nature of treatment, availability of alternatives, decision/process used to authorize or deny services, financial incentives/structures, options to reduce costs, and whether cost-sharing exceeds retail

Non-penalizationPlans may not prohibit, restrict, or penalize a pharmacy or pharmacist from disclosing this information to the office or covered persons

Statutory cross-referenceDisclosure includes whether a more affordable alternative is available pursuant to s. 465.0244

Policy Changes and Effective Dates

2023-07-01effective_date

New reporting and public posting requirements for manufacturer drug price increases (creation of s.499.026) and expanded PBM provisions became effective as of July 1, 2023.

2023-07-01statutory_change

Addition of unlawful act for failure to accurately and timely submit reportable drug price increase forms and reports (addition of subsection (29) to s.499.005).

2023-07-01permit_update

Prescription drug manufacturer and nonresident manufacturer permits made subject to the new reporting requirements in s.499.026.

2023-07-01pmb_regulation_addedLatest

Comprehensive PBM regulatory provisions added, including certificate-of-authority requirements, expanded definitions, reporting, audits, and enforcement authority.

Policy Summary

PayerFlorida Office of Insurance Regulation

PolicyPrescription drug price increase reporting and PBM oversight

Policy CodePolicy N/A

Change TypeStatutory additions & PBM regulatory expansion

Effective DateJul 1, 2023

Next Review DateN/A

SourceLink

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Prescription drug price increase reporting and PBM oversight

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Coverage, Reporting, and PBM Requirements

Manufacturer reporting and permit compliance

Reporting and compliance criteria for manufacturers and permit applicants

Manufacturer must notify the Department of Business and Professional Regulation of each reportable drug price increase on the department-prescribed form on the effective date of the increase.

Department may request additional information from the manufacturer before approving the annual report.

Prescription drug manufacturer and nonresident prescription drug manufacturer permits are subject to the requirements of section 499.026.

Failure to accurately complete and timely submit reportable drug price increase forms, reports, and documents as required by s.499.026 is an unlawful act under s.499.005(29).

PBM oversight and enforcement

PBM regulatory and contractual requirements

Division of Consumer Services must designate an employee as primary contact for consumer complaints involving PBMs and refer certain complaints to the Office of Insurance Regulation.

PBMs must identify ownership affiliations to the office and report any changes in such information within specified timeframes.

Reporting criteria

Manufacturer reporting criteria for reportable drug price increases:

The department-prescribed notification form must require the manufacturer to specify the listed items as required by statute.

Manufacturer report contents

Manufacturer annual reporting and form contents

List proprietary and nonproprietary names for each prescription drug affected by a reportable drug price increase.

Provide dollar amount and percentage increase of each reportable drug price increase relative to the previous wholesale acquisition cost.

If multiple forms were filed for the same drug, report the percentage increase from the earliest filed form to the most recent filed form.

Describe the intended uses of each prescription drug and whether the manufacturer benefits from market exclusivity for the drug.

State the length of time the prescription drug has been available for purchase.

Report any action filed to extend a patent after the first extension has been granted (if applicable).

Pharmacy audit criteria

Pharmacy audit and appeal process requirements when audits are conducted by insurers/PBMs

Provide at least 7 calendar days' notice before the initial onsite audit for each audit cycle, except as provided in subsection 3 exceptions.

Do not schedule an onsite audit during the first 3 calendar days of a month unless the pharmacist consents.

Limit the audit lookback period to 24 months after the date a claim was submitted to or adjudicated by the entity.

Conduct audits that require clinical or professional judgment in consultation with, or allow the audit to be conducted by, a pharmacist.

Allow pharmacies to use written and verifiable records of hospitals, physicians, or other authorized practitioners to validate pharmacy records, transmitted by any means in accordance with law.

Calculate any recoupment or penalties based on actual overpayments and not by extrapolation accounting practices.

PBM certification and penalties

PBM certificate of authority application requirements and enforcement

PBM-plan contract mandatory terms

Contract requirements for PBM and pharmacy benefits plan/program agreements executed/changed on or after July 1, 2023 (applicable to benefits on or after January 1, 2024):

Use a pass-through pricing model consistent with the prohibition on spread pricing.

These contractual requirements apply to arrangements executed, amended, adjusted, or renewed on or after July 1, 2023 and applicable to pharmacy benefits covered on or after January 1, 2024.

Coverage and operational criteria

Key coverage and operational criteria extracted from this part:

PBM - participating pharmacy/pharmacist contract obligations

Contract terms requirement

PBM contractual and operational criteria

Requirements and prohibitions PBMs must follow regarding reimbursement communication, financial recoupments, pharmacy rights, and MAC appeals.

PBMs may not unilaterally change participation contract terms.

PBM disclosure and reporting requirements

PBM operational requirements for disclosures and reporting related to MAC appeals:

Information items (a)–(g)

Limited information that must be provided to covered persons includes:

The nature of treatment, risks, or alternatives.

The availability of alternate treatment, consultations, or tests.

Decisions of utilization reviewers or similar persons to authorize or deny pharmacist services.

The process used to authorize or deny pharmacist services or benefits.

Information on financial incentives and structures used by the pharmacy benefits plan or program.

Information that may reduce the costs of pharmacist services.

Whether the cost-sharing obligation exceeds the retail price for a covered prescription drug and availability of a more affordable alternative drug pursuant to s. 465.0244.

Disclosure and non-penalization requirements

Covered persons must be provided certain information and pharmacies/pharmacists may not be penalized for disclosures.

Plans may not prohibit, restrict, or penalize a pharmacy or pharmacist from disclosing information to the office or to covered persons regarding the above items.

Codes, Thresholds, and Key Numeric Values

N/Amixed

No clinical or billing codes specified in this portion of the document.

WAC definitionmixed

Disclosure and trade secret handlingmixed

Information marked as a trade secret under specified paragraphs may be withheld from public posting; other submitted information may not claim trade-secret exemption under s.119.0715.

Defined term: Adjudication transaction feemixed

'Adjudication transaction fee' means a fee charged by the pharmacy benefit manager to the pharmacy for electronic claim submissions.

Not applicablemixed

No billing or clinical codes provided in this excerpt.

N/A (administrative definitions)mixed

Administrative definitions (e.g., direct and indirect remuneration fees, dispensing fee, effective rate guarantee) only; no clinical procedure or billing codes specified.

Rebatesmixed

References to manufacturer rebates and their required use to offset premiums, cost-sharing, and to offset copayments and deductibles; no specific NDCs or numeric codes listed.

Identifiers required in MAC appeals and reimbursement communicationNDC

NDC	National Drug Code must be provided when updating MAC pricing, for appeals, and when communicating acquisition sources below MAC pricing.

Drug identifier required on disclosureNDC

NDC	National Drug Code for the drug identified in a denied appeal must be provided to the pharmacy or pharmacist.

Drug identification for pricing transparencyNDC

NDC	National Drug Code to be provided for drugs priced below maximum allowable cost (MAC) as part of transparency and appeal-denial disclosures.