Pharmacy Benefit Managers Licensing and Compliance Developments

In response to calls for greater transparency in the prescription drug industry, 2021 continued a nationwide trend of increased state licensing and regulation of Pharmacy Benefit Managers (“PBMs”). In the last year, laws requiring PBMs to obtain PBM, Third Party Administrator (“TPA”) or Health Care Benefit Manager (“HCBM”) licenses/registrations from state regulators were passed or became effective in at least eighteen states. In addition to the new licensing requirements, numerous states also adopted requirements regulating other aspects of PBM operations.

New PBM Licensing and Registration Requirements

The eighteen states that passed a PBM licensing/registration requirement (or had one become effective) in 2021 include:

The above states all prohibit an entity from acting as a PBM without first becoming licensed or registered with the appropriate state authority (e.g., the state’s insurance department, state pharmacy board, etc.). The specific application requirements for licensure or registration vary by state. However, applications often require submission of the following documents and information:

New Operational Requirements

In addition to the new licensing and registration requirements referenced above, numerous states also recently adopted requirements regulating certain aspects of PBM operations. Common operational issues addressed by those new requirements include:

As a result of the significant recent increase in the number of states that are currently licensing and regulating PBMs, it is important for PBMs to confirm that they are in compliance with the licensing/registration and operational requirements of the states in which they are active.

 Click here to view the PDF.

© Polsinelli PC, Polsinelli LLP in California
National Law Review, Volumess XII, Number 31