Pharmacy Benefits Managers – Definition of Purchaser and Alteration of Application of Law
HB321 revises Maryland’s pharmacy benefits manager (PBM) laws by narrowing and clarifying who counts as a “purchaser” for purposes of the State’s PBM regulations. In particular, it excludes certain nonprofit health maintenance organizations that operate as group models, serve only their own members or patients, and use internal pharmacy operations. The bill also removes language that had limited several PBM protections and requirements to PBMs acting on behalf of a carrier, thereby broadening the reach of those provisions in some respects.
The bill preserves and restates a range of PBM rules covering pharmacy communications, steering, reimbursement, audits, and internal review. These provisions generally prohibit PBMs from blocking pharmacies from discussing drug prices with beneficiaries, from forcing use of affiliated pharmacies in most cases, from reimbursing pharmacies less than the PBM reimburses itself or an affiliate for the same service, and from using certain audit practices such as extrapolation or overly broad recoupment. It also keeps the internal appeals and review processes for disputed audit findings and underpayments, and sets a future requirement for secure electronic communication in audits by October 1, 2025.
HB321 additionally directs the Maryland Insurance Administration to convene a workgroup by January 1, 2026, to review PBM-related laws, specialty pharmacy rules, and antisteering provisions, and to report recommendations to the General Assembly. The workgroup is specifically tasked with examining laws on specialty drug coverage and designated pharmacies, required use of specific pharmacies or entities, reimbursement, and any other relevant provisions, which signals that the bill is both a substantive update and a precursor to possible future reforms.
The overall sentiment around the bill appears strongly favorable. The House passed the bill on third reading unanimously, 136-0, and the committee report was favorable with amendments. That voting record suggests broad bipartisan support and little public opposition in the available record.
The main policy tension in the bill is not reflected in recorded votes but in the structure of the changes: it balances PBM oversight and pharmacy protections against carve-outs for certain nonprofit group-model HMOs and specialty drug arrangements. The most notable points of contention likely involve whether PBM rules should apply uniformly across all purchasers, how much flexibility affiliated entities should have in directing pharmacy use, and how far audit and reimbursement restrictions should go in regulating PBM business practices.
HB321 amends multiple sections of the Insurance Article governing pharmacy benefits managers, including definitions and operational rules for purchaser status, pharmacy steering, reimbursement, audits, and claim review. By excluding certain nonprofit group-model HMOs from the definition of “purchaser” and removing carrier-specific limiting language from several provisions, the bill changes the scope of who is covered by Maryland’s PBM requirements and how broadly those requirements apply. It also creates a mandated MIA workgroup and reporting requirement, which may lead to additional legislation affecting specialty pharmacies and antisteering practices.
The bill’s reception appears overwhelmingly positive. The House passed HB321 unanimously on third reading, and the committee reported it favorably with amendments. The available record shows no recorded opposition in the vote history and no committee transcript evidence of controversy, suggesting broad bipartisan agreement on the need to update PBM regulation.
The likely areas of contention are policy rather than procedural. The bill narrows the purchaser definition for certain nonprofit health maintenance organizations, which may be viewed as a targeted exemption benefiting integrated health systems. At the same time, it preserves and expands PBM restrictions on steering, reimbursement, and audits, which PBMs and affiliated entities may view as burdensome. The workgroup directive also indicates unresolved issues around specialty pharmacy access, antisteering rules, and whether current law adequately addresses affiliated pharmacy arrangements and reimbursement fairness.