Pharmacists will see the benefits of the consumer protection provisions required by Act 77 for PBM and health insurer/health benefit plan contracts (relating to rebates and reimbursement patient steering, clawbacks, and network adequacy) of Act 77 over the next two years. Act 77 will apply to prescription drug coverage under a health benefit plan for which the form or rate is approved on or after October 15, 2024.
Act 77 requires the Department to publish a non-exclusive list of “specialty drugs" as well as guidance on how a pharmacy can request a review of a specialty drug designation by January 13, 2025. Please check back soon for updates.
Beginning January 13, 2025, a pharmacy can refer a specialty drug designation made by a health plan, health insurer, or PBM to the Department for review. However, it is important to keep in mind that in order for the Department to have jurisdiction over the referral, it must involve a designation made with respect to a fully-funded health benefit plan.
No. Act 77 only applies to fully-funded health benefit plans. There are other types of plans to which it does not apply, such as self-funded employer plans, Medicare, Medigap, Medicaid, CHIP, and TriCare Supplemental insurance. Almost all of those plans are subject to federal law. In addition, there are some types of Pennsylvania insurance policies, such as fixed indemnity or limited benefit plans, long-term care, disability, dental, vision, worker's compensation, and automobile medical payment coverage, to which Act 77 does not apply.
PBMs should be making plans immediately to comply with the different provisions of the law.
Contracts with Health Benefit Plans and Health Insurers: New contracts, and amendments to or renewals of current contracts, will need to comply with Act 77 by early 2025, so that they can apply to any prescription drug coverage provided under a health benefit plan for which the form or rate is approved on or after October 15, 2024. The contracts will need to comply with the Act 77 contract provisions, patient steering and clawback prohibitions, and network adequacy requirements.
Contracts with Pharmacies: Contracts between Pharmacies and PBMs who are conducting business on behalf of health insurer clients that are issued, renewed, or amended after October 15, 2024, must comply with the requirements of section 601 of the Act (pertaining to reimbursement, pharmacy participation, specialty drug designations, pass-through of rebates, and information regarding fees for network participation).
Network Adequacy Reporting - The first Network Adequacy Report will be due April 1, 2026.
Transparency Reporting - The first Transparency Report will be due July 1, 2026.
Look for helpful information to be provided soon. This information will include:
- Updated PBM/Auditing Entity registration process;
- PSAO registration process;
- Network adequacy reporting form;
- PBM Transparency reporting form;
- Guidance for pharmacies to submit specialty drug designation referrals; and
- Specialty drug referral form.
Additional information can be found on the
Consumer-focused Pharmacy Benefit Reform Act page.
Information for Licensees can be found on the Pharmacy Benefit Manager and Auditing Entity Registration page.