HB 4422

relating to discriminatory practices by a health benefit plan
issuer, pharmacy benefit manager, and third-party payor with
respect to certain entities participating in a federal drug
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1.  Chapter 1369, Insurance Code, is amended by
adding Subchapter O to read as follows:
SUBCHAPTER O.  PROHIBITION ON DISCRIMINATION WITH RESPECT TO
FEDERAL 340B DRUG DISCOUNT PROGRAM
Sec. 1369.701.  DEFINITIONS.  In this subchapter:
(1)  "Covered entity" has the meaning assigned by 42
(2)  "Non-covered entity" means an entity that is not a
(3)  "Pharmacy benefit manager" has the meaning
(4)  "Third-party payor" means any person, other than a
pharmacy benefit manager, health benefit plan issuer, patient, or
individual paying for a patient's drugs on the patient's behalf,
that makes payment for drugs dispensed by a pharmacist or pharmacy
or administered by a health care professional.
Sec. 1369.702.  APPLICABILITY OF SUBCHAPTER.  (a)  This
subchapter applies only to a health benefit plan that provides
benefits for medical or surgical expenses incurred as a result of a
health condition, accident, or sickness, including an individual,
group, blanket, or franchise insurance policy or insurance
agreement, a group hospital service contract, or an individual or
group evidence of coverage or similar coverage document that is
(2)  a group hospital service corporation operating
(3)  a health maintenance organization operating under
(4)  an approved nonprofit health corporation that
holds a certificate of authority under Chapter 844;
(5)  a multiple employer welfare arrangement that holds
a certificate of authority under Chapter 846;
(6)  a stipulated premium company operating under
(7)  a fraternal benefit society operating under
(8)  a Lloyd's plan operating under Chapter 941; or
(9)  an exchange operating under Chapter 942.
(b)  Notwithstanding any other law, this subchapter applies
(1)  a small employer health benefit plan subject to
Chapter 1501, including coverage provided through a health group
cooperative under Subchapter B of that chapter;
(2)  a standard health benefit plan issued under
(3)  a basic coverage plan under Chapter 1551;
(4)  a basic plan under Chapter 1575;
(5)  a primary care coverage plan under Chapter 1579;
(6)  a plan providing basic coverage under Chapter
(7)  nonprofit agricultural organization health
benefits offered by a nonprofit agricultural organization under
(8)  alternative health benefit coverage offered by a
subsidiary of the Texas Mutual Insurance Company under Subchapter
(9)  health benefits provided by or through a church
benefits board under Subchapter I, Chapter 22, Business
(10)  group health coverage made available by a school
district in accordance with Section 22.004, Education Code;
(11)  the state Medicaid program, including the
Medicaid managed care program operated under Chapter 540,
(12)  the child health plan program under Chapter 62,
(13)  a regional or local health care program operated
under Section 75.104, Health and Safety Code;
(14)  a self-funded health benefit plan sponsored by a
professional employer organization under Chapter 91, Labor Code;
(15)  county employee group health benefits provided
under Chapter 157, Local Government Code; and
(16)  health and accident coverage provided by a risk
pool created under Chapter 172, Local Government Code.
Sec. 1369.703.  PROHIBITION ON DISCRIMINATORY ACTIONS.  A
health benefit plan issuer, pharmacy benefit manager, or
(1)  reimburse a covered entity or a pharmacist or
pharmacy that is under contract with the entity for a prescription
drug at a rate lower than the rate paid to a non-covered entity for
(2)  impose a term on a covered entity that differs from
the terms applied to non-covered entities on the basis that the
entity is a covered entity, including:
(A)  a fee, chargeback, or other adjustment that
is not placed on non-covered entities; or
(B)  a restriction or requirement regarding
participation in a health benefit plan issuer, pharmacy benefit
manager, or third-party payor network, including a requirement that
a covered entity enter into a contract with a specific pharmacy or
(3)  create a restriction applicable to or impose an
additional charge on a patient who chooses to receive a
prescription drug from a covered entity.
SECTION 2.  Subchapter O, Chapter 1369, Insurance Code, as
added by this Act, applies only to a health benefit plan delivered,
issued for delivery, or renewed on or after January 1, 2026.
SECTION 3.  It is the intent of the legislature that every
provision, section, subsection, sentence, clause, phrase, or word
in this Act, and every application of the provisions in this Act to
every person, group of persons, or circumstances, is severable from
each other.  If any application of any provision in this Act to any
person, group of persons, or circumstances is found by a court to be
invalid for any reason, the remaining applications of that
provision to all other persons and circumstances shall be severed
SECTION 4.  This Act takes effect September 1, 2025.