SB 1354

relating to the minimum reimbursement amount for prescription drugs
and devices to health benefit plan network pharmacists and
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1.  Chapter 1369, Insurance Code, is amended by
adding Subchapter H-1 to read as follows:
SUBCHAPTER H-1.  MINIMUM REIMBURSEMENT AMOUNT FOR NETWORK
Sec. 1369.371.  DEFINITIONS.  In this subchapter:
(1)  "Health benefit plan" has the meaning assigned by
(2)  "Pharmacy benefit manager" means:
(A)  a pharmacy benefit manager, as defined by
(B)  a health benefit plan issuer or sponsor that
administers pharmacy benefits in connection with the health benefit
Sec. 1369.372.  APPLICABILITY OF SUBCHAPTER.  This
subchapter applies to the administration of pharmacy benefits by or
on behalf of an issuer or sponsor of a health benefit plan.
Sec. 1369.373.  EXCEPTIONS TO APPLICABILITY OF
SUBCHAPTER.  This subchapter does not apply to an issuer or
provider of health benefits under or a pharmacy benefit manager
administering pharmacy benefits under:
(1)  the state Medicaid program, including the Medicaid
managed care program operated under Chapter 540, Government Code;
(2)  the child health plan program under Chapter 62,
(3)  the TRICARE military health system;
(4)  a basic coverage plan under Chapter 1551;
(5)  a basic plan under Chapter 1575;
(6)  a coverage plan under Chapter 1579;
(7)  a plan providing basic coverage under Chapter
(8)  a workers' compensation insurance policy or other
form of providing medical benefits under Title 5, Labor Code.
Sec. 1369.374.  REIMBURSEMENT MINIMUM; DISPENSING FEES.
(a)  Notwithstanding any other law and subject to Subsection (c), a
pharmacy benefit manager may not reimburse a pharmacist or pharmacy
under contract with the pharmacy benefit manager for a prescription
drug or device an amount that is less than the actual cost to that
pharmacist or pharmacy for the drug or device.
(b)  Subsection (a) does not apply to a pharmacy benefit
manager using an ingredient cost reimbursement methodology for a
prescription drug or device that is identical to the reimbursement
methodology for the ingredient cost of the drug or device under the
Medicaid fee-for-service model.
(c)  In calculating the reimbursement amount for a
prescription drug or device under Subsection (a), a pharmacy
benefit manager may not include in that calculation the amount of a
professional dispensing fee payable to the pharmacist or pharmacy
that dispensed the drug or device.
(d)  A pharmacy benefit manager shall reimburse a pharmacist
or pharmacy under contract with the pharmacy benefit manager a
professional dispensing fee for a prescription drug or device in an
amount that is not less than the amount of the dispensing fee paid
for the drug or device under the Medicaid fee-for-service model.
Sec. 1369.375.  APPEAL: PROCEDURES REQUIRED.  (a)  A
pharmacy benefit manager shall provide in the contract with each
pharmacist or pharmacy a procedure for the pharmacist or pharmacy
to appeal a reimbursement of a prescription drug or device that the
pharmacist or pharmacy alleges to not be in compliance with Section
1369.374 on or before the seventh day after the date the
(b)  The appeal procedure provision must:
(1)  be approved by the commissioner; and
(2)  permit a pharmacist or pharmacy or the
pharmacist's or pharmacy's designated agent to file an appeal using
the standard appeal form described by Subsection (d).
(c)  A pharmacy benefit manager shall file an appeal
procedure provision with the department in the form and manner
prescribed by the commissioner.
(d)  The commissioner shall develop and make available to
pharmacy benefit managers a standard appeal form to be used to file
an appeal of a reimbursement alleged to not be in compliance with
Sec. 1369.376.  APPEAL: PHARMACIST OR PHARMACY AGENT.  A
pharmacist or pharmacy electing to appeal a reimbursement under a
procedure described by Section 1369.375 may designate a pharmacy
services administrative organization or another agent to file and
Sec. 1369.377.  APPEAL: EFFECT OF PHARMACIST OR PHARMACY
PREVAILING.  (a)  In this section, "similarly situated pharmacist
or pharmacy" means a pharmacist or pharmacy:
(1)  that is under contract with the pharmacy benefit
(2)  that purchases the prescription drug or device
that is the subject of an appeal of a reimbursement not in
compliance with Section 1369.374 from the same pharmaceutical
wholesaler as the pharmacist or pharmacy that prevailed in the
(3)  to which the pharmacy benefit manager also applies
the challenged reimbursement rate or actual cost for the
(b)  If a pharmacist or pharmacy prevails in an appeal of a
reimbursement alleged to not be in compliance with Section
1369.374, the pharmacy benefit manager shall, not later than the
seventh day after the date the pharmacist or pharmacy prevailed:
(1)  make the necessary change to the challenged
(2)  if the product involved in the appeal is a
prescription drug, provide the pharmacist or pharmacy the national
(3)  permit the pharmacist or pharmacy to reverse and
rebill the claim that is the subject of the appeal;
(4)  pay or waive any transaction fee required to
(5)  reimburse the pharmacist or pharmacy at least the
pharmacist's or pharmacy's actual cost for the prescription drug or
(6)  apply the findings from the appeal to the
reimbursement rate and actual cost for the prescription drug or
device that is the subject of the appeal to other similarly situated
Sec. 1369.378.  APPEAL: EFFECT OF PHARMACY BENEFIT MANAGER
PREVAILING.  (a)  If a pharmacy benefit manager prevails in an
appeal of a reimbursement alleged to not be in compliance with
Section 1369.374 and the prescription drug or device that is the
subject of the appeal is available at a cost equal to or less than
the challenged reimbursement, the pharmacy benefit manager shall,
not later than the seventh day after the date the pharmacy benefit
(1)  provide the pharmacist or pharmacy with the name
of the national or regional pharmaceutical wholesaler operating in
this state that has the drug or device in stock at a price that is
equal to or less than the challenged reimbursement; and
(2)  as applicable, provide the national drug code
number for the drug or the unique device identifier for the device.
(b)  If a pharmacy benefit manager fails to comply with
Subsection (a), the pharmacy benefit manager shall:
(1)  adjust the challenged reimbursement to an amount
equal to or greater than the pharmacist's or pharmacy's actual cost;
(2)  permit the pharmacist or pharmacy to reverse and
rebill each claim affected by the inability to obtain the drug or
device at a cost equal to or less than the challenged reimbursement;
(3)  pay or waive any transaction fee required to
reverse and rebill each affected claim.
SECTION 2.  Subchapter H-1, 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.  This Act takes effect September 1, 2025.