(1) Except as provided in section 25.5-5-406.1 (1)(s), any pharmacy benefit management firm or intermediary whose contract with a carrier includes an open network shall allow participation by each pharmacy provider in the contract service area. If a pharmacy benefit management firm or intermediary offers an open network, the pharmacy benefit management firm or intermediary may offer such network on a regional or local basis.
(2) For purposes of this section, open network means any pharmacy network created by a pharmacy benefit management firm or intermediary through a contracting process with pharmacy providers that does not include competitive bidding and allows participation by any pharmacy provider that agrees to the terms and conditions of the contract offered by the pharmacy benefit management firm or intermediary.
(3) A pharmacy benefit management firm or intermediary shall not be prohibited from contracting with exclusive pharmacy networks if, sixty days before the termination or effective date of an exclusive pharmacy network contract between the pharmacy providers and the pharmacy benefit management firm or intermediary, notice of such termination or of the effective date of an exclusive pharmacy network contract is published in one or more newspapers of general circulation in the affected contract service area. Notice shall include information about where in Colorado a copy of the pharmacy provider selection criteria may be obtained.
(4) (a) No pharmacy benefit manager or carrier offering a managed care plan shall transfer or request that a pharmacy provider transfer the prescription or prescriptions of a covered person or subscriber, wholly or in part, to a different participating pharmacy provider than the provider selected by the covered person or subscriber unless one or more of the following conditions have been met:
(I) The participating pharmacy provider to whom the covered person or subscriber's prescription is to be transferred or the carrier or pharmacy benefit manager has obtained a document, signed by the covered person or subscriber, that contains a clear, conspicuous, and unequivocal request by the covered person or subscriber for a change of provider;
(II) The participating pharmacy provider carrier or pharmacy benefit manager to whom the covered person or subscriber's prescription is to be transferred has obtained the covered person or subscriber's oral authorization for the transfer and is able to furnish proof of such authorization through verification by an independent third party or an electronic record; or
(III) The pharmacy provider's participation in the pharmacy network of the carrier or pharmacy benefit manager has changed and the pharmacy provider selected by the covered person or subscriber is no longer a participating provider in the network, provided that the covered person or subscriber has been notified of the proposed transfer of pharmaceutical care services and is given an opportunity to affirmatively select a participating pharmacy provider other than the proposed transferee.
(b) Nothing in this subsection (4) shall require a carrier offering a managed care plan or a pharmacy benefit manager to pay for pharmaceutical benefits received from a nonparticipating provider.
Source: L. 98: Entire section added, p. 1188, � 1, effective August 5. L. 2001: (4) added, p. 1230, � 2, effective January 1, 2002. L. 2006: (1) amended, p. 1999, � 35, effective July 1. L. 2013: (1) amended, (HB 13-1266), ch. 217, p. 988, � 48, effective May 13. L. 2018: (1) amended, (HB 18-1431), ch. 313, p. 1891, � 8, effective August 8.
10-16-122.1. Contracts between PBMs and pharmacies - carrier submit list of PBMs - PBM registration - fees - prohibited practices - exception - rules - enforcement - short title - definitions. (1) The short title of this section is the Pharmacy Fairness Act.
(2) (a) Starting in 2022, each carrier shall submit to the commissioner, contemporaneously with its rate filing pursuant to section 10-16-107 and in a form and manner specified by the commissioner by rule, a list of all pharmacy benefit managers the carrier contracts with or otherwise uses for claims processing services or other prescription drug or device services under health coverage plans the carrier offers.
(b) The list of PBMs submitted to the commissioner pursuant to this subsection (2) is considered proprietary and confidential information and is not subject to disclosure under the Colorado Open Records Act, part 2 of article 72 of title 24.
(2.5) (a) Starting in 2024, a person shall not establish or operate as a PBM in this state unless the person has registered with the commissioner in accordance with this subsection (2.5) and commissioner rules. Notwithstanding the definition of a PBM in section 10-16-102 (49), this registration requirement applies to all PBMs doing business in this state, including a PBM that is not directly connected with a carrier.
(b) (I) The commissioner shall establish, by rule, the form and manner for a person to register with the commissioner and shall charge application and renewal fees as established by rule. The commissioner shall set registration fees at amounts that are commensurate with the amounts of registration fees assessed in other states.
(II) The commissioner may deny a registration to a PBM; suspend, revoke, or refuse to issue, continue, or renew the registration of a PBM; or issue a cease-and-desist order to a PBM if, after notice to the PBM and after a hearing held in accordance with sections 24-4-104 and 24-4-105, the commissioner finds that the PBM, or an officer, director, or employee of the PBM, has:
(A) Made a material misstatement, misrepresentation, or omission in a registration or registration renewal application;
(B) Fraudulently or deceptively obtained or attempted to obtain a registration or renewal of a registration;
(C) In connection with the administration of prescription drug benefits management services, committed fraud or engaged in illegal or dishonest activities; or
(D) Violated any provision of this title 10.
(III) A determination of the commissioner is a final agency action subject to judicial review pursuant to section 24-4-106.
(c) The commissioner shall transmit any fees collected pursuant to this subsection (2.5) to the state treasurer for deposit in the division of insurance cash fund created in section 10-1-103 (3). The commissioner shall use the fees collected pursuant to this subsection (2.5) to fund the division's costs in administering and enforcing this subsection (2.5) and the requirements and prohibitions on the conduct and actions of PBMs as specified in this article 16.
(3) A PBM or the representative of a PBM shall not:
(a) (I) With regard to individual and group health benefit plans, preclude covered persons from accessing prescription drug benefits under the health benefit plan at an in-network retail pharmacy unless:
(A) The FDA has restricted distribution of the prescription drug; or
(B) The prescription drug requires special handling, provider coordination, or patient education that cannot be provided by a retail pharmacy.
(II) A health benefit plan may impose a different cost-sharing amount for obtaining a covered prescription drug at a retail pharmacy, but all cost sharing must count towards the plan's annual limitation on cost sharing specified in 45 CFR 156.130 and must be accounted for in the plan's actuarial value calculated under 45 CFR 156.135.
(b) Charge a pharmacy or pharmacist a fee related to the adjudication of a pharmacist services claim, other than a one-time, reasonable fee, not to exceed the lesser of twenty-five percent of the pharmacy dispensing fee or twenty-five cents, for receipt and processing of the same pharmacist services claim;
(c) Require pharmacy accreditation standards or certification requirements inconsistent with, more stringent than, or in addition to requirements applicable to similarly situated PBM-affiliated pharmacies within the same PBM network; or
(d) (I) Prohibit a rural independent pharmacy from using a private courier or a delivery service to deliver a prescription drug to a patient; or
(II) Require a rural independent pharmacy to obtain consent from the PBM to use a private courier or delivery service to deliver a prescription drug to a patient.
(4) This section does not apply to the administration or management of the drug assistance program authorized pursuant to section 25-4-1401.
(4.5) With regard to the requirements of this section applicable to PBMs, the commissioner has the authority to enforce this section and to impose a penalty or other remedy against a PBM that fails to comply with this section.
(4.7) The commissioner may adopt rules to implement and enforce this section.
(5) As used in this section and section 10-16-122.9, unless the context otherwise requires:
(a) Claims processing services means the administrative services performed in connection with processing and adjudicating claims related to pharmacist services, which services include:
(I) Receiving payments for pharmacist services; or
(II) Making payments to pharmacies or pharmacists for pharmacist services.
(b) Other prescription drug or device services means services, other than claims processing services, provided directly or indirectly and either in connection with or separate from claims processing services. The term includes:
(I) Managing or participating in incentive programs or arrangements for pharmacist services;
(II) Negotiating or entering into contractual arrangements with pharmacies or pharmacists;
(III) Developing formularies;
(IV) Designing prescription drug benefits programs; and
(V) Advertising or promoting services.
(c) PBM-affiliated pharmacy means a pharmacy or pharmacist that, either directly or indirectly through one or more intermediaries, owns or controls or is owned or controlled by a PBM.
(d) PBM network means a network of pharmacies or pharmacists that are offered an agreement or contract to provide pharmacist services for a health benefit plan.
(e) Pharmacist has the same meaning as set forth in section 12-280-103 (35).
(f) Pharmacist services means products, goods, and services provided as a part of the practice of pharmacy, as defined in section 12-280-103 (39).
(g) Pharmacy has the same meaning as set forth in section 12-280-103 (43).
Source: L. 2021: Entire section added, (HB 21-1297), ch. 452, p. 2992, � 3, effective July 6. L. 2023: (2.5), (4.5), and (4.7) added, (HB 23-1227), ch. 160, p. 694, � 1, effective August 7. L. 2025: IP(3) amended and (3)(d) added, (HB 25-1222), ch. 259, p. 1328, � 3, effective August 6.
Editor's note: Section 8(2) of chapter 259 (HB 25-1222), Session Laws of Colorado 2025, provides that the act changing this section applies to conduct occurring on or after August 6, 2025.
Cross references: For the legislative declaration in HB 21-1297, see section 1 of chapter 452, Session Laws of Colorado 2021. For the legislative declaration in HB 25-1222, see section 1 of chapter 259, Session Laws of Colorado 2025.
10-16-122.3. Pharmacy benefit management firm payments - retroactive reduction prohibited - enforcement - rules - dispensing fees - definitions. (1) (a) A pharmacy benefit management firm shall not reimburse a pharmacy in an amount less than the amount that the pharmacy benefit management firm reimburses any affiliate for the same pharmacy services.
(b) This subsection (1) does not prohibit a pharmacy benefit management firm from reimbursing an affiliate for satisfying the terms of a performance-based contract.
(1.5) [Editor's note: Subsection (1.5) is effective January 1, 2026.] On and after January 1, 2026, a pharmacy benefit management firm shall reimburse a rural independent pharmacy for a prescription drug in an amount not less than the national average drug acquisition cost for the dispensed prescription drug ingredients and a dispensing fee. If the national average drug acquisition cost is not available at the time a prescription drug is administered or dispensed, a pharmacy benefit management firm shall not reimburse in an amount that is less than the wholesale acquisition cost of the prescription drug.
(2) (a) A contract or agreement, including a performance-based or value-based contract or agreement, between a pharmacy benefit management firm and a pharmacy or a pharmacy services administrative organization with respect to prescription drug benefits administered or managed by the pharmacy benefit management firm must provide that after the date the pharmacy benefit management firm receives a clean claim submitted by a pharmacy, the pharmacy benefit management firm shall not retroactively reduce payment on the claim after the point of sale except as the result of an audit conducted in accordance with section 10-16-122.5.
(b) Nothing in this subsection (2) prohibits a pharmacy benefit management firm from retroactively increasing a payment to a pharmacy pursuant to a written agreement between the pharmacy benefit management firm and the pharmacy or making adjustments to claims in the case of a clerical error.
(3) Each carrier that contracts with a pharmacy benefit management firm to manage or administer prescription drug benefits on the carrier's behalf shall include in a new, amended, or renewed contract with the pharmacy benefit management firm a requirement that the pharmacy benefit management firm comply with this section. The carrier shall annually audit the pharmacy benefit management firm to monitor and ensure compliance with this section.
(4) The division may promulgate rules to implement and enforce this section, including rules to establish the manner in which carriers and pharmacy benefit management firms are required to show compliance with this section.
(5) This section applies to contracts and agreements between pharmacy benefit management firms and pharmacies or pharmacy services administrative organizations in effect on or after January 1, 2021.
(5.5) With regard to the requirements of this section applicable to pharmacy benefit management firms, the commissioner has the authority to enforce this section and to impose a penalty or other remedy against a pharmacy benefit management firm that fails to comply with this section.
(6) As used in this section:
(a) Affiliate means a pharmacy that directly or indirectly, through one or more intermediaries, owns or controls, is owned or controlled by, or is under common ownership or control with a pharmacy benefit management firm.
(b) Clean claim means a claim that has no defect or impropriety, including any lack of required substantiating documentation, or particular circumstance requiring special treatment that prevents timely payment from being made on the claim. Clean claim does not include a claim based on fraud, waste, or abuse.
(b.3) [Editor's note: Subsection (6)(b.3) is effective January 1, 2026.] Dispensing fee means the reimbursement amount for costs associated with filling a prescription, as published for rural pharmacies in 10 CCR 2505-10 sec. 8.800.13.M, as specified in the version of the rule adopted on July 12, 2024. On January 1, 2027, and on January 1 of every year thereafter, a pharmacy benefit management firm shall increase the amount of the dispensing fee by one percent to account for inflation.
(c) Pharmacy means an in-state or nonresident prescription drug outlet, as defined in section 12-280-103 (43); an other outlet, as defined in section 12-280-103 (32); a hospital satellite pharmacy, as defined in section 12-280-103 (20); or other setting, including a practitioner's office or clinic, where a practitioner, as defined in section 12-280-103 (40), dispenses prescription drugs to patients as authorized by section 12-280-120 (6).
Source: L. 2020: Entire section added, (HB 20-1078), ch. 98, p. 381, � 1, effective September 14. L. 2023: (4) amended and (5.5) added, (HB 23-1227), ch. 160, p. 695, � 2, effective August 7. L. 2025: (1.5) and (6)(b.3) added, (HB 25-1222), ch. 259, p. 1328, � 4, effective January 1, 2026.
Editor's note: Section 8(2) of chapter 259 (HB 25-1222), Session Laws of Colorado 2025, provides that the act changing this section applies to conduct occurring on or after January 1, 2026.
Cross references: For the legislative declaration in HB 25-1222, see section 1 of chapter 259, Session Laws of Colorado 2025.
10-16-122.4. Pharmacy benefits - formulary change prohibition - exceptions - enforcement - definition - rules. (1) (a) Starting in 2024, except as provided in subsection (2) of this section, a carrier or, if a carrier uses a PBM for claims processing services or other prescription drug or device services, as those terms are defined in section 10-16-122.1, under a health benefit plan offered by the carrier in the individual market, the PBM, or a representative of the carrier or the PBM, shall not modify or apply a modification to the current prescription drug formulary during the current plan year.
(b) As used in this subsection (1), modify or modification includes eliminating a particular prescription drug from the formulary or moving a prescription drug to a higher cost-sharing tier.
(2) A carrier offering a health benefit plan on the individual market in this state that includes a prescription drug benefit and uses a prescription drug formulary or list of covered drugs may:
(a) Remove a prescription drug from the prescription drug formulary or list of covered drugs, with notice to a covered person and the covered person's provider, if:
(I) The FDA issues an announcement, guidance, notice, warning, or statement concerning the prescription drug that calls into question the clinical safety of the prescription drug; or
(II) The prescription drug is approved by the FDA for use without a prescription;
(b) Move a prescription drug from a prescription drug cost-sharing tier that imposes a lesser copayment or deductible for the prescription drug to a cost-sharing tier that imposes a greater copayment or deductible for the prescription drug if the carrier adds to the prescription drug formulary or list of covered drugs a generic prescription drug or biosimilar drug that is:
(I) Approved by the FDA for use as a therapeutic equivalent; and
(II) In a prescription drug cost-sharing tier that imposes a copayment or deductible for the generic prescription drug or biosimilar drug that is less than the copayment or deductible that is imposed for the brand-name prescription drug in the cost-sharing tier to which the brand-name prescription drug is moved; or
(c) Remove a prescription drug from the prescription drug formulary or list of covered drugs, or move a prescription drug to a higher cost-sharing tier, with advance notice to a covered person and the covered person's provider, if:
(I) The prescription drug has a wholesale acquisition cost greater than five hundred dollars at the start of the benefit year and the carrier's net cost increases by fifteen percent or more during that benefit year; and
(II) The prescription drug will be replaced on the formulary with a therapeutically equivalent generic or multi-source brand-name drug, an interchangeable biologic, or biosimilar drug at a lower cost to the enrollee.
(3) Prior to removing a drug from a formulary pursuant to this section, the carrier must attest and demonstrate to the division, in a form and manner determined by the commissioner by rule, that it has complied with the requirements of this section and has provided advanced notice to its enrollees.
(4) This section does not prohibit a carrier from adding a prescription drug to a prescription drug formulary or list of covered drugs at any time.
(5) The commissioner may promulgate rules to implement and enforce this section.
(6) With regard to the requirements of this section applicable to PBMs, the commissioner has the authority to enforce this section and to impose a penalty or other remedy against a PBM that fails to comply with this section.
Source: L. 2022: Entire section added, (HB 22-1370), ch. 184, p. 1229, � 2, effective August 10. L. 2023: (6) added, (HB 23-1227), ch. 160, p. 695, � 3, effective August 7.
Editor's note: Subsection (3) was numbered as subsection (2)(d) in House Bill 22-1370 but was renumbered on revision, resulting in the renumbering of subsections (3) and (4) in House Bill 22-1370 to subsections (4) and (5), respectively.
10-16-122.5. Pharmacy benefit manager - audit of pharmacies - time limits on on-site audits - enforcement - rules. (1) A pharmacy benefit manager, a carrier, or an entity acting on behalf of a pharmacy benefit manager or a carrier that audits a pharmacy shall:
(a) Give the pharmacy at least seven days' written notice prior to commencing an audit;
(b) Conduct the audit by or in consultation with a licensed pharmacist to the extent the audit requires the application of clinical or professional judgment;
(c) Not use extrapolation or other statistical expansion techniques in calculating the amount of a recoupment or penalty resulting from an audit of a pharmacy;
(d) Allow the pharmacy to produce additional claims documentation using any commercially reasonable method, including facsimile, mail, or electronic claims submission, if an audit results in the dispute or denial of a claim;
(e) Establish a written appeals process that includes procedures to allow a pharmacy to appeal to the pharmacy benefit manager or the carrier the preliminary reports resulting from the audit and any resulting recoupment or penalty;
(f) Not subject a pharmacy to the recoupment of funds when an audit results in the identification of a clerical error in a required document or record unless the error results in actual financial harm to the pharmacy benefit manager, a health benefit plan providing prescription drug benefits that are managed by the pharmacy benefit manager, or a consumer; and
(g) When subjecting a rural independent pharmacy to a recoupment of funds of more than one thousand dollars or a penalty of more than one thousand dollars as the result of an audit:
(I) Electronically notify the rural independent pharmacy of the rural independent pharmacy's rights to appeal pursuant to subsection (1)(e) of this section at least thirty days before the recoupment of funds;
(II) If the rural independent pharmacy does not respond to the electronic notification provided pursuant to subsection (1)(g)(I) of this section within thirty days after the electronic notification, again electronically notify the rural independent pharmacy of the rural independent pharmacy's rights to appeal pursuant to subsection (1)(e) of this section at least thirty days before the recoupment of funds; and
(III) If the rural independent pharmacy does not respond to the second electronic notification provided pursuant to subsection (1)(g)(II) of this section within thirty days after the second electronic notification, serve process on the rural independent pharmacy notifying of the rural independent pharmacy's rights to appeal pursuant to subsection (1)(e) of this section at least thirty days before the recoupment of funds.
(2) A pharmacy may use verifiable statements or records, including medication administration records of a nursing home, assisted living facility, hospital, physician, or other authorized practitioner, to validate the pharmacy record and delivery.
(3) Any legal prescription may be used to validate claims in connection with prescriptions, refills, or changes in prescriptions, including medication administration records, faxes, electronic prescriptions, or documented telephone calls from the prescriber or the prescriber's agent.
(4) The time period covered by an audit may not exceed twenty-four months from the date that the prescription was submitted to or adjudicated by the entity, unless a longer period is required by state or federal law.
(5) The time periods specified are waived for audits of pharmacy records when fraud or other intentional or willful misrepresentation is indicated through review of claims data, statements, physical review, or other investigative methods. The pharmacy benefit manager, carrier, or entity acting on behalf of the pharmacy benefit manager or carrier shall deliver to the pharmacy at the time of the audit a written or verbal explanation of the information that led to the conclusion that there is an indication of fraud or other intentional or willful misrepresentation. The explanation is not required if law enforcement has intervened due to the indication of fraud.
(5.5) Except under circumstances specified in subsection (5) of this section, on or after July 6, 2021, a pharmacy benefit manager, a carrier, or an entity acting on behalf of a PBM or a carrier shall not conduct an on-site audit of a pharmacy for which the PBM, carrier, or entity acting on behalf of a PBM or a carrier has conducted an on-site audit within the immediately preceding twelve months.
(5.7) With regard to the requirements of this section applicable to pharmacy benefit managers, the commissioner has the authority to enforce this section and to impose a penalty or other remedy against a pharmacy benefit manager that fails to comply with this section.
(5.9) The commissioner may adopt rules to implement and enforce this section.
(6) As used in this section, pharmacy includes any entity authorized under article 280 of title 12 to dispense prescription drugs.
Source: L. 2013: Entire section added, (HB 13-1221), ch. 118, p. 403, � 1, effective August 7. L. 2019: (6) amended, (HB 19-1172), ch. 136, p. 1655, � 47, effective October 1. L. 2021: (5.5) added, (HB 21-1297), ch. 452, p. 2993, � 4, effective July 6. L. 2023: (5.7) and (5.9) added, (HB 23-1227), ch. 160, p. 696, � 4, effective August 7. L. 2025: (1)(e) and (1)(f) amended and (1)(g) added, (HB 25-1222), ch. 259, p. 1329, � 5, effective August 6.
Editor's note: Section 8(2) of chapter 259 (HB 25-1222), Session Laws of Colorado 2025, provides that the act changing this section applies to conduct occurring on or after August 6, 2025.
Cross references: For the legislative declaration in HB 21-1297, see section 1 of chapter 452, Session Laws of Colorado 2021. For the legislative declaration in HB 25-1222, see section 1 of chapter 259, Session Laws of Colorado 2025.
10-16-122.6. Pharmacy benefit managers - contracts with pharmacies - maximum allowable cost pricing - enforcement - rules. (1) (a) In each contract between a pharmacy benefit manager and a pharmacy, the pharmacy shall be given the right to obtain from the pharmacy benefit manager, within ten days after any request, a current list of the sources used to determine maximum allowable cost pricing. The pharmacy benefit manager shall update the pricing information at least every seven days and provide a means by which contracted pharmacies may promptly review pricing updates in a format that is readily available and accessible.
(b) A pharmacy benefit manager shall maintain a procedure to eliminate products from the list of drugs subject to maximum allowable cost pricing in a timely manner in order to remain consistent with pricing changes in the marketplace.
(2) In order to place a prescription drug on a maximum allowable cost list, a pharmacy benefit manager shall ensure that:
(a) The drug is listed as A or B rated in the most recent version of the United States food and drug administration's approved drug products with therapeutic equivalence evaluations, also known as the orange book, or has an NR or NA rating or similar rating by a nationally recognized reference; and
(b) The drug is generally available for purchase by pharmacies in this state from a national or regional wholesaler and is not obsolete.
(3) Each contract between a pharmacy benefit manager and a pharmacy must include a process to appeal, investigate, and resolve disputes regarding maximum allowable cost pricing that includes:
(a) A twenty-one-day limit on the right to appeal following the initial claim;
(b) A requirement that the appeal be investigated and resolved within twenty-one days after the appeal;
(c) A telephone number at which the pharmacy may contact the pharmacy benefit manager to speak to a person responsible for processing appeals;
(d) A requirement that a pharmacy benefit manager provide a reason for any appeal denial and the identification of the national drug code, as defined in section 10-16-122.9 (2)(f), of a drug that may be purchased by the pharmacy at a price at or below the benchmark price as determined by the pharmacy benefit manager; and
(e) A requirement that a pharmacy benefit manager make an adjustment to a date no later than one day after the date of determination. This requirement does not prohibit a pharmacy benefit manager from retroactively adjusting a claim for the appealing pharmacy or for another similarly situated pharmacy.
(4) The commissioner has the authority to enforce this section and to impose a penalty or other remedy against a pharmacy benefit manager that fails to comply with this section.
(5) The commissioner may adopt rules to implement and enforce this section.
Source: L. 2023: Entire section added with relocations, (HB 23-1227), ch. 160, p. 697, � 7, effective August 7.
Editor's note: This section is similar to former � 25-37-103.5 as it existed prior to 2023.
10-16-122.7. Disclosures between pharmacists and patients - carrier and PBM prohibitions - enforcement - short title - legislative declaration - preemption by federal law - rules. (1) The short title of this section is the Patient Drug Costs Savings Act.
(2) The general assembly hereby finds and declares that:
(a) Consumers have the right to know about options to reduce the amount of money they pay at a pharmacy for prescription drugs; and
(b) This section will save consumers money by allowing pharmacists to provide information concerning the cost of prescription drugs.
(3) A carrier that has a contract with a pharmacy or pharmacist, or a pharmacy benefit management firm acting on behalf of a carrier, shall not:
(a) Prohibit a pharmacy or pharmacist from providing a covered person information on the amount of the covered person's cost share for the covered person's prescription drug and the clinical efficacy of a more affordable alternative drug that is therapeutically equivalent, as defined in section 12-280-103 (52), to the prescribed drug if one is available;
(b) Penalize a pharmacy or a pharmacist for disclosing the information described in subsection (3)(a) of this section to a covered person or selling a more affordable alternative to a covered person; or
(c) Require a pharmacy to charge or collect a copayment from a covered person that exceeds the total charges submitted by the network pharmacy.
(4) (a) If the commissioner determines that a carrier has not complied with this section, the commissioner shall institute a corrective action plan for the carrier to follow or use any of the commissioner's enforcement powers under this title 10 to obtain the carrier's compliance with this section.
(b) With regard to the requirements of this section applicable to PBMs, the commissioner has the authority to enforce this section and to impose a penalty or other remedy against a pharmacy benefit management firm that fails to comply with this section.
(5) If any provision of this section is inconsistent with, or in conflict with, an applicable federal law, rule, or regulation, the applicable federal law, rule, or regulation applies.
(6) The commissioner may adopt rules to implement and enforce this section.
Source: L. 2018: Entire section added, (HB 18-1284), ch. 181, p. 1233, � 1, effective August 8. L. 2019: (3)(a) amended, (HB 19-1172), ch. 136, p. 1655, � 48, effective October 1. L. 2023: (4) amended and (6) added, (HB 23-1227), ch. 160, p. 696, � 5, effective August 7.
10-16-122.8. Pharmacy benefit manager practices - agreements - fees - documentation - rules. [Editor's note: This section is effective January 1, 2027.]
(1) A pharmacy benefit manager may earn income derived from the assessment of a single, flat-dollar service fee for the provision of a prescription drug, which service fee is transparently expressed in a written agreement between the PBM and health benefit plan. The single, flat-dollar service fee may vary from client to client of the PBM based on the number of health benefit plan participants, clinical and administrative services provided, value-based payment arrangement, and other considerations.
(2) (a) Throughout the course of providing prescription drug benefits and claims processing services for health benefit plans, a PBM shall not:
(I) Earn any income that is directly or indirectly based on the price or cost of a prescription drug, including income from prescription drug mark-ups, copayments that exceed the cost of prescription drugs, up-charging or spread-pricing, or manufacturer-derived revenues; or
(II) Design a prescription drug formulary to favor a certain branded pharmaceutical or biologic over a therapeutically equivalent generic or biosimilar, unless the branded pharmaceutical or biologic has a lower net acquisition cost and that lower cost is reflected in a lower out-of-pocket expense for consumers.
(b) A PBM must be reimbursed by a health benefit plan for lowering aggregated prescription drug spending for the plan over a given period of time. A PBM must also be reimbursed for the direct services the PBM provides to the health benefit plan.
(c) A PBM may include in its contracts or other agreements with prescription drug manufacturers provisions that limit the increase of the wholesale acquisition cost of prescription drugs that they include in their formularies and benefit designs.
(d) This subsection (2) does not prevent a PBM from negotiating a prescription drug rebate or other discount as a percentage of the prescription drug's list price.
(3) Throughout the course of providing prescription drug benefits and claims processing services for health benefit plans, a PBM shall reimburse an unaffiliated pharmacy or a PBM-affiliated retail, mail order, or specialty pharmacy for the fulfillment of a prescription drug in an amount equal to the national average drug acquisition cost for the dispensed prescription drug ingredients and a reasonable and adequate dispensing fee. If the national average drug acquisition cost is not available at the time a prescription drug is administered or dispensed, a PBM shall not reimburse in an amount that is less than the wholesale acquisition cost of the prescription drug.
(4) (a) A contract between a PBM and a covered person's health benefit plan must include a provision that requires the PBM to disclose prescription drug cost information to the health benefit plan, including claims-level pharmacy data and PBM income derived from prohibited sources that the PBM must pass through to the health benefit plan. The information must be provided within thirty days after the date of the notification to the PBM by the health benefit plan or at regular negotiated reporting intervals necessary for the health benefit plan to determine the PBM's compliance with the contract terms and this section. The PBM shall assess no additional fees with regard to provision of this information.
(b) The contract between the PBM and a covered person's health benefit plan must include a provision authorizing the covered person's health benefit plan to annually execute an audit for the purpose of validating compliance with contract terms and this section.
(5) The commissioner may adopt rules as necessary to enforce this section.
Source: L. 2025: Entire section added, (HB 25-1094), ch. 303, p. 1583, � 1, effective January 1, 2027.
Editor's note: Section 2(2) of chapter 303 (HB 25-1094), Session Laws of Colorado 2025, provides that the act adding this section applies to conduct occurring on or after January 1, 2027.
10-16-122.9. Prescription drug benefits - real-time access to benefit information - enforcement - definitions - rules. (1) (a) Upon request of a covered person, the covered person's provider, or a third party on behalf of the covered person or provider, a carrier or, if a carrier uses a pharmacy benefit manager for claims processing services or other prescription drug or device services under a health benefit plan offered by the carrier, the PBM shall furnish the cost, benefit, and coverage data set forth in subsection (1)(c) of this section to the covered person, the covered person's provider, or the third party acting on behalf of the covered person or provider and shall ensure that the data is:
(I) Current and updated no later than one business day after any change is made;
(II) Provided in real time; and
(III) Provided in the same format that the request is made by the covered person, provider, or third party that made the request.
(b) (I) A covered person, the covered person's provider, or a third party acting on behalf of the covered person or provider shall submit the request for cost, benefit, and coverage data and the carrier or PBM shall respond to the request using established industry content and transport standards published by:
(A) A standards-developing organization accredited by the American National Standards Institute or its successor entity, including the National Council for Prescription Drug Programs, the Accredited Standards Committee, or Health Level Seven International, or their successor entities; or
(B) A relevant federal or state governing body, including the CMS or the office of the national coordinator for health information technology in the federal department of health and human services.
(II) A facsimile, proprietary payer or patient portal, or other electronic form is not an acceptable electronic format pursuant to this section.
(c) (I) Upon receipt of a request for cost, benefit, and coverage data pursuant to this subsection (1), the carrier or PBM, as applicable, shall provide the following data for any drug covered under the covered person's health benefit plan:
(A) The covered person's eligibility information for the drug;
(B) A list of any clinically appropriate alternatives to the drug that are covered under the covered person's health benefit plan;
(C) Cost-sharing information for the drug and for clinically appropriate alternatives, including a description of any variance in cost-sharing based on a pharmacy, whether retail or mail order, or provider dispensing or administering the drug or alternatives; and
(D) Any applicable utilization management requirements for the drug or clinically appropriate alternatives, including prior authorization, step therapy, quantity limits, and site-of-service restrictions.
(II) The carrier or PBM shall furnish the data specified in subsection (1)(c)(I) of this section, whether the request is made using the drug's unique billing code, such as a national drug code or Healthcare Common Procedure Coding System code, or a descriptive term, such as the brand or generic name of the drug. A carrier or PBM shall not deny or delay a request for cost, benefit, and coverage data as a method of blocking the data from being shared based on how the drug was requested.
(d) A carrier or PBM furnishing the data requested pursuant to this subsection (1) shall not:
(I) Restrict, prohibit, or otherwise hinder a provider from communicating or sharing with the covered person:
(A) Any of the data set forth in subsection (1)(c)(I) of this section;
(B) Additional information on any lower-cost or clinically appropriate alternatives, whether or not the alternatives are covered under the covered person's plan; or
(C) Additional payment or cost-sharing information that may reduce the covered person's out-of-pocket costs, such as cash price or patient assistance and support programs, whether sponsored by a manufacturer, foundation, or other entity;
(II) Except as may be required by law, interfere with, prevent, or materially discourage access, exchange, or use of the data set forth in subsection (1)(c)(I) of this section, which may include:
(A) Charging fees;
(B) Failing to respond to a request, at the time the request is made, when a response is reasonably possible;
(C) Implementing technology in nonstandard ways or instituting covered person consent requirements, processes, policies, procedures, or renewals that are likely to substantially increase the complexity or burden of accessing, exchanging, or using the data; or
(III) Penalize a provider for disclosing the information to a covered person or prescribing, administering, or ordering a clinically appropriate or lower-cost alternative.
(e) A carrier or PBM shall treat a personal representative of a covered person as the covered person for purposes of this section. If, under applicable law, a person has authority to act on behalf of a covered person in making decisions related to health care, a carrier or PBM, or affiliates or entities acting on behalf of the carrier or PBM, must treat the person as a personal representative of the covered person for purposes of this section.
(1.5) With regard to the requirements of this section applicable to PBMs, the commissioner has the authority to enforce this section and to impose a penalty or other remedy against a PBM that fails to comply with this section.
(1.7) The commissioner may adopt rules to implement and enforce this section.
(2) As used in this section, unless the context otherwise requires:
(a) CMS means the federal centers for medicare and medicaid services in the United States department of health and human services.
(b) Cost-sharing information means the amount a covered person is required to pay for a drug that is covered under the covered person's health benefit plan.
(c) Covered or coverage means those health-care services to which a covered person is entitled under the terms of the covered person's health benefit plan.
(d) Drug means any prescription drug or medication covered under a health benefit plan, whether ordered, prescribed, or administered.
(e) Healthcare Common Procedure Coding System means the system developed by the CMS for identifying health-care services in a consistent and standardized manner.
(f) National drug code means the unique, three-segment identifier number used by the FDA to identify drugs that are manufactured, prepared, propagated, compounded, or processed for sale in the United States.
(g) Third party means a person, other than a PBM, that is not an enrollee in or a covered person under a health benefit plan.
Source: L. 2021: Entire section added, (HB 21-1297), ch. 452, p. 2994, � 5, effective July 6. L. 2023: (1.5) and (1.7) added, (HB 23-1227), ch. 160, p. 696, � 6, effective August 7.
Cross references: (1) For additional definitions applicable to this section, see � 10-16-122.1.
(2) For the legislative declaration in HB 21-1297, see section 1 of chapter 452, Session Laws of Colorado 2021.