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In a previous article, Buchanan Ingersoll & Rooney discussed three pending bills in Ohio that would regulate Pharmacy Benefit Managers (PBMs), including House Bill 229. On October 8, 2025, House Bill 229 successfully passed the House of Representatives by a unanimous 96-0 vote and is now pending before the Ohio State Senate. With longstanding concerns about unfair reimbursement practices and opaque PBM operations finally being addressed, this legislation stands to level the playing field, empowering independent pharmacies and strengthening the broader pharmacy community across the state.
A New Era of Accountability for PBMs
House Bill 229 introduces comprehensive licensing and operational requirements for all PBMs soliciting or serving health plans and plan sponsors headquartered or domiciled in the state. Under the new law, no entity may act as a PBM without first securing a license from the Superintendent of Insurance, a move designed to provide further oversight and accountability.
Key Provisions and Protections
The bill sets forth several critical requirements:
- Licensing & Renewal: All PBMs must apply for licensure through the Superintendent of Insurance, with annual renewal notices issued each May to ensure ongoing compliance.
- Written Agreements: PBMs must enter into written contracts with plan sponsors, detailing the term, scope of services, compensation methods and terms for renewal or termination. These agreements must be retained for at least five years beyond their expiration.
- Financial Integrity: PBMs are expressly prohibited from using plan sponsor funds for any purpose not explicitly authorized in writing and must disclose any ownership relationships with insurance carriers of 5% or more.
- Transparency in Transactions: Written disclosures are required for how plan sponsor funds are collected and held, and PBMs must remit insurance premiums promptly as agreed.
- Recordkeeping: All relevant books and records must be maintained, either electronically or physically, at the PBM's principal or branch office, available for inspection by the Superintendent of Insurance.
Enhanced Oversight and Consumer Protections
The Superintendent of Insurance will have expanded authority to examine PBM records, including:
- Rebate Transparency: Detailed reporting of aggregate rebates received, distributed to plan sponsors, and passed on to enrollees at the point of sale.
- Payment Clarity: Itemized records of payments made by and to PBMs for pharmacist services, categorized by pharmacy, product and service type.
Additionally, House Bill 229 addresses concerns about fair reimbursement by prohibiting PBMs from reimbursing non-affiliated pharmacies at lower rates than their own affiliates for identical services - a significant step to level the playing field for independent pharmacists.
Looking Ahead
With House Bill 229 now moving to the Senate, the state is poised to set a new standard for PBM oversight, aiming to protect consumers, ensure fair competition and foster greater transparency in prescription drug pricing. Industry stakeholders, healthcare providers and consumers alike will benefit from these reforms, which are designed to build trust and integrity into the administration of pharmacy benefits.
The passage of House Bill 229 is a pivotal moment for the pharmacy industry. As we await the governor's decision, independent pharmacies and stakeholders should stay engaged, share feedback with policymakers and prepare for a more transparent and equitable future.
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