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SB 1336 - Pharmacy benefit managers

SB 1336 - Pharmacy benefit managers

Phil Haunschild
March 7, 2018

Bill description: SB 1336 would regulate the practice of pharmacy benefit managers.

Rating: -2

Does it give government any new, additional, or expanded power to prohibit, restrict, or regulate activities in the free market? Conversely, does it eliminate or reduce government intervention in the market? 

Pharmacy benefit managers are private companies that act as intermediaries between pharmaceutical companies, pharmacies, and patients. They negotiate prices, manage distribution networks, and process claims, and provide other services.

SB 1336 would regulate the practice of these companies. This bill would establish the Pharmacy Benefit Manager Transparency Act, which includes licensing provisions, audit requirements, mandatory bonding (in the case of unaudited financial statements), and prohibits these companies from taking certain actions such as specifying where individuals can receive prescription medications or specifying which pharmacies can participate in their services.


Does it increase barriers to entry into the market? Examples include occupational licensure, the minimum wage, and restrictions on home businesses. Conversely, does it remove barriers to entry into the market? 

SB 1336 would require pharmacy benefit managers to obtain a license from the state Department of Insurance in order to operate in Idaho. To obtain this license, the company would have to provide the director of the Department of Insurance with:

  • All organizational documents
  • The names, addresses, titles, and qualifications of the members of the board of directors and officers or the partners or owners in the case of a partnership or association
  • A detailed description of the claims processing services, pharmacy services, insurance services, other prescription drug or device services or other administrative services provided;
  • Audited financial statements for the current year and the preceding year that show the assets, liabilities, direct or indirect income, and any other sources of financial support sufficient as deemed by the director to show financial stability and viability to meet its obligations to participants and participating pharmacies.
  • The payment of a registration or licensure fee upon application and for every renewal period in an amount set forth by rule, and in no event less than three hundred dollars ($300) nor more than seven hundred dollars ($700);
  • Such other information as the director may require

Companies would be required to provide this information and to renew their licenses annually.


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