For Pharmacies
Pharmacists will see the benefits of the consumer protection provisions required by Act 77 for PBM and health insurer/health benefit plan contracts (relating to rebates and reimbursement patient steering, clawbacks, and network adequacy) of Act 77 over the next two years. Act 77 will apply to prescription drug coverage under a health benefit plan for which the form or rate is approved on or after October 15, 2024.
Individual policies, either purchased through Pennie® or purchased directly from an insurance company will include the Act 77 protections beginning January 2026.
Many large employer group (more than 50 employees) fully-funded health benefit plans will include the Act 77 protections by mid-2025, others will start seeing the benefits in 2026.
Most small employer group (2-50 employees) fully-funded health benefit plans will include the Act 77 protections beginning January 2026.
Act 77 requires the Department to publish a non-exclusive list of “specialty drugs" as well as guidance on how a pharmacy can request a review of a specialty drug designation by January 13, 2025. Please check back soon for updates.
Beginning January 13, 2025, a pharmacy can refer a specialty drug designation made by a health plan, health insurer, or PBM to the Department for review. However, it is important to keep in mind that in order for the Department to have jurisdiction over the referral, it must involve a designation made with respect to a fully-funded health benefit plan.
No. Act 77 only applies to fully-funded health benefit plans. There are other types of plans to which it does not apply, such as self-funded employer plans, Medicare, Medigap, Medicaid, CHIP, and TriCare Supplemental insurance. Almost all of those plans are subject to federal law. In addition, there are some types of Pennsylvania insurance policies, such as fixed indemnity or limited benefit plans, long-term care, disability, dental, vision, worker's compensation, and automobile medical payment coverage, to which Act 77 does not apply.
For PBMs
PBMs should be making plans immediately to comply with the different provisions of the law.
Contracts with Health Benefit Plans and Health Insurers: New contracts, and amendments to or renewals of current contracts, will need to comply with Act 77 by early 2025, so that they can apply to any prescription drug coverage provided under a health benefit plan for which the form or rate is approved on or after October 15, 2024. The contracts will need to comply with the Act 77 contract provisions, patient steering and clawback prohibitions, and network adequacy requirements.
Contracts with Pharmacies: Contracts between Pharmacies and PBMs who are conducting business on behalf of health insurer clients that are issued, renewed, or amended after October 15, 2024, must comply with the requirements of section 601 of the Act (pertaining to reimbursement, pharmacy participation, specialty drug designations, pass-through of rebates, and information regarding fees for network participation).
Network Adequacy Reporting - The first Network Adequacy Report will be due April 1, 2026.
Transparency Reporting - The first Transparency Report will be due July 1, 2026
For Everyone:
Look for helpful information to be provided soon. This information will include:
- Updated PBM/Auditing Entity registration process;
- PSAO registration process;
- Network adequacy reporting form;
- PBM Transparency reporting form;
- Guidance for pharmacies to submit specialty drug designation referrals; and
- Specialty drug referral form.
Additional information can be found on the Consumer-focused Pharmacy Benefit Reform Act page.
Information for Licensees can be found on the Pharmacy Benefit Manager and Auditing Entity Registration page.
Full Implementation Schedule
| Operative Provision | Effective/Due Date & Next Steps |
|---|---|
| Specialty Drug Referral Process Guidance | Guidance will be published on the Department’s website and in the PA Bulletin on or before January 13, 2025. |
| Contract Provisions of Section 601 (re: contracts between PBMs conducting business on behalf of a health insurer client and Pharmacies) | Apply to provisions of contracts issued, renewed, or amended after October 15, 2024, applicable to health insurer clients of the PBM. |
| PSAO Registration | Online registration is available. Visit the Pharmacy Benefit Registration page for more information. |
| PSAO Change of Control Reporting | Form for change of control reporting to be posted to the Department’s website in advance of the November 14, 2024, effective date. |
| Increased Fee for PBMs and Auditing Entities | Online registration and renewal, with the increased fee, will begin on November 14, 2024. Visit the Pharmacy Benefit Registration page for more information. |
| Study on Spread Pricing and Dispending Fees | The Department will begin the process of conducting this study after the effective date of this provision (November 14, 2024). |
| Patient Steering/Clawbacks/ Network Adequacy Standards | These requirements will apply to contracts for which rates/forms are approved on or after October 15, 2024, as follows†:
|
| Network Adequacy Reporting | Network Adequacy Report Form for this report will be posted on the PID website by April 2025. Reports are due annually beginning April 1, 2026. |
| Transparency Reporting | Transparency Reporting Template for this report will be posted on the PID website by April 2025. Reports are due annually beginning July 1, 2026 (with publication within 60 days of receipt). |
† Applies only to fully-funded health benefit plans; individuals covered through a large or small group plan may contact their human resources or benefits administrator to learn whether their plan is a fully-funded health benefit plan subject to Act 77 or a self-funded plan not subject to this law. For individuals covered through a large group fully-funded health benefit plan, the covered individual may also contact their human resources or benefits administration to learn when the new plan year begins.