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    Pennsylvania Insurance Department

    ​​​​​​​​​​​​​​​Pharmacy Benefit Reform Act (Act 77)

    Governor Shapiro signed House Bill 1993 into law on July 17, 2024, as Act 77 of 2024, the Pharmacy Benefit Reform Act.

     

    Act 77 expanded the Pennsylvania Insurance Department's regulatory authority over Pharmacy Benefit Managers (PBMs), changed the registration process for PBMs and Auditing Entities, and introduced a new registration requirement for Pharmacy Services Administrative Organizations (PSAOs).

    Specialty Drug Referral Process
    Guidance on Specialty Drug List

    Overview and Impact

    ​For Pharmacies

    Yes, a pharmacy can refer a specialty drug designation made by a health plan, health insurer, or PBM for us to review. However, it is important to keep in mind that in order for PID to have jurisdiction over the referral, it must involve a designation made with respect to a fully-funded health benefit plan.

    For more information, see our guidance on the specialty drug designation list and the specialty drug designation referral process.

    ​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

    All provisions of Act 77 relating to PBMs are now in effect, and PBMs should now be complying with the law.

    ​Network Adequacy Reporting: The first Network Adequacy Report was due April 1, 2026.

    Transparency Reporting: The first Transparency Report will be due July 1, 2026.

    See Posted Reports

    Full Implementation Schedule

     

    ​​Operative Provision

    ​Effective/Due Date & Next Steps

    ​​Specialty Drug Referral Process Guidance
    		We offer guidance on the specialty drug list and guidance on the specialty drug designation referral process.
    ​​Contract Provisions of Section 601
    		​Apply to contracts between PBMs conducting business on behalf of a health insurer client and pharmacies and provisions of contracts issued, renewed, or amended after October 15, 2024, applicable to health insurer clients of the PBM.
    ​​PSAO Registration
    		To conduct business in Pennsylvania, a PSAO must pay the $500 fee and register with PID. Online registration is available. Visit the Pharmacy Benefit Registration page for more information.​​​​
    ​​PSAO Change of Control Reporting
    		Beginning November 14, 2024, PSAOs have an ongoing obligation to report changes in ownership to PID. Changes of Ownership may be emailed to PID's Company Licensing Division at ra-in-companylicense@pa.gov.​
    ​​Increased Fee for PBMs and Auditing Entities
    		Online registration and renewal, with the increased fee, began on November 14, 2024. Visit the Pharmacy Benefit Registration page for more information.​​​​​​
    ​​Study on Spread Pricing and Dispensing Fees
    		​This provision became effective on November 14, 2024. PID has begun the process of conducting this study.
    ​​Patient Steering/Clawbacks/
    Network Adequacy Standards
    		These requirements now apply to all contracts for which rates/forms have approved on or after October 15, 2024, as follows: 
    • Individual policies – either purchased through Pennie® or purchased directly from an insurance company – were required to include the Act 77 protections beginning January 2026. 
    • Many large employer group (more than 50 employees) fully-funded health benefit plans were required to include the Act 77 protections by mid-2025; the remainder were required to include the Act 77 protections beginning January 2026. 
    • Most small employer group (2-50 employees) fully-funded health benefit plans were required to include the Act 77 protections beginning January 2026.

    These requirements apply 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. 

    ​​Network Adequacy & Transparency Reporting

    Information on network adequacy and transparency reporting can be found on the PBM Reporting Requirements page.

    • Network Adequacy Reports are due annually beginning April 1, 2026. PBM Network Adequacy Reports can be found under the Posted Reports section of our website. 
    • Transparency Reports are due annually beginning July 1, 2026 (with publication within 60 days of receipt).