Bill Text: IL HB1159 | 2025-2026 | 104th General Assembly | Introduced

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Bill Title: Amends the Illinois Insurance Code. Defines "health benefit plan" and other terms. Provides that a pharmacy benefit manager or an affiliate acting on the pharmacy benefit manager's behalf is prohibited from conducting spread pricing, from steering a covered individual, and from limiting a covered individual's access to prescription drugs from a pharmacy or pharmacist enrolled with the health benefit plan under the terms offered to all pharmacies in the plan coverage area by unreasonably designating the covered prescription drugs as a specialty drug. Provides that a pharmacy benefit manager or an affiliate acting on the pharmacy benefit manager's behalf must remit 100% of rebates and fees to the health benefit plan sponsor, consumer, or employer. Provides that a pharmacy benefit manager may not reimburse a pharmacy or pharmacist for a prescription drug or pharmacy service in an amount less than the national average drug acquisition cost for the prescription drug or pharmacy service at the time the drug is administered or dispensed, plus a professional dispensing fee. Provides that a contract between a pharmacy benefit manager and an insurer or health benefit plan sponsor must allow and provide for the pharmacy benefit manager's compliance with an audit at least once per calendar year of the rebate and fee records remitted from a pharmacy benefit manager or its contracted party to a health benefit plan. Provides that provisions concerning pharmacy benefit manager contracts apply to any health benefit plan (instead of any group or individual policy of accident and health insurance or managed care plan) that provides coverage for prescription drugs and that is amended, delivered, issued, or renewed on or after July 1, 2020. Requires a pharmacy benefit manager to submit an annual report that includes specified information concerning prescription drugs. Makes other changes. Amends the Freedom of Information Act to make a conforming change. Effective July 1, 2025.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (N/A) 2025-01-06 - Prefiled with Clerk by Rep. Thaddeus Jones [HB1159 Detail]

Download: Illinois-2025-HB1159-Introduced.html

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104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026 HB1159 Introduced , by Rep. Thaddeus Jones SYNOPSIS AS INTRODUCED:
5 ILCS 140/7
215 ILCS 5/513b1
215 ILCS 5/513b1.5 new
Amends the Illinois Insurance Code. Defines "health benefit plan" and other terms. Provides that a pharmacy benefit manager or an affiliate acting on the pharmacy benefit manager's behalf is prohibited from conducting spread pricing, from steering a covered individual, and from limiting a covered individual's access to prescription drugs from a pharmacy or pharmacist enrolled with the health benefit plan under the terms offered to all pharmacies in the plan coverage area by unreasonably designating the covered prescription drugs as a specialty drug. Provides that a pharmacy benefit manager or an affiliate acting on the pharmacy benefit manager's behalf must remit 100% of rebates and fees to the health benefit plan sponsor, consumer, or employer. Provides that a pharmacy benefit manager may not reimburse a pharmacy or pharmacist for a prescription drug or pharmacy service in an amount less than the national average drug acquisition cost for the prescription drug or pharmacy service at the time the drug is administered or dispensed, plus a professional dispensing fee. Provides that a contract between a pharmacy benefit manager and an insurer or health benefit plan sponsor must allow and provide for the pharmacy benefit manager's compliance with an audit at least once per calendar year of the rebate and fee records remitted from a pharmacy benefit manager or its contracted party to a health benefit plan. Provides that provisions concerning pharmacy benefit manager contracts apply to any health benefit plan (instead of any group or individual policy of accident and health insurance or managed care plan) that provides coverage for prescription drugs and that is amended, delivered, issued, or renewed on or after July 1, 2020. Requires a pharmacy benefit manager to submit an annual report that includes specified information concerning prescription drugs. Makes other changes. Amends the Freedom of Information Act to make a conforming change. Effective July 1, 2025.
LRB104 06506 BAB 16542 b
A BILL FOR
HB1159 LRB104 06506 BAB 16542 b
AN ACT concerning regulation.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Freedom of Information Act is amended by
changing Section 7 as follows:
(5 ILCS 140/7)
Sec. 7. Exemptions.
(1) When a request is made to inspect or copy a public
record that contains information that is exempt from
disclosure under this Section, but also contains information
that is not exempt from disclosure, the public body may elect
to redact the information that is exempt. The public body
shall make the remaining information available for inspection
and copying. Subject to this requirement, the following shall
be exempt from inspection and copying:
(a) Information specifically prohibited from
disclosure by federal or State law or rules and
regulations implementing federal or State law.
(b) Private information, unless disclosure is required
by another provision of this Act, a State or federal law,
or a court order.
(b-5) Files, documents, and other data or databases
maintained by one or more law enforcement agencies and

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specifically designed to provide information to one or
more law enforcement agencies regarding the physical or
mental status of one or more individual subjects.
(c) Personal information contained within public
records, the disclosure of which would constitute a
clearly unwarranted invasion of personal privacy, unless
the disclosure is consented to in writing by the
individual subjects of the information. "Unwarranted
invasion of personal privacy" means the disclosure of
information that is highly personal or objectionable to a
reasonable person and in which the subject's right to
privacy outweighs any legitimate public interest in
obtaining the information. The disclosure of information
that bears on the public duties of public employees and
officials shall not be considered an invasion of personal
privacy.
(d) Records in the possession of any public body
created in the course of administrative enforcement
proceedings, and any law enforcement or correctional
agency for law enforcement purposes, but only to the
extent that disclosure would:
(i) interfere with pending or actually and
reasonably contemplated law enforcement proceedings
conducted by any law enforcement or correctional
agency that is the recipient of the request;
(ii) interfere with active administrative

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enforcement proceedings conducted by the public body
that is the recipient of the request;
(iii) create a substantial likelihood that a
person will be deprived of a fair trial or an impartial
hearing;
(iv) unavoidably disclose the identity of a
confidential source, confidential information
furnished only by the confidential source, or persons
who file complaints with or provide information to
administrative, investigative, law enforcement, or
penal agencies; except that the identities of
witnesses to traffic crashes, traffic crash reports,
and rescue reports shall be provided by agencies of
local government, except when disclosure would
interfere with an active criminal investigation
conducted by the agency that is the recipient of the
request;
(v) disclose unique or specialized investigative
techniques other than those generally used and known
or disclose internal documents of correctional
agencies related to detection, observation, or
investigation of incidents of crime or misconduct, and
disclosure would result in demonstrable harm to the
agency or public body that is the recipient of the
request;
(vi) endanger the life or physical safety of law

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enforcement personnel or any other person; or
(vii) obstruct an ongoing criminal investigation
by the agency that is the recipient of the request.
(d-5) A law enforcement record created for law
enforcement purposes and contained in a shared electronic
record management system if the law enforcement agency
that is the recipient of the request did not create the
record, did not participate in or have a role in any of the
events which are the subject of the record, and only has
access to the record through the shared electronic record
management system.
(d-6) Records contained in the Officer Professional
Conduct Database under Section 9.2 of the Illinois Police
Training Act, except to the extent authorized under that
Section. This includes the documents supplied to the
Illinois Law Enforcement Training Standards Board from the
Illinois State Police and Illinois State Police Merit
Board.
(d-7) Information gathered or records created from the
use of automatic license plate readers in connection with
Section 2-130 of the Illinois Vehicle Code.
(e) Records that relate to or affect the security of
correctional institutions and detention facilities.
(e-5) Records requested by persons committed to the
Department of Corrections, Department of Human Services
Division of Mental Health, or a county jail if those

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materials are available in the library of the correctional
institution or facility or jail where the inmate is
confined.
(e-6) Records requested by persons committed to the
Department of Corrections, Department of Human Services
Division of Mental Health, or a county jail if those
materials include records from staff members' personnel
files, staff rosters, or other staffing assignment
information.
(e-7) Records requested by persons committed to the
Department of Corrections or Department of Human Services
Division of Mental Health if those materials are available
through an administrative request to the Department of
Corrections or Department of Human Services Division of
Mental Health.
(e-8) Records requested by a person committed to the
Department of Corrections, Department of Human Services
Division of Mental Health, or a county jail, the
disclosure of which would result in the risk of harm to any
person or the risk of an escape from a jail or correctional
institution or facility.
(e-9) Records requested by a person in a county jail
or committed to the Department of Corrections or
Department of Human Services Division of Mental Health,
containing personal information pertaining to the person's
victim or the victim's family, including, but not limited

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to, a victim's home address, home telephone number, work
or school address, work telephone number, social security
number, or any other identifying information, except as
may be relevant to a requester's current or potential case
or claim.
(e-10) Law enforcement records of other persons
requested by a person committed to the Department of
Corrections, Department of Human Services Division of
Mental Health, or a county jail, including, but not
limited to, arrest and booking records, mug shots, and
crime scene photographs, except as these records may be
relevant to the requester's current or potential case or
claim.
(f) Preliminary drafts, notes, recommendations,
memoranda, and other records in which opinions are
expressed, or policies or actions are formulated, except
that a specific record or relevant portion of a record
shall not be exempt when the record is publicly cited and
identified by the head of the public body. The exemption
provided in this paragraph (f) extends to all those
records of officers and agencies of the General Assembly
that pertain to the preparation of legislative documents.
(g) Trade secrets and commercial or financial
information obtained from a person or business where the
trade secrets or commercial or financial information are
furnished under a claim that they are proprietary,

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privileged, or confidential, and that disclosure of the
trade secrets or commercial or financial information would
cause competitive harm to the person or business, and only
insofar as the claim directly applies to the records
requested.
The information included under this exemption includes
all trade secrets and commercial or financial information
obtained by a public body, including a public pension
fund, from a private equity fund or a privately held
company within the investment portfolio of a private
equity fund as a result of either investing or evaluating
a potential investment of public funds in a private equity
fund. The exemption contained in this item does not apply
to the aggregate financial performance information of a
private equity fund, nor to the identity of the fund's
managers or general partners. The exemption contained in
this item does not apply to the identity of a privately
held company within the investment portfolio of a private
equity fund, unless the disclosure of the identity of a
privately held company may cause competitive harm.
Nothing contained in this paragraph (g) shall be
construed to prevent a person or business from consenting
to disclosure.
(h) Proposals and bids for any contract, grant, or
agreement, including information which if it were
disclosed would frustrate procurement or give an advantage

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to any person proposing to enter into a contractor
agreement with the body, until an award or final selection
is made. Information prepared by or for the body in
preparation of a bid solicitation shall be exempt until an
award or final selection is made.
(i) Valuable formulae, computer geographic systems,
designs, drawings, and research data obtained or produced
by any public body when disclosure could reasonably be
expected to produce private gain or public loss. The
exemption for "computer geographic systems" provided in
this paragraph (i) does not extend to requests made by
news media as defined in Section 2 of this Act when the
requested information is not otherwise exempt and the only
purpose of the request is to access and disseminate
information regarding the health, safety, welfare, or
legal rights of the general public.
(j) The following information pertaining to
educational matters:
(i) test questions, scoring keys, and other
examination data used to administer an academic
examination;
(ii) information received by a primary or
secondary school, college, or university under its
procedures for the evaluation of faculty members by
their academic peers;
(iii) information concerning a school or

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university's adjudication of student disciplinary
cases, but only to the extent that disclosure would
unavoidably reveal the identity of the student; and
(iv) course materials or research materials used
by faculty members.
(k) Architects' plans, engineers' technical
submissions, and other construction related technical
documents for projects not constructed or developed in
whole or in part with public funds and the same for
projects constructed or developed with public funds,
including, but not limited to, power generating and
distribution stations and other transmission and
distribution facilities, water treatment facilities,
airport facilities, sport stadiums, convention centers,
and all government owned, operated, or occupied buildings,
but only to the extent that disclosure would compromise
security.
(l) Minutes of meetings of public bodies closed to the
public as provided in the Open Meetings Act until the
public body makes the minutes available to the public
under Section 2.06 of the Open Meetings Act.
(m) Communications between a public body and an
attorney or auditor representing the public body that
would not be subject to discovery in litigation, and
materials prepared or compiled by or for a public body in
anticipation of a criminal, civil, or administrative

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proceeding upon the request of an attorney advising the
public body, and materials prepared or compiled with
respect to internal audits of public bodies.
(n) Records relating to a public body's adjudication
of employee grievances or disciplinary cases; however,
this exemption shall not extend to the final outcome of
cases in which discipline is imposed.
(o) Administrative or technical information associated
with automated data processing operations, including, but
not limited to, software, operating protocols, computer
program abstracts, file layouts, source listings, object
modules, load modules, user guides, documentation
pertaining to all logical and physical design of
computerized systems, employee manuals, and any other
information that, if disclosed, would jeopardize the
security of the system or its data or the security of
materials exempt under this Section.
(p) Records relating to collective negotiating matters
between public bodies and their employees or
representatives, except that any final contract or
agreement shall be subject to inspection and copying.
(q) Test questions, scoring keys, and other
examination data used to determine the qualifications of
an applicant for a license or employment.
(r) The records, documents, and information relating
to real estate purchase negotiations until those

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negotiations have been completed or otherwise terminated.
With regard to a parcel involved in a pending or actually
and reasonably contemplated eminent domain proceeding
under the Eminent Domain Act, records, documents, and
information relating to that parcel shall be exempt except
as may be allowed under discovery rules adopted by the
Illinois Supreme Court. The records, documents, and
information relating to a real estate sale shall be exempt
until a sale is consummated.
(s) Any and all proprietary information and records
related to the operation of an intergovernmental risk
management association or self-insurance pool or jointly
self-administered health and accident cooperative or pool.
Insurance or self-insurance (including any
intergovernmental risk management association or
self-insurance pool) claims, loss or risk management
information, records, data, advice, or communications.
(t) Information contained in or related to
examination, operating, or condition reports prepared by,
on behalf of, or for the use of a public body responsible
for the regulation or supervision of financial
institutions, insurance companies, or pharmacy benefit
managers, unless disclosure is otherwise required by State
law.
(u) Information that would disclose or might lead to
the disclosure of secret or confidential information,

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codes, algorithms, programs, or private keys intended to
be used to create electronic signatures under the Uniform
Electronic Transactions Act.
(v) Vulnerability assessments, security measures, and
response policies or plans that are designed to identify,
prevent, or respond to potential attacks upon a
community's population or systems, facilities, or
installations, but only to the extent that disclosure
could reasonably be expected to expose the vulnerability
or jeopardize the effectiveness of the measures, policies,
or plans, or the safety of the personnel who implement
them or the public. Information exempt under this item may
include such things as details pertaining to the
mobilization or deployment of personnel or equipment, to
the operation of communication systems or protocols, to
cybersecurity vulnerabilities, or to tactical operations.
(w) (Blank).
(x) Maps and other records regarding the location or
security of generation, transmission, distribution,
storage, gathering, treatment, or switching facilities
owned by a utility, by a power generator, or by the
Illinois Power Agency.
(y) Information contained in or related to proposals,
bids, or negotiations related to electric power
procurement under Section 1-75 of the Illinois Power
Agency Act and Section 16-111.5 of the Public Utilities

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Act that is determined to be confidential and proprietary
by the Illinois Power Agency or by the Illinois Commerce
Commission.
(z) Information about students exempted from
disclosure under Section 10-20.38 or 34-18.29 of the
School Code, and information about undergraduate students
enrolled at an institution of higher education exempted
from disclosure under Section 25 of the Illinois Credit
Card Marketing Act of 2009.
(aa) Information the disclosure of which is exempted
under the Viatical Settlements Act of 2009.
(bb) Records and information provided to a mortality
review team and records maintained by a mortality review
team appointed under the Department of Juvenile Justice
Mortality Review Team Act.
(cc) Information regarding interments, entombments, or
inurnments of human remains that are submitted to the
Cemetery Oversight Database under the Cemetery Care Act or
the Cemetery Oversight Act, whichever is applicable.
(dd) Correspondence and records (i) that may not be
disclosed under Section 11-9 of the Illinois Public Aid
Code or (ii) that pertain to appeals under Section 11-8 of
the Illinois Public Aid Code.
(ee) The names, addresses, or other personal
information of persons who are minors and are also
participants and registrants in programs of park

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districts, forest preserve districts, conservation
districts, recreation agencies, and special recreation
associations.
(ff) The names, addresses, or other personal
information of participants and registrants in programs of
park districts, forest preserve districts, conservation
districts, recreation agencies, and special recreation
associations where such programs are targeted primarily to
minors.
(gg) Confidential information described in Section
1-100 of the Illinois Independent Tax Tribunal Act of
2012.
(hh) The report submitted to the State Board of
Education by the School Security and Standards Task Force
under item (8) of subsection (d) of Section 2-3.160 of the
School Code and any information contained in that report.
(ii) Records requested by persons committed to or
detained by the Department of Human Services under the
Sexually Violent Persons Commitment Act or committed to
the Department of Corrections under the Sexually Dangerous
Persons Act if those materials: (i) are available in the
library of the facility where the individual is confined;
(ii) include records from staff members' personnel files,
staff rosters, or other staffing assignment information;
or (iii) are available through an administrative request
to the Department of Human Services or the Department of

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Corrections.
(jj) Confidential information described in Section
5-535 of the Civil Administrative Code of Illinois.
(kk) The public body's credit card numbers, debit card
numbers, bank account numbers, Federal Employer
Identification Number, security code numbers, passwords,
and similar account information, the disclosure of which
could result in identity theft or impression or defrauding
of a governmental entity or a person.
(ll) Records concerning the work of the threat
assessment team of a school district, including, but not
limited to, any threat assessment procedure under the
School Safety Drill Act and any information contained in
the procedure.
(mm) Information prohibited from being disclosed under
subsections (a) and (b) of Section 15 of the Student
Confidential Reporting Act.
(nn) Proprietary information submitted to the
Environmental Protection Agency under the Drug Take-Back
Act.
(oo) Records described in subsection (f) of Section
3-5-1 of the Unified Code of Corrections.
(pp) Any and all information regarding burials,
interments, or entombments of human remains as required to
be reported to the Department of Natural Resources
pursuant either to the Archaeological and Paleontological

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Resources Protection Act or the Human Remains Protection
Act.
(qq) Reports described in subsection (e) of Section
16-15 of the Abortion Care Clinical Training Program Act.
(rr) Information obtained by a certified local health
department under the Access to Public Health Data Act.
(ss) For a request directed to a public body that is
also a HIPAA-covered entity, all information that is
protected health information, including demographic
information, that may be contained within or extracted
from any record held by the public body in compliance with
State and federal medical privacy laws and regulations,
including, but not limited to, the Health Insurance
Portability and Accountability Act and its regulations, 45
CFR Parts 160 and 164. As used in this paragraph,
"HIPAA-covered entity" has the meaning given to the term
"covered entity" in 45 CFR 160.103 and "protected health
information" has the meaning given to that term in 45 CFR
160.103.
(tt) Proposals or bids submitted by engineering
consultants in response to requests for proposal or other
competitive bidding requests by the Department of
Transportation or the Illinois Toll Highway Authority.
(uu) Annual reports submitted by pharmacy benefit
managers under Section 513b1.5 of the Illinois Insurance
Code, except for the summary versions of the reports under

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paragraph (3) of subsection (b) of Section 513b1.5 of the
Illinois Insurance Code.
(1.5) Any information exempt from disclosure under the
Judicial Privacy Act shall be redacted from public records
prior to disclosure under this Act.
(2) A public record that is not in the possession of a
public body but is in the possession of a party with whom the
agency has contracted to perform a governmental function on
behalf of the public body, and that directly relates to the
governmental function and is not otherwise exempt under this
Act, shall be considered a public record of the public body,
for purposes of this Act.
(3) This Section does not authorize withholding of
information or limit the availability of records to the
public, except as stated in this Section or otherwise provided
in this Act.
(Source: P.A. 102-38, eff. 6-25-21; 102-558, eff. 8-20-21;
102-694, eff. 1-7-22; 102-752, eff. 5-6-22; 102-753, eff.
1-1-23; 102-776, eff. 1-1-23; 102-791, eff. 5-13-22; 102-982,
eff. 7-1-23; 102-1055, eff. 6-10-22; 103-154, eff. 6-30-23;
103-423, eff. 1-1-24; 103-446, eff. 8-4-23; 103-462, eff.
8-4-23; 103-540, eff. 1-1-24; 103-554, eff. 1-1-24; 103-605,
eff. 7-1-24; 103-865, eff. 1-1-25.)
Section 10. The Illinois Insurance Code is amended by
changing Section 513b1 and by adding Section 513b1.5 as

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follows:
(215 ILCS 5/513b1)
Sec. 513b1. Pharmacy benefit manager contracts.
(a) As used in this Section:
"340B drug discount program" means the program established
under Section 340B of the federal Public Health Service Act,
42 U.S.C. 256b.
"340B entity" means a covered entity as defined in 42
U.S.C. 256b(a)(4) authorized to participate in the 340B drug
discount program.
"340B pharmacy" means any pharmacy used to dispense 340B
drugs for a covered entity, whether entity-owned or external.
"Biological product" has the meaning ascribed to that term
in Section 19.5 of the Pharmacy Practice Act.
"Covered individual" means a member, participant,
enrollee, contract holder, policyholder, or beneficiary of a
health benefit plan who is provided a prescription drug
benefit by the health benefit plan.
"Health benefit plan" means a policy, contract,
certificate, or agreement entered into, offered, or issued by
an insurer to provide, deliver, arrange for, pay for, or
reimburse any of the costs of physical, mental, or behavioral
health care services. "Health benefit plan" does not include
Medicaid managed care organizations, as defined in Section
5-30.1 of the Illinois Public Aid Code, or employee welfare

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benefit plans subject to the federal Employee Retirement
Income Security Act of 1974.
"Maximum allowable cost" means the maximum amount that a
pharmacy benefit manager will reimburse a pharmacy for the
cost of a drug.
"Maximum allowable cost list" means a list of drugs for
which a maximum allowable cost has been established by a
pharmacy benefit manager.
"Pharmacy benefit manager" means a person, business, or
entity, including a wholly or partially owned or controlled
subsidiary of a pharmacy benefit manager, that provides claims
processing services or other prescription drug or device
services, or both, for health benefit plans.
"Rebate aggregator" means a person or entity that
negotiates rebates, discounts, or other fees attributable to
usage by covered individuals with drug manufacturers on behalf
of pharmacy benefit managers or their clients and may also be
involved in contracts that entitle the rebate aggregator or
its client to receive rebates, discounts, or other fees
attributable to usage by covered individuals from drug
manufacturers based on drug utilization or administration.
"Retail price" means the price an individual without
prescription drug coverage would pay at a retail pharmacy, not
including a pharmacist dispensing fee.
"Spread pricing" means the model of prescription drug
pricing in which the pharmacy benefit manager charges a health

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benefit plan a contracted price for prescription drugs and the
contracted price for the prescription drugs differs from the
amount the pharmacy benefit manager directly or indirectly
pays the pharmacist or pharmacy for pharmacist services.
"Steer" includes, but is not limited to:
(1) requiring a covered individual to use only a
pharmacy, including a mail-order pharmacy, in which the
pharmacy benefit manager maintains an ownership interest
or control;
(2) offering or implementing a plan design that
encourages a covered individual to use a pharmacy in which
the pharmacy benefit manager maintains an ownership
interest or control, if such plan design increases costs
for the covered individual, including requiring a covered
individual to pay full costs for a prescription if the
covered individual chooses not to use a pharmacy owned or
controlled by the pharmacy benefit manager;
(3) reimbursing a pharmacy or pharmacist for a
pharmaceutical product or pharmacist service in an amount
less than the amount that the pharmacy benefit manager
reimburses itself or an affiliate for providing the same
product or services, unless the pharmacy or pharmacist
contractually agrees to a lower reimbursement amount; or
(4) any other actions determined by the Department by
rule.
"Third-party payer" means any entity that pays for

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prescription drugs on behalf of a patient other than a health
care provider or sponsor of a plan subject to regulation under
Medicare Part D, 42 U.S.C. 1395w-101 et seq.
(b) A contract between a health insurer and a pharmacy
benefit manager must require that the pharmacy benefit
manager:
(1) Update maximum allowable cost pricing information
at least every 7 calendar days.
(2) Maintain a process that will, in a timely manner,
eliminate drugs from maximum allowable cost lists or
modify drug prices to remain consistent with changes in
pricing data used in formulating maximum allowable cost
prices and product availability.
(3) Provide access to its maximum allowable cost list
to each pharmacy or pharmacy services administrative
organization subject to the maximum allowable cost list.
Access may include a real-time pharmacy website portal to
be able to view the maximum allowable cost list. As used in
this Section, "pharmacy services administrative
organization" means an entity operating within the State
that contracts with independent pharmacies to conduct
business on their behalf with third-party payers. A
pharmacy services administrative organization may provide
administrative services to pharmacies and negotiate and
enter into contracts with third-party payers or pharmacy
benefit managers on behalf of pharmacies.

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(4) Provide a process by which a contracted pharmacy
can appeal the provider's reimbursement for a drug subject
to maximum allowable cost pricing. The appeals process
must, at a minimum, include the following:
(A) A requirement that a contracted pharmacy has
14 calendar days after the applicable fill date to
appeal a maximum allowable cost if the reimbursement
for the drug is less than the net amount that the
network provider paid to the supplier of the drug.
(B) A requirement that a pharmacy benefit manager
must respond to a challenge within 14 calendar days of
the contracted pharmacy making the claim for which the
appeal has been submitted.
(C) A telephone number and e-mail address or
website to network providers, at which the provider
can contact the pharmacy benefit manager to process
and submit an appeal.
(D) A requirement that, if an appeal is denied,
the pharmacy benefit manager must provide the reason
for the denial and the name and the national drug code
number from national or regional wholesalers.
(E) A requirement that, if an appeal is sustained,
the pharmacy benefit manager must make an adjustment
in the drug price effective the date the challenge is
resolved and make the adjustment applicable to all
similarly situated network pharmacy providers, as

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determined by the managed care organization or
pharmacy benefit manager.
(5) Allow a plan sponsor whose coverage is
administered by the contracting with a pharmacy benefit
manager an annual right to audit compliance with the terms
of the contract by the pharmacy benefit manager,
including, but not limited to, full disclosure of any and
all rebate amounts secured, whether product specific or
generalized rebates, that were provided to the pharmacy
benefit manager by a pharmaceutical manufacturer.
(6) Allow a plan sponsor whose coverage is
administered by the contracting with a pharmacy benefit
manager to request that the pharmacy benefit manager
disclose the actual amounts paid by the pharmacy benefit
manager to the pharmacy.
(7) Provide notice to the plan sponsor and the party
contracting with the pharmacy benefit manager of any
consideration that the pharmacy benefit manager receives
from the manufacturer for dispense as written
prescriptions once a generic or biologically similar
product becomes available.
(c) In order to place a particular prescription drug on a
maximum allowable cost list, the pharmacy benefit manager
must, at a minimum, ensure that:
(1) if the drug is a generically equivalent drug, it
is listed as therapeutically equivalent and

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pharmaceutically equivalent "A" or "B" rated in the United
States Food and Drug Administration's most recent version
of the "Orange Book" or have an NR or NA rating by
Medi-Span, Gold Standard, or a similar rating by a
nationally recognized reference;
(2) the drug is available for purchase by each
pharmacy in the State from national or regional
wholesalers operating in Illinois; and
(3) the drug is not obsolete.
(d) A pharmacy benefit manager is prohibited from limiting
a pharmacist's ability to disclose whether the cost-sharing
obligation exceeds the retail price for a covered prescription
drug, and the availability of a more affordable alternative
drug, if one is available in accordance with Section 42 of the
Pharmacy Practice Act.
(e) A health benefit plan insurer or pharmacy benefit
manager shall not require a covered individual an insured to
make a payment for a prescription drug at the point of sale in
an amount that exceeds the lesser of:
(1) the applicable cost-sharing amount; or
(2) the retail price of the drug in the absence of
prescription drug coverage.
(f) Unless required by law, a contract between a pharmacy
benefit manager or third-party payer and a 340B entity or 340B
pharmacy shall not contain any provision that:
(1) distinguishes between drugs purchased through the

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340B drug discount program and other drugs when
determining reimbursement or reimbursement methodologies,
or contains otherwise less favorable payment terms or
reimbursement methodologies for 340B entities or 340B
pharmacies when compared to similarly situated non-340B
entities;
(2) imposes any fee, chargeback, or rate adjustment
that is not similarly imposed on similarly situated
pharmacies that are not 340B entities or 340B pharmacies;
(3) imposes any fee, chargeback, or rate adjustment
that exceeds the fee, chargeback, or rate adjustment that
is not similarly imposed on similarly situated pharmacies
that are not 340B entities or 340B pharmacies;
(4) prevents or interferes with an individual's choice
to receive a covered prescription drug from a 340B entity
or 340B pharmacy through any legally permissible means,
except that nothing in this paragraph shall prohibit the
establishment of differing copayments or other
cost-sharing amounts within the health benefit plan for
covered individuals persons who acquire covered
prescription drugs from a nonpreferred or nonparticipating
provider;
(5) excludes a 340B entity or 340B pharmacy from a
pharmacy network on any basis that includes consideration
of whether the 340B entity or 340B pharmacy participates
in the 340B drug discount program;

HB1159 - 26 - LRB104 06506 BAB 16542 b
(6) prevents a 340B entity or 340B pharmacy from using
a drug purchased under the 340B drug discount program; or
(7) any other provision that discriminates against a
340B entity or 340B pharmacy by treating the 340B entity
or 340B pharmacy differently than non-340B entities or
non-340B pharmacies for any reason relating to the
entity's participation in the 340B drug discount program.
As used in this subsection, "pharmacy benefit manager" and
"third-party payer" do not include pharmacy benefit managers
and third-party payers acting on behalf of a Medicaid program
or an employee welfare benefit plan subject to the federal
Employee Retirement Income Security Act of 1974.
(f-5) A pharmacy benefit manager or an affiliate acting on
the pharmacy benefit manager's behalf is prohibited from
conducting spread pricing in this State.
(f-10) A pharmacy benefit manager or an affiliate acting
on the pharmacy benefit manager's behalf shall not steer a
covered individual.
(f-15) A pharmacy benefit manager or an affiliate acting
on the pharmacy benefit manager's behalf must remit 100% of
rebates and fees to the health benefit plan sponsor, consumer,
or employer. Records of rebates and fees remitted from the
pharmacy benefit manager or its contracted party shall be
retained for 7 years.
(f-20) A pharmacy benefit manager may not reimburse a
pharmacy or pharmacist for a prescription drug or pharmacy

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service in an amount less than the national average drug
acquisition cost for the prescription drug or pharmacy service
at the time the drug is administered or dispensed, plus a
professional dispensing fee of $10.49. However, if the
national average drug acquisition cost is not available at the
time a drug is administered or dispensed, a pharmacy benefit
manager may not reimburse in an amount that is less than the
wholesale acquisition cost of the drug, as defined in 42
U.S.C. 1395w-3a(c)(6)(B), plus a professional dispensing fee
of $10.49.
(f-25) A pharmacy benefit manager or an affiliate acting
on the pharmacy benefit manager's behalf is prohibited from
limiting a covered individual's access to prescription drugs
from a pharmacy or pharmacist enrolled with the health benefit
plan under the terms offered to all pharmacies in the plan
coverage area by unreasonably designating the covered
prescription drugs as a specialty drug.
(f-30) The contract between the pharmacy benefit manager
and the insurer or health benefit plan sponsor must allow and
provide for the pharmacy benefit manager's compliance with an
audit at least once per calendar year of the rebate and fee
records remitted from a pharmacy benefit manager or its
contracted party to a health benefit plan. Contracts with
rebate aggregators or drug manufactures must be available for
audit by health benefit plan sponsors or designated third
parties at least once per plan year. Audits shall be performed

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by an auditor selected by the health benefit plan sponsor.
Rebate contracts with rebate aggregators or drug manufactures
shall be available for audit by health benefit plan sponsors.
(g) A violation of this Section by a pharmacy benefit
manager constitutes an unfair or deceptive act or practice in
the business of insurance under Section 424.
(h) A provision that violates subsection (f) in a
contract between a pharmacy benefit manager or a third-party
payer and a 340B entity that is entered into, amended, or
renewed after July 1, 2022 shall be void and unenforceable.
(i)(1) A pharmacy benefit manager may not retaliate
against a pharmacist or pharmacy for disclosing information in
a court, in an administrative hearing, before a legislative
commission or committee, or in any other proceeding, if the
pharmacist or pharmacy has reasonable cause to believe that
the disclosed information is evidence of a violation of a
State or federal law, rule, or regulation.
(2) A pharmacy benefit manager may not retaliate against a
pharmacist or pharmacy for disclosing information to a
government or law enforcement agency, if the pharmacist or
pharmacy has reasonable cause to believe that the disclosed
information is evidence of a violation of a State or federal
law, rule, or regulation.
(3) A pharmacist or pharmacy shall make commercially
reasonable efforts to limit the disclosure of confidential and
proprietary information.

HB1159 - 29 - LRB104 06506 BAB 16542 b
(4) Retaliatory actions against a pharmacy or pharmacist
include cancellation of, restriction of, or refusal to renew
or offer a contract to a pharmacy solely because the pharmacy
or pharmacist has:
(A) made disclosures of information that the
pharmacist or pharmacy has reasonable cause to believe is
evidence of a violation of a State or federal law, rule, or
regulation;
(B) filed complaints with the plan or pharmacy benefit
manager; or
(C) filed complaints against the plan or pharmacy
benefit manager with the Department.
(j) This Section applies to contracts entered into or
renewed on or after July 1, 2022.
(k) This Section applies to any health benefit group or
individual policy of accident and health insurance or managed
care plan that provides coverage for prescription drugs and
that is amended, delivered, issued, or renewed on or after
July 1, 2020.
(Source: P.A. 102-778, eff. 7-1-22; 103-154, eff. 6-30-23;
103-453, eff. 8-4-23.)
(215 ILCS 5/513b1.5 new)
Sec. 513b1.5. Pharmacy benefit manager reporting
requirements.
(a) A pharmacy benefit manager that provides services for

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a health benefit plan must submit an annual report, by no later
than September 1, to the health benefit plan sponsor and
issuer and include the following:
(1) information collected from drug manufacturers on
copayment assistance;
(2) a list of drugs covered by the health benefit
plan, including details such as the brand name, generic
name, number of participants, number of prescription
claims, dosage units, dispensing channel used, wholesale
acquisition cost, net cost, and total out-of-pocket
spending by covered individual;
(3) information on each therapeutic class of drugs;
(4) the amount received by the health benefit plan in
rebates, fees, or discounts related to drug utilization or
spending;
(5) total gross spending on prescription drugs;
(6) total net spending on prescription drugs by the
health benefit plan;
(7) any compensation paid to brokers, consultants,
advisors, or any other individual or firm for referrals,
consideration, or retention by the health benefit plan;
and
(8) an explanation of benefit design parameters
encouraging or requiring covered individuals to use
affiliated pharmacies, the percentage of prescriptions
charged by these pharmacies, and a list of drugs dispensed

HB1159 - 31 - LRB104 06506 BAB 16542 b
by affiliated pharmacies with their associated costs.
(b) Annual reports submitted pursuant to subsection (a):
(1) must be written in plain language to ensure ease
of reading and accessibility;
(2) may only contain summary health information to
ensure plan, coverage, or covered individual information
remains private and confidential;
(3) upon request by a covered individual, must be
available in summary format and provide aggregated
information to help covered individuals understand their
health benefit plan's prescription drug coverage; and
(4) must be filed with the Department no later than
September 1 of each year via the System for Electronic
Rates & Forms Filing. The filing shall include the summary
version of the report described in paragraph (3) of this
subsection, which shall be marked for public access.
(c) A pharmacy benefit manager may petition the Department
for a filing submission extension. The Director may grant or
deny the extension within 5 business days after receiving the
petition.
(d) Failure by a pharmacy benefit manager to submit an
annual report to the Department may result in a fine levied by
the Director not to exceed $1,000 per day. Funds derived from
fines levied shall be deposited into the Insurance Producer
Administration Fund. Fine information shall be posted on the
Department's website.

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(e) A pharmacy benefit manager found in violation of
subsection (a) or paragraph (4) of subsection (b) may request
a hearing from the Director within 10 days after being found in
violation.
(f) Except for the summary versions, the annual reports
submitted by pharmacy benefit managers are considered
confidential and privileged for all purposes, including for
purposes of the Freedom of Information Act, a response to a
subpoena, or evidence in a civil action.
(g) A copy of an adverse decision against a pharmacy
benefit manager for failing to submit an annual report to the
Department must be posted to the Department's website.