A Baton Rouge judge has cleared the way for Louisiana Insurance Commissioner Tim Temple’s new pharmacy reimbursement rule, rejecting Express Scripts’ attempt to stop it. The decision lets regulators require pharmacy benefit managers to pay local pharmacies at least the National Average Drug Acquisition Cost plus $9 for a 30-day prescription fill. Independent pharmacists say that floor could finally give some breathing room to neighborhood drugstores that have been operating on razor-thin margins.
Directive 257, issued Feb. 13 by the Louisiana Department of Insurance, orders PBMs and insurers in the state to bring their reimbursement formulas in line with a NADAC-based ingredient price plus a combined $9 adjustment and professional dispensing fee for a 30-day supply, and it concludes that payments below that level are not fair and reasonable under state law, according to the Louisiana Department of Insurance. The directive carves out Medicare, Medicaid and Office of Group Benefits plans, which are not covered by the rule.
What the rule requires
Act 474, passed in 2025, created the framework that required reimbursements to be built from three pieces: the drug acquisition cost, an adjustment markup and a professional dispensing fee. When the law took effect on Jan. 1, regulators said confusion quickly set in over how the dispensing fee should actually be calculated, and a market review found that many commercial formulas either included only a token fee or none at all, as reported by New Orleans CityBusiness.
Why pharmacies pushed for change
Independent pharmacy owners told the department that some PBM formulas pushed reimbursement below what it cost to buy the drugs, especially for common generics. One owner reported being reimbursed only a few dollars for medications such as furosemide while dispensing fees remained nominal, according to reporting by WAFB/KNOE. Owners argued that without a meaningful dispensing fee, each prescription could become a money-loser, putting small-town pharmacies at risk.
Insurers and PBMs respond
The Louisiana Department of Insurance said Express Scripts has agreed to bring its payments into line with Directive 257 and to resolve reimbursement appeals filed on or after March 1, the department announced in a Louisiana Department of Insurance release. Regulators say that agreement, combined with the court ruling, sets the stage for consistent enforcement of dispensing-fee rules across Louisiana.
Legal outlook
Judge Alvin Batiste of the 19th Judicial District Court denied Express Scripts' request for a preliminary injunction after an April 14 hearing and lifted a temporary restraining order that had blocked the department from enforcing the directive, according to New Orleans CityBusiness. Regulators and the department's deputy commissioner have cautioned that higher pharmacy reimbursements could eventually show up in premiums, and PBMs or insurers may continue to test the directive in court even as they adjust their payment formulas.
