North Dakota Insurance Commissioner: 25 PBMs Face Licensing Compliance Deadline

• North Dakota Insurance Commissioner Jon Godfread notified 25 pharmacy benefit managers (PBMs) of apparent unlicensed activity.
• These PBMs must submit a complete license application within 20 days of receiving notice to avoid cease-and-desist orders.
• Failure to comply will result in cease-and-desist orders, along with additional penalties and fines.
• The enforcement actions stem from House Bill 1584, which created a dedicated PBM Division and expanded the Commissioner's authority.
• The state aims to ensure PBM accountability and protect consumers by enforcing licensing requirements, which impact drug pricing and pharmacy reimbursement.

Conversely, any PBM that fails to meet this requirement will not only face a cease-and-desist order but will also incur additional penalties and financial fines as a direct consequence of their non-compliance.

The North Dakota Insurance Commissioner, Jon Godfread, has recently issued notifications to 25 pharmacy benefit managers, citing indications of their operation within the state without the necessary licensure. These entities, which act as intermediaries connecting insurers, pharmacies, and pharmaceutical manufacturers, are now facing a critical deadline. Each PBM has a window of 20 days from the receipt of their respective notice to submit a comprehensive license application to the North Dakota Insurance and Securities Department.

This directive provides an explicit pathway for these PBMs to voluntarily align with state regulations. Should a PBM successfully submit a complete application within the stipulated 20-day timeframe, the Department will proceed with the application's review through its standard procedures, and no cease-and-desist order will be issued against that entity. Conversely, any PBM that fails to meet this requirement will not only face a cease-and-desist order but will also incur additional penalties and financial fines as a direct consequence of their non-compliance. This immediate action underscores a heightened focus on North Dakota PBM licensing compliance.

This recent wave of enforcement actions is a direct outcome of legislative changes introduced by House Bill 1584, which was enacted during the 2025 Legislative Assembly. This significant piece of legislation established a specialized PBM Division within the North Dakota Insurance and Securities Department. Furthermore, HB 1584 substantially broadened the authority of the Insurance Commissioner, empowering the office to more effectively investigate and enforce state statutes governing the operations and practices of pharmacy benefit managers.

The establishment of this dedicated division and the expansion of the Commissioner's powers signal a robust new regulatory environment for PBMs operating in North Dakota. Licensing is explicitly identified as a fundamental component of the Department's comprehensive oversight strategy for these organizations. This enhanced framework aims to ensure that all entities influencing prescription drug markets within the state adhere strictly to legal requirements, thereby reinforcing North Dakota pharmacy benefit manager license mandates.

The operations of pharmacy benefit managers carry significant weight for North Dakota residents and local businesses. These organizations play a pivotal role in determining prescription drug pricing, influencing insurance coverage parameters, and dictating reimbursement rates for pharmacies. Consequently, their activities directly impact the costs North Dakotans bear for their medications and the financial viability of local pharmacies, which are crucial for community health services.

Commissioner Jon Godfread emphasized that these 25 notices serve as a clear demonstration of North Dakota's unwavering commitment to upholding accountability, safeguarding consumers, and ensuring that all entities conducting business within the state operate within the bounds of the law. He further articulated that the 20-day compliance window is designed to preempt any further adverse effects on consumers, allowing PBMs an opportunity to rectify their status before more stringent enforcement measures are initiated. The ND Insurance Department PBM notice is a critical step in this process. The Department has affirmed its intention to continuously monitor compliance and leverage its expanded enforcement authority to protect North Dakota consumers from potentially harmful PBM practices.

Lawyers representing Pharmacy Benefit Managers (PBMs) operating in North Dakota must immediately advise clients to submit a complete license application within 20 days of receiving notice from the North Dakota Insurance Department to avoid cease-and-desist orders, penalties, and fines under new enforcement authority established by House Bill 1584. This signals a heightened regulatory environment for PBMs in the state.

Source: Original reporting via North Dakota Insurance Department.