The Maryland Insurance Administration is warning insurance carriers that they can only contract with pharmacy benefit managers that have registered with the state, beginning July 1.

The registration requirement was passed by the Maryland General Assembly in 2008 in House Bill 419, but does not take full effect until July 1, according to MIA Bulletin 09-16. Pharmacy benefit management companies were permitted to continue to act as PBMs without registration during the transition period. Companies register for two years.

PBMs manage an estimated 70% of prescriptions dispensed through retail pharmacies covered by a health insurance company, according to a fiscal note for the bill. About 95% of all patients with prescription drug coverage receive benefits through PBMs.

MIA records recently showed a total of 19 companies had registered as PBMs, as of June 25.

More than 100 PBMs operate in the U.S., although the industry is dominated by three companies, CVS Caremark, Express Scripts and Medco, according to the fiscal note included with the bill.

Since 2003, 36 states and Washington, D.C., have introduced legislation to regulate PBMs.

Maryland legislators failed to act on a similar proposal introduced in 2007.