Are settlement agreements between the Oklahoma Insurance Commissioner and pharmacy benefit managers public records, or can they be kept confidential?

Plain-English summary

Insurance Commissioner Glen Mulready asked whether settlement agreements his office negotiates with pharmacy benefit managers (PBMs) under the Patient's Right to Pharmacy Choice Act can be kept confidential. The Attorney General said no.

Five takeaways:

1. A settlement reached before charges are filed is not a "final order" under 36 O.S. § 6967(B). Final orders must contain findings of fact and conclusions of law and follow a hearing; settlements have neither.
2. Settlement agreements are public records under the Open Records Act. They were created in the transaction of public business by a public official, so they are subject to ORA requests, subpoenas, civil discovery, and admission in private litigation.
3. The Act's confidentiality clause at 36 O.S. § 6967(A) does not apply to settlements. That provision protects materials gathered "in the course of" an investigation. A settlement comes after the investigation, not during it, so it falls outside the protected category.
4. The Commissioner and a PBM cannot privately agree to keep a settlement confidential. Oklahoma courts have already rejected attempts to "contract around" the Open Records Act (Ross v. City of Owasso) and to stipulate to confidentiality of administrative records (Rivero).
5. The parties cannot use aliases or alternative identifiers to mask who signed the settlement. Privacy concerns are addressed by the ORA's existing exceptions and by limited redaction of clearly exempt material, not by renaming the parties.

What this means for you

If you are a pharmacy benefit manager facing an Insurance Commissioner action

Plan your settlement strategy on the assumption that the agreement will become public. Your name, the conduct alleged, the terms, and any monetary payment will all be visible to competitors, journalists, plaintiff lawyers, and pharmacy trade groups. If those facts are unacceptable, your alternative is to take the case to administrative hearing rather than settle. Whether the hearing record itself is fully public is a separate question, but you cannot get private resolution by agreement alone.

Practical steps:

• Do not insert confidentiality clauses in the agreement; the Commissioner cannot honor them.
• Do not propose alias or "Settling PBM" identifiers; the AG has rejected that approach.
• If specific pieces of the agreement contain genuinely exempt material (for example, trade-secret pricing schedules), structure them so that redaction of exempt portions under 51 O.S. § 24A.5(3) leaves the rest of the agreement intact.
• Assume the agreement will be cited in private civil suits brought by pharmacies or patients.

If you are a pharmacy, pharmacy trade association, or journalist

Settlement agreements between the Insurance Commissioner and any PBM are obtainable by ORA request to the Insurance Department. You do not need to wait for an administrative hearing record. The agreements are also subpoenable in civil litigation against PBMs and admissible into evidence.

If you are the Insurance Commissioner or a regulatory agency lawyer

The opinion forecloses confidentiality clauses in pre-charge settlements as a default practice. You can still settle PBM matters before a notice of hearing, and you can still use the Commissioner's investigative confidentiality under § 6967(A) to protect investigative materials before they are folded into a settlement, but the settlement document itself is a public record once executed. Build your settlement template assuming public release.

If you believe a particular PBM matter genuinely requires confidentiality, the path is to seek a court order with the redaction narrowly tailored to a compelling privacy interest, per the standard articulated in Mitchell. Court approval is what § 24A.30 contemplates; party agreement is not.

If you are an Oklahoma legislator

If the Legislature wants PBM settlements to be confidential, that requires a statutory amendment. The opinion is explicit that "where the Legislature seeks to remove state-held materials from production or disclosure, it explicitly includes that bar in the statute." A targeted amendment to § 6967 could cover pre-charge settlements, but as the statute reads now, settlements are open records.

If you are litigating against a PBM

The opinion confirms that prior settlements are obtainable evidence. They can be used to show prior conduct, to support patterns and practices, and to authenticate disciplinary history.

Common questions

Q: Why are these settlements public when other regulatory investigations are confidential?
A: The investigation files themselves are confidential under § 6967(A) while the investigation is ongoing. The settlement agreement, by contrast, is the disposition of the matter, executed by a public official to dispose of a public charge. Once it exists as a public-business document, the Open Records Act applies.

Q: Could the parties agree on a confidentiality clause and just not disclose unless asked?
A: They could try, but it would be unenforceable. Once an ORA request is made, the agency must produce the document. The contractual confidentiality clause cannot block disclosure under Ross v. City of Owasso.

Q: What about settlement payments? Are those visible too?
A: Yes. Documents reflecting expenditure or receipt of public funds are mandatorily maintained as public records under 51 O.S. § 24A.4.

Q: Can the Commissioner redact anything?
A: Yes, but only specifically exempt material. Examples in the statute include trade secrets, social security numbers, certain personal information, and material protected by an evidentiary privilege. The agency cannot redact the names of the parties or the substantive terms of the deal.

Q: Can the Commissioner refuse a subpoena from a private litigant?
A: Not on confidentiality grounds alone. The opinion is clear that settlement agreements are subject to subpoena and discovery in addition to ORA requests.

Q: Does this affect the confidentiality of investigative materials before a settlement?
A: No. Section 6967(A) still protects materials obtained or created "in the course of" an evaluation, examination, investigation, or review. The opinion only addresses the settlement document itself.

Q: What if a settlement is reached after a notice of hearing is filed?
A: The opinion focuses on pre-charge settlements under § 6966(C), but the Open Records analysis would extend to post-charge dispositions as well, since they are also public-business documents created by a public official.

Background and statutory framework

Oklahoma began regulating PBMs in 2014. In 2019, the Legislature added the Patient's Right to Pharmacy Choice Act (36 O.S. §§ 6959 et seq.), which gave the Insurance Commissioner authority to investigate PBMs and bring administrative actions for compliance violations. Under § 6966(C), the Commissioner can settle with a PBM before formally filing charges. If no settlement is reached, the case proceeds to a hearing before the Patient's Right to Pharmacy Choice Commission under the Administrative Procedures Act.

Three statutes converge on the question of confidentiality:

• The Patient's Right to Pharmacy Choice Act (36 O.S. §§ 6959 et seq.), which contains its own confidentiality clause at § 6967(A) for investigation records.
• The Open Records Act (51 O.S. §§ 24A.1 et seq.), which establishes the default rule that records of public bodies are open.
• The Administrative Procedures Act (75 O.S. §§ 250 et seq.), which defines what counts as a "final agency order."

The opinion ties these statutes together to conclude that pre-charge settlements with PBMs are: not final orders under the APA, public records under the ORA, and outside the investigation-confidentiality protections of the Pharmacy Choice Act. Two Oklahoma appellate decisions (Ross and Rivero) preclude the parties from contracting around the result.

Citations and references

Statutes:
- 36 O.S. § 6959 (Patient's Right to Pharmacy Choice Act)
- 36 O.S. § 6966 (Settlement and disciplinary action)
- 36 O.S. § 6967 (Confidentiality and final orders)
- 51 O.S. § 24A.5 (Oklahoma Open Records Act, right to inspect)
- 75 O.S. § 250.3 (Administrative Procedures Act, definitions)

Cases:
- Ross v. City of Owasso, 2017 OK CIV APP 4, 389 P.3d 396 (parties cannot contract around the Open Records Act)
- State ex rel. Okla. State Bd. of Med. Licensure & Supervision v. Rivero, 2021 OK 31, 489 P.3d 36 (stipulated protective orders to seal administrative records void as a matter of public policy)
- In re Marriage of Mitchell, 2021 OK CIV APP 17, 491 P.3d 759 (compelling-privacy-interest standard for sealing court records)
- Multiple Inj. Tr. Fund v. Mackey, 2017 OK 75, 406 P.3d 564 (court will not add provisions the Legislature refused to add)

Source

• Landing page: https://oklahoma.gov/oag/opinions/ag-opinions/2023/ag-opinion-2023-1.html
• Original PDF: https://oklahoma.gov/content/dam/ok/en/oag/opinions/ag-opinions/2023/ag_opinion_2023-1.pdf

Original opinion text

GENTNER DRUMMOND
ATTORNEY GENERAL
ATTORNEY GENERAL OPINION
2023-1

The Honorable Glen Mulready
Insurance Commissioner
Oklahoma Insurance Department
400 NE 50th St.
Oklahoma City, OK 73105

March 1, 2023

Dear Commissioner Mulready:

This Office has received your request for an Official Attorney General Opinion in which you ask, in effect, the following questions:

1. When the Insurance Commissioner ("Commissioner") reaches a settlement agreement with a pharmacy benefits manager ("PBM"), prior to the filing of an administrative action, is the settlement agreement reached between the Commissioner and PBM considered a final order pursuant to 36 O.S.2021, § 6967(B)?
2. Is such a settlement agreement subject to production under the Open Records Act, 51 O.S.2021, § 24A.1 et seq., may it be obtained via subpoena or discovery, and is it admissible in evidence in any private civil action?
3. May the Commissioner keep such settlement agreement confidential and privileged pursuant to 36 O.S.2021, § 6967(A)?
4. If the answer to Questions 1 or 2 is yes, may the Commissioner and PBM agree by specific terms in the settlement agreement to keep the agreement confidential?
5. If the answer to Questions 1 or 2 is yes, may the Commissioner and PBM agree by specific terms in the settlement agreement to keep confidential the identity of a party to such a settlement agreement by using an alias or other alternative identifier?

I. BACKGROUND

Beginning in 2014, the State of Oklahoma required licensure of pharmacy benefit managers ("PBMs") if they were to engage in pharmacy benefits management in the State. 59 O.S.2021, § 358, 2014 Okla. Sess. Laws ch. 263, § 2. PBMs generally "facilitate the provision of prescription drug benefits to covered individuals . . . including negotiating pricing and other terms with drug manufacturers and providers." 59 O.S.2021, § 357(6). PBMs also fulfill tasks such as claims processing, payment of claims, formulary development and management, rebate management, patient compliance, substitution programs, and disease management programs. Id. § 357(6)(a–e).

Subsequently in 2019, the Legislature enacted the Patient's Right to Pharmacy Choice Act ("Act"). The purpose of the Act is twofold: (1) "to establish minimum and uniform access to a provider," and (2) institute "standards and prohibitions on restrictions of a patient's right to choose a pharmacy provider." 36 O.S.2021, § 6959, 2019 Okla. Sess. Laws ch. 426, § 2.

In addition to other statutory powers and duties under Title 36, the Act vests the Insurance Commissioner ("Commissioner") with the power and authority to investigate PBMs for compliance with the Act. 36 O.S.2021, § 6965(A). The Act authorizes the Commissioner to receive and process complaints against PBMs and undertake disciplinary action against PBMs when necessary. Id. at §§ 6966(G), 6966.1. Prior to an administrative action being filed, the Commissioner may "approve and sign settlement[s]" with a PBM to resolve the charges against it. 36 O.S.2021, § 6966(C). If the Commissioner and PBM do not reach a settlement, the Commissioner institutes an administrative action through the filing of a statement of charges and notice of hearing against the PBM, and the matter goes to hearing before the Patient's Right to Pharmacy Choice Commission ("Commission"). 36 O.S.2021, § 6966(G–H). All hearings are "held in accordance with, and governed by, Sections 250 through 323 of Title 75 of the Oklahoma Statutes," or the Administrative Procedures Act. Id. § 6966(I).

Through this opinion, the Office addresses whether a settlement agreement is a final order and subject to production under the Act, the Open Records Act ("ORA"), or other applicable state law.

II. DISCUSSION

From the outset, the Office notes that three statutes converge to the conclusions reached in this opinion: first, the Act; second, the ORA; and third, the Administrative Procedures Act ("APA"). For the reasons set forth below, the Office concludes as follows: (1) settlement agreements reached under the Act do not constitute final orders; (2) settlement agreements under the Act and in general are public records and are subject to ORA requests and potentially subject to subpoenas, discovery, and admission as evidence in litigation; (3) neither a public body nor a public official may, without judicial oversight, stipulate to the confidentiality of otherwise public records; (4) Okla. Stat. tit. 36, § 6967(A) is inapplicable as it relates to settlement agreements; and (5) nothing in the plain language of the Act, ORA, or APA allows for a public body or official to keep confidential the identity of a party in a settlement agreement through the use of an alias or alternative identifier.

A. A final settlement agreement between the Commissioner and a PBM is not a final order.

You first ask whether a final settlement agreement between the Commissioner and a PBM constitutes a final order. According to 75 O.S.2021, § 250.3(8), a "final agency order" is an order that "includes findings of fact and conclusions of law pursuant to Section 312 of [the] title, is dispositive of an individual proceeding unless there is a request for rehearing, reopening, or reconsideration pursuant to Section 317 of this title and which is subject to judicial review." (emphasis added). Moreover, like the Act, the APA allows for "informal disposition [which] may be made of any individual proceeding by stipulation, agreed settlement, consent order, or default." 75 O.S.2021, § 309(E).

While 36 O.S.2021, § 6966(C) may authorize the Commissioner to enter into settlement agreements to dispose of a matter prior to hearing, nothing in § 6966 prescribes the form of such agreement. Specifically, there is no requirement for a settlement agreement to contain findings of fact and conclusions of law, which are required for a document to qualify as a final order. Furthermore, the execution of a settlement agreement by the Commissioner and a PBM may obviate the need for judicial review. As a result, the plain reading of 36 O.S.2021, § 6966 distinguishes between settlement agreements, which are entered into before a notice of hearing and statement of charges are filed, and final orders, which follow a hearing before the Commission. Accordingly, settlement agreements are not final orders.

B. A settlement agreement reached between the Commissioner and a PBM is subject to production under the ORA.

You next ask whether a settlement agreement between the Commissioner and a PBM is subject to the ORA, whether it is also subject to a subpoena or discovery, and whether it is admissible in evidence in a private civil action. In short, the answer is yes. Settlement agreements are documents created in the transaction of public business. Accordingly, they are open records under the ORA.

Fundamentally, settlement agreements are public records. The key questions are whether they are open to disclosure under the ORA or through a subpoena or discovery, and whether they may be admissible in a private civil action. Oklahoma's public policy concerning public records, as set forth in the ORA, provides, "[T]he people are vested with the inherent right to know and be fully informed about their government." 51 O.S.2021, § 24A.2. The ORA further protects the public's right to access and review government records "so they may efficiently and intelligently exercise their inherent political power." Id.

A "record" under the ORA refers to "[A]ll documents including, but not limited to . . . other material regardless of physical form or characteristic, created by, received by, under the authority of, or coming into the custody, control or possession of public officials, public bodies or their representatives in connection with the transaction of public business, the expenditure of public funds or the administering of public property." 51 O.S.Supp.2022, § 24A.3(1) (emphasis added). A settlement agreement, such as the one discussed here, is a document "created by" either a public official or public body "in connection with the transaction of public business." Id. And so long as a settlement agreement is a record, the ORA mandates that it "shall be open to any person for inspection, copying, or mechanical reproduction . . . ." 51 O.S.2021, § 24A.5.

Although the ORA's general rule is to mandate access to public records, it does acknowledge and provide for certain instances when a public body may keep specific records confidential as required by law or to protect an important privacy interest. Because no state or federal law mandates that the Commission keep these settlement agreements confidential, and no provision of the ORA would permissively allow a public body or official to keep a settlement agreement confidential, settlement agreements are open records.

C. Subsection A of § 6967 of the Act is not applicable to settlement agreements.

You next ask whether the Commissioner may keep such a settlement agreement confidential and privileged pursuant to 36 O.S.2021, § 6967(A). For § 6967(A) to be applicable to a settlement agreement, such an agreement would have to be related to the Commissioner's evaluation, examination, investigation, or review of a PBM, and would need to be "obtained by, created by or disclosed to" the Commissioner "in the course of" any of those above instances.

A final settlement agreement, by its nature, does not occur during the "course of" an evaluation, examination, investigation, or review. Rather, it follows any evaluation, examination, investigation, or review. As a result, a settlement agreement falls outside the categories of items, documents, or records contemplated by § 6967(A).

D. The Commissioner and a PBM may not, by agreement, keep a settlement agreement confidential.

Reviewing the text of the Act, ORA, and APA, there is no language that authorizes parties to, by agreement, remove otherwise open records from public access. Two Oklahoma appellate cases confirm that, absent legislative authorization, public officials cannot agree to remove public records from public access.

First, in Ross v. City of Owasso, the Court of Civil Appeals decried a city's attempt to keep a public document out of the public domain. The court held: "We reject the argument that any 'non-disclosure' or 'non-disparagement' agreement between the City and the City Manager controls what must be released pursuant to an ORA request. . . . To allow public bodies to 'contract around' the Act would eviscerate the legislative intent."

Second, the Oklahoma Supreme Court in State ex rel. Okla. State Bd. of Med. Licensure and Supervision v. Rivero further affirmed that parties cannot stipulate to the confidentiality of a public document in a public proceeding. 2021 OK 31, 489 P.3d 36. The court declared that a stipulated protective order related to the record of an administrative proceeding was void as a matter of public policy under the ORA.

E. The Commissioner and a PBM may not keep the identity of a party confidential through an alias.

Nothing in the Act, ORA, or APA authorizes the "masking" of a settling party's identity through an alias or alternative identifier. The remedy for protecting confidential information, including identities, is through deletion of exempt material (redaction), not fabricating new names or unique identifiers.

It is, therefore, the official Opinion of the Attorney General that:

1. A settlement agreement reached by the Commissioner and a PBM does not constitute a final order under 36 O.S.2021, § 6967(B).
2. A settlement agreement reached by the Commissioner and a PBM is subject to an ORA request, subpoena, and discovery, and it may be admissible in evidence in any private civil action.
3. Subsection A of § 6967 does not apply to a settlement agreement and may not be used to keep confidential and privileged such agreement.
4. The Commissioner and PBM may not, by agreement, keep a settlement agreement confidential.
5. The Commissioner and PBM may not, by agreement, keep the identity of a party to a final settlement agreement confidential through the use of an alias or alternative identifier.

GENTNER DRUMMOND
ATTORNEY GENERAL OF OKLAHOMA