Delaware DOI Clarifies Step Therapy Exceptions for Insurers

DE Insurance Bulletins

Published March 24th, 2026

Detected March 26th, 2026

Summary

The Delaware Department of Insurance issued Bulletin No. 165 to clarify the interpretation of step therapy exception processes for health insurers. The bulletin specifies that the statutory exclusion for requiring patients to try AB-rated generic equivalents does not apply to biologics and their biosimilars, as they are not branded prescription drugs and lack generic equivalents.

View original document View source feed page

What changed

The Delaware Department of Insurance, through Bulletin No. 165, has clarified the application of step therapy exception processes mandated by 18 Del. C. §§ 3381 and 3591. The bulletin explicitly states that the statutory exclusion allowing insurers to require patients to try an AB-rated generic equivalent before covering a branded prescription drug does not extend to biologics and their biosimilars. This is because biologics are not considered branded prescription drugs and do not have AB-rated generic equivalents, thus the exclusion in subsection (e)(1) is not applicable to them.

This clarification means that insurers and health service corporations must not expand their interpretation of the statutory exception to include biologics and biosimilars. Healthcare providers' clinical judgment remains paramount, and they may prescribe medically necessary drugs notwithstanding step therapy requirements. Insurers are directed to ensure uniform and accurate implementation of these provisions, aligning with the plain language enacted by the General Assembly. Questions regarding this bulletin should be directed to compliance@delaware.gov.

What to do next

Review interpretation of step therapy exception processes to ensure compliance with Bulletin No. 165.
Update internal policies and procedures regarding step therapy for biologics and biosimilars.
Ensure that the statutory exclusion in 18 Del. C. § 3381(e)(1) is not applied to biologics and biosimilars.

Source document (simplified)

TRINIDAD NAVARRO STATE OF DELAWARE COMMISSIONER DEPARTMENT OF INSURANCE

DOMESTIC AND FOREIGN INSURERS BULLETIN NO. 165 TO: INSURERS, HEALTH SERVICE CORPORATIONS, AND MANAGED CARE ORGANIZATIONS THAT DELIVER OR ISSUE FOR DELIVERY IN THIS STATE INDIVIDUAL AND GROUP INSURANCE POLICIES OR PLANS SUBJECT TO REGULATION UNDER TITLE 18 OF THE DELAWARE CODE RE: STEP THERAPY EXCEPTIONS DATED: March 24th, 2026

The Department issues this Bulletin to reinforce its position regarding the step therapy exceptions processes required by 18 Del. C. §§ 3381 and 3591 and to address questions that have arisen regarding the scope of the statutory exclusions in subsection (e). The Department has reviewed carrier practices and determined that clarification is necessary to ensure uniform and accurate implementation of these provisions. Background HS 1 for HB 105, enacted by the General Assembly and effective March 18, 2020, added new Sections 3381 and 3591 to Title 18 of the Delaware Code, establishing a standardized, patient-centered framework governing the use of step therapy protocols in Delaware. These statutes require carriers to maintain a clear and accessible process for requesting exceptions to step therapy requirements and to identify specific clinical circumstances in which an exception must be granted. The provisions also ensure that a health-care provider’s clinical judgment remains central to treatment decisions by preserving the ability to request an override when step therapy is not medically appropriate for a particular patient. Both sections include a narrow exclusion in subsection (e) permitting carriers to require a patient to try an AB-rated generic equivalent before covering the equivalent branded prescription drug, and reaffirming that providers may prescribe a medically necessary drug notwithstanding step therapy requirements. The exclusion under subsection (e) reads as follows:

This section shall not be construed to prevent any of the following: (1) An insurer, health plan, or utilization review entity from requiring a patient to try an AB-rated generic equivalent prior to providing coverage for the equivalent branded prescription drug.

♦INSURANCE.DELAWARE.GOV♦ 1351 W. NORTH ST., SUITE 101, DOVER, DELAWARE 19904 (302)4-7300 DOVER♦ (302) 259-7554 GEORGETOWN♦ (302) 577-5280 WILMINGTON

(2) A health-care provider from prescribing a prescription drug that is determined to be medically necessary. It has come to the Department’s attention that carriers may have expanded the interpretation of the statutory exception in subsection (e) beyond the plain language enacted by the General Assembly, applying it to biologics and their biosimilars. Biologics are not “branded prescription drugs,” nor do they have “AB-rated generic equivalents.” Therefore, the language in (e)(1) does not apply to biologics. While the Department understands the similarities between brands/generics vs. biologics/biosimilars, the statutory language passed by the General Assembly is explicit in the scope of its exception. Therefore, it is the Department’s position that it is inappropriate for a carrier to expand this language to include biologics and their biosimilars when interpreting or implementing Sections 3381 and 3591. Questions about this Bulletin should be emailed to compliance@delaware.gov. This Bulletin shall be effective immediately and shall remain in effect unless withdrawn or superseded by subsequent law, regulation or bulletin. ______________________________________ Trinidad Navarro Delaware Insurance Commissioner

Note: This Bulletin is intended solely for informational purposes. It is not intended to set forth legal rights, duties, or privileges, nor is it intended to provide legal advice. Readers should consult applicable statutes and rules and contact the Delaware

. Department of Insurance if additional information is needed Page | 2