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SENATE BILL NO. 124
IN THE LEGISLATURE OF THE STATE OF ALASKA
THIRTY-THIRD LEGISLATURE - FIRST SESSION
BY SENATOR WILSON BY REQUEST
Introduced: 4/5/23
Referred:
A BILL
FOR AN ACT ENTITLED
"An Act relating to health care insurers; relating to pharmacy benefits managers; 1
relating to prescription drug defined cost sharing; and providing for an effective date." 2
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 3
* Section 1. AS 21.27.955 is amended to read: 4
Sec. 21.27.955. Definitions. In AS 21.27.901 - 21.27.960 [AS 21.27.901 -
5
21.27.955], 6
(1) "audit" means an official examination and verification of accounts 7
and records; 8
(2) "claim" means a request from a pharmacy or pharmacist to be 9
reimbursed for the cost of filling or refilling a prescription for a drug or for providing 10
a medical supply or device; 11
(3) "defined cost sharing" has the meaning given in AS 21.42.599; 12
(4) [(3)] "extrapolation" means the practice of inferring a frequency or 13
dollar amount of overpayments, underpayments, invalid claims, or other errors on any 14 33-LS0304\U
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portion of claims submitted, based on the frequency or dollar amount of 1
overpayments, underpayments, invalid claims, or other errors actually measured in a 2
sample of claims; 3
(5) "health care insurer" means 4
(A) an insurer regulated by this title that offers health 5
insurance coverage as defined in 42 U.S.C. 300gg-91; or 6
(B) a state or local governmental plan; 7
(6) [(4)] "list" means the list of multi-source generic drugs for which a 8
predetermined reimbursement amount has been established such as a maximum 9
allowable cost or maximum allowable cost list or any other list of prices used by a 10
pharmacy benefits manager; 11
(7) [(5)] "multi-source generic drug" means any covered outpatient 12
prescription drug that the United States Food and Drug Administration has determined 13
is pharmaceutically equivalent or bioequivalent to the originator or name brand drug 14
and for which there are at least two drug products that are rated as therapeutically 15
equivalent under the United States Food and Drug Administration's most recent 16
publication of "Approved Drug Products with Therapeutic Equivalence Evaluations"; 17
(8) [(6)] "network pharmacy" means a pharmacy that provides covered 18
health care services or supplies to an insured or a member under a contract with a 19
network plan to act as a participating provider; 20
(9) [(7)] "pharmacy" has the meaning given in AS 08.80.480; 21
(10) [(8)] "pharmacy acquisition cost" means the amount that a 22
pharmaceutical wholesaler or distributor charges for a pharmaceutical product as listed 23
on the pharmacy's invoice; 24
(11) [(9)] "pharmacy benefits manager" means a person that 25
(A) contracts with a pharmacy on behalf of a health care [AN] 26
insurer to process claims or pay pharmacies for prescription drugs or medical 27
devices and supplies or provide network management for pharmacies; or 28
(B) contracts with or is employed by a health care insurer, 29
either directly or through an intermediary, to manage a prescription drug 30
benefit provided by the health care insurer, including the processing and 31 33-LS0304\U
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payment of claims for prescription drugs, performance of prescription 1
drug utilization review, processing of drug prior authorization requests, 2
adjudication of appeals or grievances related to the prescription drug 3
benefit, contracting with network pharmacies, or otherwise controlling the 4
cost of prescription drugs; 5
(12) "rebate" has the meaning given in AS 21.42.599; 6
(13) [(10)] "recoupment" means the amount that a pharmacy must 7
remit to a pharmacy benefits manager when the pharmacy benefits manager has 8
determined that an overpayment to the pharmacy has occurred. 9
* Sec. 2. AS 21.27 is amended by adding a new section to article 9 to read: 10
Sec. 21.27.960. Defined cost sharing and prescription drugs. (a) A 11
pharmacy benefits manager and agents of a pharmacy benefits manager shall ensure 12
that a covered person's defined cost sharing for a prescription drug is calculated at the 13
point of sale based on a price that is reduced by an amount equal to at least 85 percent 14
of all rebates received, or that will be received, in connection with the dispensing or 15
administration of the prescription drug. The pharmacy benefits manager or the agent 16
of the pharmacy benefits manager shall ensure that a good faith estimate of the 17
covered person's reduction in defined cost sharing required under this subsection is 18
passed through to the covered person at the point of sale. 19
(b) The director or a pharmacy benefits manager may not impose liability, a 20
penalty, or disciplinary action on a pharmacy or pharmacist for the pharmacy's or 21
pharmacist's failure to reduce a covered person's defined cost sharing under (a) of this 22
section if the covered person's health care insurer fails to provide the pharmacy or 23
pharmacist with the information necessary to calculate the reduction. The health care 24
insurer may not impose a monetary penalty on, or withhold a payment to, a pharmacy 25
or pharmacist that engaged in good faith efforts to comply with (a) of this section. 26
(c) Nothing in this section prevents a health care insurer or an agent of a 27
health care insurer from reducing a covered person's defined cost sharing by an 28
amount greater than the amount calculated under (a) of this section. 29
(d) A pharmacy benefits manager may not be required to disclose the amount 30
of rebates a health care insurer or pharmacy benefits manager receives on a product-31 33-LS0304\U
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specific, manufacturer-specific, or pharmacy-specific basis, except as required to 1
comply with this section. Information and records relating to the amount of rebates a 2
health insurer or pharmacy benefits manager receives on a product-specific, 3
manufacturer-specific, or pharmacy-specific basis are confidential for the purposes of 4
AS 21.06.060. 5
(e) If a provision in this section conflicts with federal law, the provision does 6
not apply to the extent of the conflict. 7
(f) The director may audit the books and records of a pharmacy benefits 8
manager registered under this chapter to determine whether the pharmacy benefits 9
manager has complied with the requirements of this section. 10
* Sec. 3. AS 21.42 is amended by adding a new section to read: 11
Sec. 21.42.435. Defined cost sharing and prescription drugs. (a) A health 12
care insurer and agents of a health care insurer shall ensure that a covered person's 13
defined cost sharing for a prescription drug is calculated at the point of sale based on a 14
price that is reduced by an amount equal to at least 85 percent of all rebates received, 15
or that will be received, in connection with the dispensing or administration of the 16
prescription drug. The health care insurer or the agent of the health care insurer shall 17
ensure that a good faith estimate of the covered person's reduction in defined cost 18
sharing required under this subsection is passed through to the covered person at the 19
point of sale. 20
(b) The director or a health care insurer may not impose liability, a penalty, or 21
disciplinary action on a pharmacy or pharmacist for the pharmacy's or pharmacist's 22
failure to reduce a covered person's defined cost sharing under (a) of this section if the 23
covered person's health care insurer fails to provide the pharmacy or pharmacist with 24
the information necessary to calculate the reduction. The health care insurer may not 25
impose a monetary penalty on, or withhold a payment to, a pharmacy or pharmacist 26
that engaged in good faith efforts to comply with (a) of this section. 27
(c) Nothing in this section prevents a health care insurer or an agent of a 28
health care insurer from reducing a covered person's defined cost sharing by an 29
amount greater than the amount calculated under (a) of this section. 30
(d) A health care insurer or an agent of a health care insurer may not be 31 33-LS0304\U
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required to disclose the amount of rebates a health care insurer or pharmacy benefits 1
manager receives on a product-specific, manufacturer-specific, or pharmacy-specific 2
basis, except as required to comply with this section. Information and records relating 3
to the amount of rebates a health insurer or pharmacy benefits manager receives on a 4
product-specific, manufacturer-specific, or pharmacy-specific basis are confidential 5
for the purposes of AS 21.06.060. 6
(e) If a provision in this section conflicts with federal law, the provision does 7
not apply to the extent of the conflict. 8
(f) The director may audit the books and records of a health care insurer to 9
determine whether the health care insurer has complied with the requirements of this 10
section. 11
(g) In this section, "health care insurer" has the meaning given in 12
AS 21.27.955. 13
* Sec. 4. AS 21.42.599 is amended by adding new paragraphs to read: 14
(9) "defined cost sharing" means a deductible payment, coinsurance, or 15
similar amount owed by a covered person under the terms of the covered person's 16
health care insurance plan; 17
(10) "negotiated price concession" includes a base price concession or 18
reasonable estimate of any price protection rebate and performance-based price 19
concession that may accrue directly or indirectly to a health care insurer during the 20
coverage year from a manufacturer, dispensing pharmacy, or other party in connection 21
with the dispensing or administration of a prescription drug; 22
(11) "price protection rebate" means a negotiated price concession that 23
accrues directly or indirectly to the health care insurer, or another person on behalf of 24
the health care insurer, in the event of an increase in the wholesale acquisition cost of 25
a drug above a threshold specified in a contract to which the health care insurer, or 26
another person on behalf of the health care insurer, is a party; 27
(12) "rebate" means a 28
(A) negotiated price concession, whether or not the negotiated 29
price concession is described as a rebate or accrues directly or indirectly to a 30
health care insurer during the coverage year from a manufacturer, dispensing 31 33-LS0304\U
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pharmacy, or other party in connection with the dispensing or administration of 1
a prescription drug; or 2
(B) reasonable estimate of any negotiated price concessions, 3
fees, and other administrative costs that are passed through, or are reasonably 4
anticipated to be passed through, to the health care insurer and serve to reduce 5
the health care insurer's prescription drug liabilities. 6
* Sec. 5. The uncodified law of the State of Alaska is amended by adding a new section to 7
read: 8
APPLICABILITY. This Act applies to an insurance policy or contract issued, 9
delivered, or renewed on or after the effective date of this Act. 10
* Sec. 6. This Act takes effect January 1, 2025. 11