HB238INTRODUCED
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HB238
8JMSH22-1
By Representative Rigsby
RFD: Insurance
First Read: 27-Feb-24
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5 8JMSH22-1 02/21/2024 JC (L)tgw 2023-3818
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First Read: 27-Feb-24
SYNOPSIS:
Pharmacy benefits managers are third-party
administrators of prescription drug benefits in a
health insurance plan. They are primarily responsible
for processing and paying prescription drug claims.
They typically negotiate price discounts and rebates
from manufacturers and determine how pharmacies get
reimbursed for dispensing prescriptions. Under state
law, pharmacy benefits managers are licensed and
regulated by the Department of Insurance.
This bill would prohibit pharmacy benefits
managers from reimbursing a pharmacy less than the
actual acquisition cost paid by the pharmacy or from
contracting with a health insurer to receive payment
amounts for prescription drug benefits that are
different from the amounts the pharmacy benefits
managers pay pharmacies. This bill would also prohibit
pharmacy benefits manufacturers from starting an
investigation against a pharmacy for fraud, waste, or
abuse without reasonable suspicion.
This bill would further specify the powers that
the Commissioner of Insurance may use to investigate
pharmacy benefits managers and would make pharmacy
benefits managers subject to the Pharmacy Audit
Integrity Act in cases involving fraud, waste, or
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Integrity Act in cases involving fraud, waste, or
abuse.
This bill would require pharmacy benefits
managers to pass on 100 percent of the rebates that
they receive from pharmaceutical manufacturers and
would provide reporting requirements on rebates
received by pharmacy benefits managers to both the
commissioner and health insurers.
This bill would also prohibit pharmacy benefits
managers from penalizing health insurers when they
transfer claims processing services and related
functions to a different pharmacy benefits manager.
A BILL
TO BE ENTITLED
AN ACT
Relating to pharmacy benefits managers; to amend
Sections 27-45A-3, 27-45A-4, 27-45A-5, 27-45A-6, 27-45A-7,
27-45A-8, 27-45A-9, and 27-45A-10, Code of Alabama 1975; to
further provide for regulation of pharmacy benefits managers
in relation to third-party payors and pharmacies; to prohibit
pharmacy benefits managers from paying pharmacies less than
the actual acquisition cost for prescription drugs and from
paying to pharmacies less than the amounts reimbursed by
third-party payors; to permit pharmacists to discuss drug
prices with covered individuals; to prohibit pharmacy benefits
managers from charging pharmacies certain fees or from
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managers from charging pharmacies certain fees or from
initiating a fraud, waste, or abuse investigation without
reasonable suspicion; to require pharmacy benefits managers to
report rebate amounts received to the Commissioner of
Insurance and to third-party payors; to provide for
examination of pharmacy benefits managers by the Commissioner
of Insurance; to add Section 27-45A-13 to the Code of Alabama
1975, to require pharmacy benefits managers to pass on 100
percent of the rebates received from pharmaceutical
manufacturers to third-party payors and to prohibit pharmacy
benefits managers from penalizing third-party payors for
switching pharmacy benefits managers; and to amend Section
34-23-187, Code of Alabama 1975, to provide that an
investigation into fraud, waste, or abuse by a pharmacy
benefits manager falls under the Pharmacy Audit Integrity Act.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1. Sections 27-45A-3, 27-45A-4, 27-45A-5,
27-45A-6, 27-45A-7, 27-45A-8, 27-45A-9, and 27-45A-10, Code of
Alabama 1975, are amended to read as follows:
"§27-45A-3
For purposes of this chapter, the following words shall
have the following meanings:
(1) ACTUAL ACQUISITION COST. The Average Acquisition
Cost (AAC) of a drug for the State of Alabama, as published by
the Alabama Medicaid Agency. If no AAC is available, the term
means the wholesale acquisition cost (WAC + 0%).
(2) CLAIMS PROCESSING SERVICES. The administrative
services performed in connection with the processing and
adjudicating of claims relating to pharmacist services that
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adjudicating of claims relating to pharmacist services that
include any of the following:
a. Receiving payments for pharmacist services.
b. Making payments to pharmacists or pharmacies for
pharmacist services.
c. Both paragraphs a. and b.
(2)(3) COVERED INDIVIDUAL. A member, policyholder,
subscriber, enrollee, beneficiary, dependent, or other
individual participating in a health benefit plan.
(3)(4) HEALTH BENEFIT PLAN. A policy, contract,
certificate, or agreement entered into, offered, or issued by
a payor or health insurer to provide, deliver, arrange for,
pay for, or reimburse any of the costs of physical, mental, or
behavioral health care services , including pharmacist
services.
(4)(5) HEALTH INSURER. An entity subject to the
insurance laws of this state and rules of the department, or
subject to the jurisdiction of the department, that contracts
or offers to contract to provide, deliver, arrange for, pay
for, or reimburse any of the costs of health care services,
including, but not limited to, a sickness and accident
insurance company, a health maintenance organization operating
pursuant to Chapter 21A, a nonprofit hospital or health
service corporation, a health care service plan organized
pursuant to Article 6, Chapter 20 of Title 10A, or any other
entity providing a plan of health insurance, health benefits,
or health services.
(6) IN-NETWORK or NETWORK. A network of pharmacists or
pharmacies that are paid for pharmacist services pursuant to
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pharmacies that are paid for pharmacist services pursuant to
an agreement with a health benefit plan or a pharmacy benefits
manager.
(5)(7) OTHER PRESCRIPTION DRUG OR DEVICE SERVICES.
Services, other than claims processing services, provided
directly or indirectly, whether in connection with or separate
from claims processing services, including, but not limited
to, any of the following:
a. Negotiating rebates , discounts, or other financial
incentives and arrangements with drug companies.
b. Disbursing or distributing rebates.
c. Managing or participating in incentive programs or
arrangements for pharmacist services.
d. Negotiating or entering into contractual
arrangements with pharmacists or pharmacies, or both.
e. Developing formularies.
f. Designing prescription benefit programs.
g. Advertising or promoting services.
(8) PAYOR. Any entity other than a health insurer
involved in the financing or payment of pharmacist services.
(9) PBM AFFILIATE. An entity, including, but not
limited to, a pharmacy, health insurer, or group purchasing
organization that directly or indirectly, through one or more
intermediaries, has one of the following affiliations:
a. Owns, controls, or has an investment interest in a
pharmacy benefits manager.
b. Is owned, controlled by, or has an investment
interest holder who is a pharmacy benefits manager.
c. Is under common ownership or corporate control with
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c. Is under common ownership or corporate control with
a pharmacy benefits manager.
(6)(10) PHARMACIST. As defined in Section 34-23-1.
(7)(11) PHARMACIST SERVICES. Products, goods, and
services, or any combination of products, goods, and services,
provided as a part of the practice of pharmacy.
(8)(12) PHARMACY. As defined in Section 34-23-1.
(9)(13) PHARMACY BENEFITS MANAGER. a. A person,
including a wholly or partially owned or controlled subsidiary
of a pharmacy benefits manager, that provides claims
processing services or other prescription drug or device
services, or both, to covered individuals who are employed in
or are residents of this state, for health benefit plans. The
term includes any person that administers a prescription
discount program directly or on behalf of a pharmacy benefits
manager or health benefit plan for drugs to covered
individuals which are not reimbursed by a pharmacy benefits
manager or are not covered by a health benefit plan.
b. Pharmacy benefits manager does not include any of
the following:
1. A healthcare health care facility licensed in this
state.
2. A healthcare health care professional licensed in
this state.
3. A consultant who only provides advice as to the
selection or performance of a pharmacy benefits manager.
(10) PBM AFFILIATE. A pharmacy or pharmacist that,
directly or indirectly, through one or more intermediaries, is
owned or controlled by, or is under common control by, a
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owned or controlled by, or is under common control by, a
pharmacy benefits manager.
(14) PRESCRIPTION DRUG FILE. Any electronic and
computer data files maintained by a pharmacy benefits manager
in connection with administering prescription drug benefits on
behalf of a health benefit plan, including, but not limited
to, claims history files, drug utilization review files, prior
authorization files, EDI 834 eligibility files, accumulator
files, step therapy files, and other records pertaining to
covered individuals.
(11)(15) PRESCRIPTION DRUGS. Includes, but is not
limited to, certain infusion, compounded, and long-term care,
and specialty prescription drugs . The term does not include
specialty drugs.
(16) REBATE. Any payments or price concessions that
accrue to a pharmacy benefits manager or its health benefit
plan client, directly or indirectly, including through its PBM
affiliate or its subsidiary, third party, or intermediary,
including an off-shore group purchasing organization, from a
pharmaceutical manufacturer or its affiliate, subsidiary,
third party, or intermediary. The term includes, but is not
limited to, payments, discounts, administration fees, credits,
incentives, or penalties associated, directly or indirectly,
in any way with claims administered on behalf of a health
benefit plan.
(12)(17) SPECIALTY DRUGS. Prescription medications that
require special handling, administration, or monitoring and
are used for the treatment of patients with serious health
conditions requiring complex therapies, and that are eligible
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conditions requiring complex therapies, and that are eligible
for specialty tier placement by the Centers for Medicare and
Medicaid Services pursuant to 42 C.F.R. § 423.560.
(18) SPREAD PRICING. A prescription drug pricing model
used by a pharmacy benefits manager in which the pharmacy
benefits manager charges a health benefit plan a contracted
price for prescription drugs that differs from the amount the
pharmacy benefits manager pays the pharmacy for the
prescription drug, including any post-sale or
post-adjudication fees, discounts, or adjustments where not
prohibited by law. "
"§27-45A-4
(a) A person may not establish or operate as a pharmacy
benefits manager in this state without first obtaining a
license from the commissioner.
(b) Effective through December 31, 2021, to initially
obtain a license or renew a license, a pharmacy benefits
manager shall submit all of the following:
(1) A nonrefundable fee not to exceed five hundred
dollars ($500).
(2) A copy of the licensee's corporate charter,
articles of incorporation, or other charter document.
(3) A completed licensure form adopted by the
commissioner containing:
a. The name and address of the licensee.
b. The name, address, and official position of an
employee who will serve as the primary contact for the
Department of Insurance.
c. Any additional contact information deemed
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c. Any additional contact information deemed
appropriate by the commissioner or reasonably necessary to
verify the information contained in the application.
(c) Not later than January 1, 2022, the commissioner
shall adopt rules for licensure of pharmacy benefits managers
to operate in this state. The rules shall establish all of the
following:
(1) The licensing procedure and application form.
(2) Requirements for licensure.
(3) Reporting requirements.
(4) A fee schedule for a nonrefundable application fee
and a nonrefundable license renewal fee, set to allow the
regulation and oversight activities of the department to be
self-supporting.
(d) On and after January 1, 2022, a person applying for
a pharmacy benefits manager license shall submit an
application for licensure in the form and manner prescribed by
the commissioner by rule, along with the application fee.
(e) The commissioner may refuse to issue or renew a
license if the commissioner determines that the applicant has
been found to have violated this chapter , Article 8 of Chapter
23 of Title 34, or the insurance laws of this state or any
other jurisdiction, or has had an insurance or other
certificate of authority or license denied or revoked for
cause by any jurisdiction.
(f) Unless denied licensure pursuant to subsection (e),
a person who meets the requirements of this chapter and rules
adopted by the commissioner shall be issued a pharmacy
benefits manager license. The license may be in paper or
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benefits manager license. The license may be in paper or
electronic form and shall clearly indicate the expiration date
of the license. Licenses are nontransferable. Notwithstanding
any provision of law to the contrary, the application and
license shall be public records.
(g) The license shall be initially renewed in
accordance with a schedule prescribed by the commissioner and
shall thereafter be subject to renewal on an annual basis
along with the nonrefundable license renewal fee.
(h) A licensee shall inform the commissioner by any
means acceptable to the commissioner of any material change in
the information required by this section or rules adopted
pursuant to this section within 30 days of the change. Failure
to timely inform the commissioner of a change shall result in
a penalty against the licensee in the amount of fifty dollars
($50).
(i) The commissioner may suspend or revoke a license or
may impose civil penalties for a violation of this chapter ,
Article 8 of Chapter 23 of Title 34, or the insurance laws of
this state or any other jurisdiction, as determined by the
commissioner in accordance with rules adopted by the
commissioner, provided a pharmacy benefits manager shall have
the same rights as insurers to request a hearing in accordance
with Sections 27-2-28, et seq. , and to appeal as provided in
Section 27-2-32.
(j) Unless surrendered, suspended, or revoked by the
commissioner, a license issued under this section shall remain
valid as long as the pharmacy benefits manager continues to do
business in this state and remains in compliance with this
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business in this state and remains in compliance with this
chapter and applicable rules, including the payment of an
annual license renewal fee as set forth in subsection (g).
(k) All documents, materials, or other information, and
copies thereof, in the possession or control of the department
that are obtained by or disclosed to the commissioner or any
other person in the course of an application, examination, or
investigation made pursuant to this chapter shall be
confidential by law and privileged, shall not be subject to
any open records, freedom of information, sunshine, or other
public record disclosure laws, and shall not be subject to
subpoena or discovery. This subdivision subsection only
applies to disclosure of confidential documents by the
department and does not create any privilege in favor of any
other party.
(l)(1) Fees collected pursuant to this section shall be
deposited in the State Treasury to the credit of the Insurance
Department Fund.
(2) Civil penalties collected pursuant to this chapter
shall be deposited in the State Treasury to the credit of the
state State General Fund.
(m) Commencing January 1, 2022, a pharmacy benefits
manager licensed by the commissioner prior to January 1, 2022,
shall submit an application for a new license in accordance
with subsection (d). The pharmacy benefits manager's previous
license shall expire on the date the commissioner issues a new
license or April 1, 2022, whichever occurs earlier."
"§27-45A-5
(a) The commissioner may adopt rules necessary to
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(a) The commissioner may adopt rules necessary to
implement this chapter and Article 8 of Chapter 23 of Title
34.
(b) The powers and duties set forth in this chapter
shall be in addition to all other authority of the
commissioner.
(c) The commissioner shall enforce compliance with the
requirements of this chapter and rules adopted thereunder.
(d) The commissioner shall require the pharmacy
benefits manager to submit a report for each health insurer,
on a periodic basis, which may include, but not be limited to,
the following information:
(1) The aggregate amount of rebates received by the
pharmacy benefits manager.
(2) The aggregate amount of rebates distributed to the
health insurer.
(3) The aggregate amount of rebates the health insurer
passed on to the insurer's covered individuals which reduced
applicable cost-sharing amounts at the point-of-sale,
including deductibles, copayments, and coinsurance.
(4) The aggregate amount paid to the pharmacy benefits
manager for pharmacist services in categories for pharmacy,
drug product, medical devices, and other products, goods, or
services.
(5) The aggregate amount paid to a pharmacy for
pharmacist services in categories for drug product, medical
devices, and other products, goods, or services.
(d)(e)(1) The commissioner may examine or audit any
books and records of a pharmacy benefits manager providing
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books and records of a pharmacy benefits manager providing
claims processing services or other prescription drug or
device services for a health benefit plan as may be deemed
relevant and necessary by the commissioner to determine
compliance with this chapter.
(2) Examinations conducted by the commissioner shall be
pursuant to the same examination authority of the commissioner
relative to insurers as provided in Chapter 2, including, but
not limited to, the confidentiality of documents and
information submitted as provided in Section 27-2-24;
examination expenses shall be processed in accordance with
Section 27-2-25; and pharmacy benefits managers shall have the
same rights as insurers to request a hearing in accordance
with Sections 27-2-28 , et seq., and to appeal as provided in
Section 27-2-32.
(3) Any examination or audit by the commissioner may
include production by the pharmacy benefits manager of the
following:
a. Contracts with any pharmaceutical manufacturers,
health insurers, payors, and pharmacies.
b. Data on plan utilization, plan pricing, pharmacy
utilization, and pharmacy pricing.
c. Documents created pursuant to network development,
including contract negotiations, and decisions on network
membership.
(e)(f) The commissioner's examination expenses shall be
collected from pharmacy benefits managers in the same manner
as those collected from insurers."
"§27-45A-6
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"§27-45A-6
(a) Nothing in this chapter is intended or shall be
construed to do any either of the following:
(1) Be in conflict with existing relevant federal law.
(2) Apply to any specialty drug.
(3)(2) Impact the ability of a hospital to mandate its
employees' use of a hospital-owned pharmacy.
(b) The following provisions shall not apply to the
administration by a person of any term, including prescription
drug benefits, of a self-funded health benefit plan that is
governed by the federal Employee Retirement Income Security
Act of 1974, 29 U.S.C. §1001 et. seq.:
(1) Subdivisions (1) and (5) of Section 27-45A-8.
(2) Subdivisions (2), (3), (6), and (7) of Section
27-45A-10."
"§27-45A-7
Reserved.(a) A pharmacy benefits manager shall do all
of the following:
(1) Designate the pharmacy benefits manager's point of
contact for any in-network pharmacist and pharmacy.
(2) Respond to a request from an in-network pharmacist
or pharmacy within two business days.
(b) A pharmacy benefits manager may establish a process
whereby a pharmacist or pharmacy may appeal a reimbursement
decision that fails to pay the actual acquisition cost for any
prescription drug or device, provided that nothing herein
shall be construed to prohibit a pharmacy from filing a
complaint with the commissioner if the pharmacy is not
reimbursed in accordance with Section 27-45A-10. "
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reimbursed in accordance with Section 27-45A-10. "
"§27-45A-8
With respect to a covered individual, Aa pharmacy
benefits manager , directly or through an affiliate or a
contracted third party, may not do any of the following:
(1) Require a covered individual, as a condition of
payment or reimbursement, to purchase pharmacist services,
including, but not limited to, prescription drugs, exclusively
through a mail-order pharmacy or pharmacy benefits manager
affiliate.
(2) Prohibit or limit any covered individual from
selecting an in-network pharmacy or pharmacist of his or her
choice who meets and agrees to the terms and conditions,
including reimbursements, in the pharmacy benefits manager's
contract.
(3) Impose a monetary advantage or penalty under a
health benefit plan that would affect a covered individual's
choice of pharmacy among those pharmacies that have chosen to
contract with the pharmacy benefits manager under the same
terms and conditions, including reimbursements. For purposes
of this subdivision, "monetary advantage or penalty" includes,
but is not limited to, a higher copayment, a waiver of a
copayment, a reduction in reimbursement services, a
requirement or limit on the number of days of a drug supply
for which reimbursement will be allowed, or a promotion of one
participating pharmacy over another by these methods.
(4)a. Use a covered individual's pharmacy services data
collected pursuant to the provision of claims processing
services for the purpose of soliciting, marketing, or
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services for the purpose of soliciting, marketing, or
referring the covered individual to a mail-order pharmacy or
PBM affiliate.
b. This subdivision shall not limit a health benefit
plan's use of pharmacy services data for the purpose of
administering the health benefit plan.
c. This subdivision shall not prohibit a pharmacy
benefits manager from notifying a covered individual that a
less costly option for a specific prescription drug is
available through a mail-order pharmacy or PBM affiliate,
provided the notification shall state that switching to the
less costly option is not mandatory. The commissioner, by
rule, may determine the language of the notification
authorized under this paragraph made by a pharmacy benefits
manager to a covered individual.
(5) Require a covered individual to make a payment for
a prescription drug at the point of sale in an amount that
exceeds the lessorlesser of the following:
a. The contracted cost share amount.
b. An amount an individual would pay for a prescription
if that individual were paying without insurance.
(6) Charge a covered individual a copayment or a
cost-sharing amount that is greater than the amount paid to
the pharmacy that dispenses the prescription drug. "
"§27-45A-9
(a) For purposes of this section, client "client" means
a health insurer, payor, or health benefit plan.
(b) If requested by a client under subsection (d), a
pharmacy benefits manager shall prepare an annual report by
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pharmacy benefits manager shall prepare an annual report by
June 1 which discloses all of the following with respect to
that client:
(1) Thethe aggregate amount of all rebates that the
pharmacy benefits manager received from pharmaceutical
manufacturers on behalf of the client.
(2) The aggregate amount of the rebates the pharmacy
benefits manager received from pharmaceutical manufacturers
that did not pass through to the client.
(3) If a pharmacy benefits manager or any consultant
providing pharmacy benefits management services engages in
spread pricing, the aggregated amount of the difference
between the amount paid by the client for prescription drugs
and the actual amount paid to the pharmacy or pharmacist for
pharmacist services. For purposes of this subdivision, "spread
pricing" means the model of prescription drug reimbursement in
which a pharmacy benefits manager charges a client a
contracted price for prescription drugs, and the contract
price for the prescription drugs differs from the amount the
pharmacy benefits manager, directly or indirectly, pays the
pharmacy or pharmacist for pharmacist services.
(c) Confidentiality of a report submitted under this
section shall be governed by contract between the pharmacy
benefits manager and the client.
(d) A pharmacy benefits manager shall annually notify
all its clients in a timely manner that a report described in
subsection (b) will be made available to the client by the
pharmacy benefits manager if requested by the client."
"§27-45A-10
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"§27-45A-10
(a) With respect to a pharmacist or pharmacy, Aa
pharmacy benefits manager , directly or through an affiliate or
a contracted third party, may not do any of the following:
(1) Reimburse an in-network pharmacy or pharmacist in
the state an amount less than the amount that the pharmacy
benefits manager reimburses a similarly situated PBM affiliate
for providing the same pharmacist services to covered
individuals in the same health benefit plan.
(2) Reimburse an in-network pharmacy for a prescription
drug in an amount that is less than or exceeds the actual
acquisition cost to the pharmacy for the prescription drug
plus a professional dispensing fee that is equal to the
professional dispensing fee paid by the state under Title XIX
of the Social Security Act.
(3) Practice spread pricing in this state.
(2)(4) Deny a pharmacy or pharmacist the right to
participate as a contractnetwork provider if the pharmacy or
pharmacist meets and agrees to the terms and conditions,
including reimbursements, in the pharmacy benefits manager's
contract.
(3)(5) Impose credentialing standards on a pharmacist
or pharmacy beyond or more onerous than the licensing
standards set by the Alabama State Board of Pharmacy or charge
a pharmacy a fee in connection with network enrollment,
provided this subdivision shall not prohibit a pharmacy
benefits manager from setting minimum requirements for
participating in a pharmacy network.
(4)(6) Prohibit a pharmacist or pharmacy from providing
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(4)(6) Prohibit a pharmacist or pharmacy from providing
a covered individual specific information on the amount of the
covered individual's cost share for the covered individual's
prescription drug , the acquisition cost and reimbursement
amount for the prescription drug, and the clinical efficacy of
a more affordable alternative drug or therapy if one is
available, or penalize a pharmacist or pharmacy for disclosing
this information to a covered individual as deemed necessary
in the professional judgment of the pharmacist or for selling
to a covered individual a more affordable alternative if one
is available in the completion of a business transaction .
(5)(7) Prohibit a pharmacist or pharmacy from offering
and providing delivery services to a covered individual as an
ancillary service of the pharmacy, provided all of the
following requirements are met:
a. The pharmacist or pharmacy can demonstrate quality,
stability, and safety standards during delivery.
b. The pharmacist or pharmacy does not charge any
delivery or service fee to a pharmacy benefits manager or
health insurer.
c. The pharmacist or pharmacy alerts the covered
individual that he or she will be responsible for any delivery
service fee associated with the delivery service, and that the
pharmacy benefits manager or health insurer will not reimburse
the delivery service fee.
(6)(8) Charge or hold a pharmacist or pharmacy
responsible for a fee or penalty relating to an audit
conducted pursuant to The Pharmacy Audit Integrity Act,
Article 8 of Chapter 23 of Title 34, provided this prohibition
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Article 8 of Chapter 23 of Title 34, provided this prohibition
does not restrict recoupments made in accordance with the
Pharmacy Audit Integrity Act that article.
(7)(9) Charge a pharmacist or pharmacy a point-of-sale
or retroactive fee or otherwise recoup funds from a pharmacy
in connection with claims for which the pharmacy has already
been paid, unless the recoupment is made pursuant to an audit
conducted in accordance with the Pharmacy Audit Integrity
ActArticle 8 of Chapter 23 of Title 34 .
(10) Charge a pharmacy a fee in regard to enrollment,
credentialing or re-credentialing, change of ownership,
submission of claims, adjudication of claims, or otherwise if
not in conjunction with an audit conducted pursuant to Article
8 of Chapter 23 of Title 34.
(11) Initiate a fraud, waste, or abuse investigation
without first notifying the pharmacist or pharmacy and
receiving approval from the commissioner on the basis of
information that supports an articulable suspicion of fraud,
waste, or abuse by the pharmacist or pharmacy to be
investigated.
(12) Impose additional terms on a pharmacy unless the
pharmacy or its representative agrees to the terms in writing.
(8)(b)(1) Except for a drug reimbursed, directly or
indirectly, by the Medicaid program, a pharmacy benefits
manager may not vary the amount athe pharmacy benefits manager
reimburses an entity for a drug, including each and every
prescription medication that is eligible for specialty tier
placement by the Centers for Medicare and Medicaid Services
pursuant to 42 C.F.R. § 423.560, regardless of any provision
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pursuant to 42 C.F.R. § 423.560, regardless of any provision
of law to the contrary, on the basis of whether:
a. The drug is subject to an agreement under 42 U.S.C.
§ 256b; or
b. The entity participates in the program set forth in
42 U.S.C. § 256b.
(9)(2) If an entity participates, directly or
indirectly, in the program set forth in 42 U.S.C. § 256b, a
pharmacy benefits manager may not do any of the following:
a. Assess a fee, charge-back, or other adjustment on
the entity.
b. Restrict access to the pharmacy benefits manager's
pharmacy network.
c. Require the entity to enter into a contract with a
specific pharmacy to participate in the pharmacy benefits
manager's pharmacy network.
d. Create a restriction or an additional charge on a
patient who chooses to receive drugs from the entity.
e. Create any additional requirements or restrictions
on the entity.
(10)(3)A pharmacy benefits manager may not
Requirerequire a claim for a drug to include a modifier to
indicate that the drug is subject to an agreement under 42
U.S.C. § 256b.
(11)(c) A pharmacy benefits manager may not
Penalizepenalize or retaliate against a pharmacist or pharmacy
for exercising rights under this chapter or the Pharmacy Audit
Integrity ActArticle 8 of Chapter 23 of Title 34 ."
Section 2. Section 27-45A-13 is added to the Code of
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Section 2. Section 27-45A-13 is added to the Code of
Alabama 1975, to read as follows:
§27-45A-13
(a) For the purposes of this section, the following
terms have the following meanings:
(1) CLIENT. A health insurer or a payor.
(2) PHARMACY BENEFIT. The part of a health benefit plan
that reimburses for pharmacist services, including
prescription drugs and devices.
(b) A pharmacy benefits manager, directly or through an
affiliate or contracted third party, shall pass on to a client
100 percent of all rebates the pharmacy benefits manager
receives, directly or indirectly, from pharmaceutical
manufacturers in connection with claims the pharmacy benefits
manager administers on behalf of the client's health benefit
plan unless the client directs the pharmacy benefits manager
to apply the rebates to purchases of prescription drugs by
covered individuals at the point-of-sale. Notwithstanding the
foregoing, nothing shall be construed to allow a rebate from a
pharmaceutical manufacturer, directly or indirectly, to a
pharmacy benefits manager, or its PBM affiliate, or its client
where otherwise prohibited by law.
(c) When a client makes a written request to a pharmacy
benefits manager to reassign or transfer a pharmacy benefit to
another pharmacy benefits manager, within 30 days, the
pharmacy benefits manager, directly or through an affiliate or
contracted third party, shall do both of the following:
(1) Provide the client with the prescription drug file.
(2) Establish all electronic data interchange (EDI)
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(2) Establish all electronic data interchange (EDI)
connections necessary for the client to transfer the pharmacy
benefit to the new pharmacy benefits manager and maintain the
EDI for the six-month period following the transfer of the
pharmacy benefit.
(d) A pharmacy benefits manager, directly or through a
PBM affiliate or contracted party, may not do any of the
following:
(1) Engage in spread pricing.
(2) Charge a client more for a drug at a pharmacy
affiliated with the pharmacy benefits manager than the actual
acquisition cost for the ingredient cost of the drug.
(3) Enter into any agreement with a client which
defines "rebate" more narrowly than the definition in this
article or that in any way circumvents the requirement of this
section to pass 100 percent of the rebates back to the client.
(4) Enter into any agreement with a pharmaceutical
manufacturer that, directly or indirectly, allocates rebates
earned under one health benefit plan to a different health
benefit plan.
(5) Enter any agreement with a pharmaceutical
manufacturer for a rebate that is not attributable to a
specific drug covered under a specific health benefit plan.
(6) Charge a client a fee for access to a prescription
drug file that exceeds the pharmacy benefits manager's
reasonable cost of providing access.
(7) Deny or delay or take any action calculated to
inhibit the transfer of a prescription drug file to a client
when the client requests the transfer of the file.
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when the client requests the transfer of the file.
(8) Take any action calculated to penalize a client for
switching to a new pharmacy benefits manager, including, but
not limited to, charging the prospective pharmacy benefits
manager a fee to access the prescription drug file or
withholding rebates due to a client which are earned during
the period before an agreement with the new pharmacy benefits
manager takes effect.
(9) Contract with any party, including a health insurer
or third-party administrator, that engages in any of the
practices prohibited in this section.
Section 3. Section 34-23-187, Code of Alabama 1975, is
amended to read as follows:
"§34-23-187
This article does not shall apply to any audit, review,
or investigation that involves alleged fraud, willful
misrepresentation, or waste abuse that is initiated by a
pharmacy benefits manager ."
Section 4. This act shall become effective on October
1, 2024.
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