Amended IN Assembly April 05, 2017 CALIFORNIA LEGISLATURE 20172018 REGULAR SESSION Assembly Bill No. 315Introduced by Assembly Member WoodFebruary 06, 2017 An act to amend Sections 4100, 4107.5, 4201, 4430, and 4400 of, and to add Sections Section 4037.5 and 4053.2 to, and to add Article 25 (commencing with Section 4427) to Chapter 9 of Division 2 of, and to add Chapter 9.6 (commencing with Section 4445) to Division 2 of, the Business and Professions Code, relating to pharmacy benefits. LEGISLATIVE COUNSEL'S DIGESTAB 315, as amended, Wood. Pharmacy benefits management.Existing law, the Pharmacy Law, provides for the licensure and regulation of pharmacists and pharmacies by the California State Board of Pharmacy. A violation of the Pharmacy Law is a crime. Existing law also imposes requirements on audits of pharmacy services provided to beneficiaries of a health benefit plan, as specified.This bill would require pharmacy benefit managers, as defined, and designated pharmacy benefits manager representatives to be licensed by the California State Board of Pharmacy, as prescribed, and would establish qualifications for the designated pharmacy benefits manager representative license. The bill would prescribe the duties of the designated pharmacy benefits manager representative, as specified. The bill would also require pharmacy benefit managers to make specified disclosures to the board on an annual basis, as specified. prescribed. The bill would make conforming changes to related provisions. Because a violation of these provisions under the Pharmacy Law would be a crime, the bill would impose a state-mandated local program.This bill would also provide that a pharmacy benefit manager, except as specified, has a fiduciary duty to a purchaser, as defined, and would require a pharmacy benefit manager to disclose to a purchaser any conflict of interest that would interfere with the discharge of that duty. The bill would require a pharmacy benefit manager to periodically disclose to a purchaser certain information such as drug acquisition cost, rebates received from pharmaceutical manufacturers, and rates negotiated with pharmacies. The bill would apply these provisions to a contract or contractual relationship between a pharmacy benefit manager and a purchaser that is entered into, issued, amended, renewed, or delivered on or after January 1, 2018.The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.This bill would provide that no reimbursement is required by this act for a specified reason.Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: YES Bill TextThe people of the State of California do enact as follows:SECTION 1.(a)Pharmacy benefit managers (PBMs) were formed over 40 years ago to assist insurers and employers in managing prescription drug benefits for employees and insureds. PBMs are used by many health plans, self-insured employers, and government payers to deliver medications to their beneficiaries. The three largest PBMs provide prescription drug coverage to more than 200 million Americans or roughly 78 percent of Americans whose pharmacy benefits are managed by a PBM.(b)According to a Kaiser Family Foundation publication, PBMs have evolved from basic claims administrators to more complex organizations offering a wide range of prescription drug managed tools, such as drug utilization review, disease management, and consultative services. PBMs can also assist clients with establishing their benefit structure, including developing and maintaining a prescription drug formulary, developing a network of pharmacy providers, and providing mail order fulfillment services. PBMs may achieve savings for their customers by negotiating discounts with drug manufacturers and through cost containment programs, including use of formularies and cost sharing. PBMs were effective in negotiating prices that initially reduced prescription drug prices, and held those costs in check.(c)In recent years, there have been concerns raised regarding the value of PBMs. Consumer advocates argue manufacturer rebate money causes PBMs to favor more costly brand-name drugs over generic or lower-cost, therapeutically equivalent brand-name drugs and that the business practices of PBMs generally lack transparency.(d)Additionally, mergers between PBMs and pharmaceutical manufacturers and large pharmacy chains have also occurred. Concerns of potential conflict of interest, inhibiting competition in the dispensing of prescription drugs, actual increased out-of-pocket costs for consumers, and denying consumer choice, and whether employers and insurers have received a reasonable and fair share of the discounts and other price concessions PMBs negotiated on their behalf, are some of the biggest concerns.(e)States like Arkansas, Georgia, Iowa, Kansas, Mississippi, North Dakota, South Dakota, Vermont, and Washington have enacted laws to regulate the practice of PBMs.(f)Currently, PBMs in California are unregulated. This lack of oversight coupled with a lack of transparency regarding business operations has generated numerous questions. In order to address questions that have been raised about whether the industry fully discloses how much it is actually saving insurer and employer clients and what portion of those savings are actually passed along to consumers, the Legislature needs to address this issue through the regulation of PBMs.SEC. 2.SECTION 1. Section 4037.5 is added to the Business and Professions Code, to read:4037.5. (a)Pharmacy benefit manager means a person, business, or other entity that, pursuant to a contract or under an employment relationship with a carrier, health benefit plan sponsor, or other third-party payer, either directly or through an intermediary, manages the prescription drug coverage provided by the carrier, plan sponsor, or other third-party payer, including, but not limited to, the processing and payment of claims for prescription drugs, the performance of drug utilization review, the processing of drug prior authorization requests, the adjudication of appeals or grievances related to prescription drug coverage, contracting with network pharmacies, and controlling the cost of covered prescription drugs.(b)Pharmacy benefit manager shall not include a nonprofit, tax-exempt California licensed health plan that contracts with no more than two medical groups in the state, or to its affiliated entities, or any information exchanged pursuant to their contracts with organizations to administer their pharmacy benefits and services.SEC. 3.Section 4053.2 is added to the Business and Professions Code, to read:4053.2.(a)Notwithstanding Section 4051, the board shall issue a license to a pharmacist or a qualified individual as a designated pharmacy benefits manager representative to provide sufficient and qualified supervision of a pharmacy benefit manager. Each pharmacy benefit manager shall designate a pharmacy benefits manager representative to protect the public health and safety in the handling, storage, warehousing, distribution, and shipment of dangerous drugs and dangerous devices for each of the pharmacy benefit managers premises.(b)An individual who is at least 18 years of age may apply for a designated pharmacy benefits manager representative license. In order to obtain and maintain that license, the individual shall meet all of the following requirements:(1)He or she shall be a high school graduate or possess a General Education Development certificate equivalent.(2)He or she shall meet one of the following requirements:(A)Have a minimum of one year of paid work experience in the past three years with a pharmacy benefit manager.(B)Have a minimum of one year of paid work experience in the past three years in a licensed pharmacy, or with a drug wholesaler, drug distributor, or drug manufacturer, performing duties related to the distribution or dispensing of dangerous drugs or dangerous devices.(3)(A)He or she shall complete a training program approved by the board that, at a minimum, addresses each of the following subjects:(i)Knowledge and understanding of California law and federal law relating to the distribution of dangerous drugs and dangerous devices.(ii)Knowledge and understanding of California law and federal law relating to the distribution of controlled substances.(iii)Knowledge and understanding of quality control systems.(iv)Knowledge and understanding of the United States Pharmacopoeia or federal Food and Drug Administration standards relating to the safe storage, handling, and transport of dangerous drugs and dangerous devices.(B)The board may, by regulation, require the training program required under this paragraph to include additional material.(C)The board shall not issue a license as a designated pharmacy benefits manager representative until the applicant provides proof of completion of the training required by this paragraph to the board.(c)A pharmacy benefit manager shall not operate without at least one designated pharmacy benefits manager representative present at each of its licensed places of business.(d)A pharmacist licensed in California and fulfilling the duties of a designated pharmacy benefits manager representative as specified in subdivision (a) shall not be required to obtain a separate license as a designated pharmacy benefits manager representative.SEC. 4.SEC. 2. Section 4100 of the Business and Professions Code is amended to read:4100. Within 30 days after changing his or her address of record with the board or after changing his or her name a change of address of record with the board or a change of name according to law, a pharmacist, intern pharmacist, technician, designated representative, or designated pharmacy benefits manager representative pharmacy benefit manager shall notify the executive officer of the board of the change of address or change of name.SEC. 5.SEC. 3. Section 4107.5 of the Business and Professions Code is amended to read:4107.5. If a manufacturer, wholesaler, third-party logistics provider, pharmacy benefit manager, or pharmacy has reasonable cause to believe that a dangerous drug or dangerous device in, or having been in, its possession is counterfeit or the subject of a fraudulent transaction, the manufacturer, wholesaler, third-party logistics provider, pharmacy benefit manager, or pharmacy shall notify the board within 72 hours of obtaining that knowledge. This section shall apply to any dangerous drug or dangerous device that has been sold or distributed in or through this state.SEC. 6.SEC. 4. Section 4201 of the Business and Professions Code is amended to read:4201. (a) Each application to conduct a pharmacy, pharmacy benefit manager, wholesaler, third-party logistics provider, veterinary food-animal drug retailer, or outsourcing facility shall be made on a form furnished by the board and shall state the name, address, usual occupation, and professional qualifications, if any, of the applicant. If the applicant is other than a natural person, the application shall state the information as to each person beneficially interested therein or any person with management or control over the license.(b) As used in this section, and subject to subdivision (c), the term person beneficially interested means and includes:(1) If the applicant is a partnership or other unincorporated association, each partner or member.(2) If the applicant is a corporation, each of its officers, directors, and stockholders, provided that a natural person shall not be deemed to be beneficially interested in a nonprofit corporation.(3) If the applicant is a limited liability company, each officer, manager, or member.(c) If the applicant is a partnership or other unincorporated association, a limited liability company, or a corporation, and the number of partners, members, or stockholders, as the case may be, exceeds five, the application shall so state, and shall further state the information required by subdivision (a) as to each of the five partners, members, or stockholders who own the five largest interests in the applicant entity. Upon request by the executive officer, the applicant shall furnish the board with the information required by subdivision (a) as to partners, members, or stockholders not named in the application, or shall refer the board to an appropriate source of that information.(d) The application shall contain a statement to the effect that the applicant has not been convicted of a felony and has not violated any of the provisions of this chapter. If the applicant cannot make this statement, the application shall contain a statement of the violation, if any, or reasons which will prevent the applicant from being able to comply with the requirements with respect to the statement.(e) Upon the approval of the application by the board and payment of the fee required by this chapter for each pharmacy, pharmacy benefit manager, wholesaler, third-party logistics provider, or veterinary food-animal drug retailer, the executive officer of the board shall issue a license to conduct a pharmacy, wholesaler, third-party logistics provider, veterinary food-animal drug retailer, or outsourcing facility if all of the provisions of this chapter have been complied with.(f) Notwithstanding any other law, the pharmacy license shall authorize the holder to conduct a pharmacy. The license shall be renewed annually and shall not be transferable.(g) Notwithstanding any other law, the pharmacy benefit manager license shall authorize the holder to conduct business as a pharmacy benefit manager as defined in Section 4037.5. The license shall be renewed annually and shall not be transferable.(h) Notwithstanding any other law, the wholesaler license shall authorize the holder to wholesale dangerous drugs and dangerous devices. The license shall be renewed annually and shall not be transferable.(i) Notwithstanding any other law, the third-party logistics provider license shall authorize the holder to provide or coordinate warehousing, distribution, or other similar services of dangerous drugs and dangerous devices. The license shall be renewed annually and shall not be transferable.(j) Notwithstanding any other law, the veterinary food-animal drug retailer license shall authorize the holder to conduct a veterinary food-animal drug retailer and to sell and dispense veterinary food-animal drugs as defined in Section 4042.(k) For licenses referred to in subdivisions (f), (g), (h), (i), and (j), any change in the proposed beneficial ownership interest shall be reported to the board within 30 days thereafter upon a form to be furnished by the board.SEC. 7.SEC. 5. Section 4400 of the Business and Professions Code, as added by Section 26 of Chapter 799 of the Statutes of 2016, is amended to read:4400. The amount of fees and penalties prescribed by this chapter, except as otherwise provided, is that fixed by the board according to the following schedule:(a) The fee for a nongovernmental pharmacy license shall be five hundred twenty dollars ($520) and may be increased to five hundred seventy dollars ($570). The fee for the issuance of a temporary nongovernmental pharmacy permit shall be two hundred fifty dollars ($250) and may be increased to three hundred twenty-five dollars ($325).(b) The fee for a nongovernmental pharmacy license annual renewal shall be six hundred sixty-five dollars ($665) and may be increased to nine hundred thirty dollars ($930).(c) The fee for the pharmacist application and examination shall be two hundred sixty dollars ($260) and may be increased to two hundred eighty-five dollars ($285).(d) The fee for regrading an examination shall be ninety dollars ($90) and may be increased to one hundred fifteen dollars ($115). If an error in grading is found and the applicant passes the examination, the regrading fee shall be refunded.(e) The fee for a pharmacist license shall be one hundred ninety-five dollars ($195) and may be increased to two hundred fifteen dollars ($215). The fee for a pharmacist biennial renewal shall be three hundred sixty dollars ($360) and may be increased to five hundred five dollars ($505).(f) The fee for a nongovernmental wholesaler or third-party logistics provider license and annual renewal shall be seven hundred eighty dollars ($780) and may be increased to eight hundred twenty dollars ($820). The application fee for any additional location after licensure of the first 20 locations shall be three hundred dollars ($300) and may be decreased to no less than two hundred twenty-five dollars ($225). A temporary license fee shall be seven hundred fifteen dollars ($715) and may be decreased to no less than five hundred fifty dollars ($550).(g) The fee for a hypodermic license shall be one hundred seventy dollars ($170) and may be increased to two hundred forty dollars ($240). The fee for a hypodermic license renewal shall be two hundred dollars ($200) and may be increased to two hundred eighty dollars ($280).(h) (1) The fee for application, investigation, and issuance of a license as a designated representative pursuant to Section 4053, or as a designated representative-3PL pursuant to Section 4053.1, shall be one hundred fifty dollars ($150) and may be increased to two hundred ten dollars ($210).(2) The fee for the annual renewal of a license as a designated representative or designated representative-3PL shall be two hundred fifteen dollars ($215) and may be increased to three hundred dollars ($300).(i) (1) The fee for the application, investigation, and issuance of a license as a designated representative for a veterinary food-animal drug retailer pursuant to Section 4053 shall be one hundred fifty dollars ($150) and may be increased to two hundred ten dollars ($210).(2) The fee for the annual renewal of a license as a designated representative for a veterinary food-animal drug retailer shall be two hundred fifteen dollars ($215) and may be increased to three hundred dollars ($300).(j) (1) The application fee for a nonresident wholesaler or third-party logistics provider license issued pursuant to Section 4161 shall be seven hundred eighty dollars ($780) and may be increased to eight hundred twenty dollars ($820).(2) For nonresident wholesalers or third-party logistics providers that have 21 or more facilities operating nationwide the application fees for the first 20 locations shall be seven hundred eighty dollars ($780) and may be increased to eight hundred twenty dollars ($820). The application fee for any additional location after licensure of the first 20 locations shall be three hundred dollars ($300) and may be decreased to no less than two hundred twenty-five dollars ($225). A temporary license fee shall be seven hundred fifteen dollars ($715) and may be decreased to no less than five hundred fifty dollars ($550).(3) The annual renewal fee for a nonresident wholesaler license or third-party logistics provider license issued pursuant to Section 4161 shall be seven hundred eighty dollars ($780) and may be increased to eight hundred twenty dollars ($820).(k) The fee for evaluation of continuing education courses for accreditation shall be set by the board at an amount not to exceed forty dollars ($40) per course hour.(l) The fee for an intern pharmacist license shall be one hundred sixty-five dollars ($165) and may be increased to two hundred thirty dollars ($230). The fee for transfer of intern hours or verification of licensure to another state shall be twenty-five dollars ($25) and may be increased to thirty dollars ($30).(m) The board may waive or refund the additional fee for the issuance of a license where the license is issued less than 45 days before the next regular renewal date.(n) The fee for the reissuance of any license, or renewal thereof, that has been lost or destroyed or reissued due to a name change shall be thirty-five dollars ($35) and may be increased to forty-five dollars ($45).(o) The fee for the reissuance of any license, or renewal thereof, that must be reissued because of a change in the information, shall be one hundred dollars ($100) and may be increased to one hundred thirty dollars ($130).(p) It is the intent of the Legislature that, in setting fees pursuant to this section, the board shall seek to maintain a reserve in the Pharmacy Board Contingent Fund equal to approximately one years operating expenditures.(q) The fee for any applicant for a nongovernmental clinic license shall be five hundred twenty dollars ($520) for each license and may be increased to five hundred seventy dollars ($570). The annual fee for renewal of the license shall be three hundred twenty-five dollars ($325) for each license and may be increased to three hundred sixty dollars ($360).(r) The fee for the issuance of a pharmacy technician license shall be one hundred forty dollars ($140) and may be increased to one hundred ninety-five dollars ($195). The fee for renewal of a pharmacy technician license shall be one hundred forty dollars ($140) and may be increased to one hundred ninety-five dollars ($195).(s) The fee for a veterinary food-animal drug retailer license shall be four hundred thirty-five dollars ($435) and may be increased to six hundred ten dollars ($610). The annual renewal fee for a veterinary food-animal drug retailer license shall be three hundred thirty dollars ($330) and may be increased to four hundred sixty dollars ($460).(t) The fee for issuance of a retired license pursuant to Section 4200.5 shall be thirty-five dollars ($35) and may be increased to forty-five dollars ($45).(u) The fee for issuance of a nongovernmental sterile compounding pharmacy license shall be one thousand six hundred forty-five dollars ($1,645) and may be increased to two thousand three hundred five dollars ($2,305). The fee for a temporary license shall be five hundred fifty dollars ($550) and may be increased to seven hundred fifteen dollars ($715). The annual renewal fee of the license shall be one thousand three hundred twenty-five dollars ($1,325) and may be increased to one thousand eight hundred fifty-five dollars ($1,855).(v) The fee for the issuance of a nonresident sterile compounding pharmacy license shall be two thousand three hundred eighty dollars ($2,380) and may be increased to three thousand three hundred thirty-five dollars ($3,335). The annual renewal of the license shall be two thousand two hundred seventy dollars ($2,270) and may be increased to three thousand one hundred eighty dollars ($3,180). In addition to paying that application fee, the nonresident sterile compounding pharmacy shall deposit, when submitting the application, a reasonable amount, as determined by the board, necessary to cover the boards estimated cost of performing the inspection required by Section 4127.2. If the required deposit is not submitted with the application, the application shall be deemed to be incomplete. If the actual cost of the inspection exceeds the amount deposited, the board shall provide to the applicant a written invoice for the remaining amount and shall not take action on the application until the full amount has been paid to the board. If the amount deposited exceeds the amount of actual and necessary costs incurred, the board shall remit the difference to the applicant.(w) The fee for the issuance of an outsourcing facility license shall be two thousand two hundred seventy dollars ($2,270) and may be increased to up to three thousand one hundred eighty dollars ($3,180) by the board. The fee for the renewal of an outsourcing facility license shall be one thousand three hundred twenty-five dollars ($1,325) and may be increased to up to one thousand eight hundred fifty-five dollars ($1,855) by the board. The fee for a temporary outsourcing facility license shall be seven hundred fifteen dollars ($715).(x) The fee for the issuance of a nonresident outsourcing facility license shall be two thousand three hundred eighty dollars ($2,380) and may be increased to up to three thousand three hundred thirty-five dollars ($3,335) by the board. The fee for the renewal of a nonresident outsourcing facility license shall be two thousand two hundred seventy dollars ($2,270) and may be increased to up to three thousand one hundred eighty dollars ($3,180) by the board. In addition to paying that application fee, the nonresident outsourcing facility shall deposit, when submitting the application, a reasonable amount, as determined by the board, necessary to cover the boards estimated cost of performing the inspection required by Section 4129.2. If the required deposit is not submitted with the application, the application shall be deemed to be incomplete. If the actual cost of the inspection exceeds the amount deposited, the board shall provide to the applicant a written invoice for the remaining amount and shall not take action on the application until the full amount has been paid to the board. If the amount deposited exceeds the amount of actual and necessary costs incurred, the board shall remit the difference to the applicant.(y) The fee for the issuance of a centralized hospital packaging license shall be eight hundred twenty dollars ($820) and may be increased to one thousand one hundred fifty dollars ($1,150). The annual renewal of the license shall be eight hundred five dollars ($805) and may be increased to one thousand one hundred twenty-five dollars ($1,125).(z)(1)The application fee for a pharmacy benefits manager representative license shall be ___ dollars ($___) and may be decreased to no less than ___ dollars ($___).(2)(z) (1) The application fee for a pharmacy benefit manager license shall be ___ dollars ($___) and may be decreased to no less than ___ dollars ($___).(3)(2) The licensure fee imposed under this subdivision shall not exceed the actual administrative costs in administering the provisions relating to the licensure and regulation of those licensees.(aa)This section shall become operative on July 1, 2017.SEC. 8.SEC. 6. Article 25 (commencing with Section 4427) is added to Chapter 9 of Division 2 of the Business and Professions Code, to read: Article 25. Pharmacy Benefit Managers4427. (a) (1) A person or entity shall not act as pharmacy benefit manager for any dangerous drug or dangerous device unless he, she, or it has obtained a license from the board.(2) (A) A pharmacy benefit manager shall disclose to the board the location, names, and titles of all of the following:(i) Its agent for service of process in this state.(ii) All pharmacists of the pharmacy benefit manager who are dispensing controlled substances, dangerous drugs, or dangerous devices to residents of this state.(iii)The designated pharmacy benefits management representative by location.(B) This information shall be made disclosed on an annual basis and within 30 days after any change of office, corporate officer, partner, or pharmacist.(b) Upon approval by the board and the payment of the required fee, the board shall issue a license to the applicant.(c)(1)Each place of business of a pharmacy benefit manager in California shall be supervised and managed by a designated pharmacy benefits management representative. The designated pharmacy benefits management representative shall be responsible for the pharmacy benefit managers compliance with state and federal laws.(2)As part of its initial application for a license, and for each renewal, each pharmacy benefit manager shall, on a form designed by the board, provide identifying information and the California license number for a designated pharmacy benefits management representative or pharmacist proposed to serve as the designated representative-in-charge.(3)The board shall not issue or renew a pharmacy benefit manager license without identification of an approved designated pharmacy benefits management representative.(4)The designated pharmacy benefits management representative shall maintain an active license as a designated pharmacy benefits management representative with the board at all times during which he or she is designated as the designated pharmacy benefits management representative.(d)A pharmacy benefit manager shall notify the board in writing, on a form designed by the board, within 30 days of the date when a designated pharmacy benefits management representative ceases to act as the designated pharmacy benefits management representative, and shall on the same form propose another designated pharmacy benefits management representative or pharmacist to take over as the designated pharmacy benefits management representative.(e)(1)The board may issue a temporary license, upon conditions and for periods of time as the board determines to be in the public interest. A temporary license fee shall be required in an amount established by the board as specified in subdivision (z) of Section 4400.(2)When needed to protect public safety, a temporary license may be issued for a period not to exceed 180 days, subject to terms and conditions that the board deems necessary.(3)If the board determines that a temporary license was issued by mistake or denies the application for a permanent license, the temporary license shall terminate upon either personal service of the notice of termination upon the licenseholder or service by certified mail, return receipt requested, at the licenseholders address of record with the board, whichever occurs first.(4)Neither for purposes of retaining a temporary license, nor for purposes of any disciplinary or license denial proceeding before the board, shall the temporary licenseholder be deemed to have a vested property right or interest in the license.4428.(a)A pharmacy benefit manager shall provide the information described in this section to the board, on an annual basis covering the contract year and in such form and manner as the board shall specify:(1)For California residents whose prescription drug benefit is managed by the pharmacy benefit manager, the percentage of all oral prescriptions and self-administered drugs that were dispensed through pharmacies affiliated with the pharmacy benefit manager and the percentage of oral and self-administered drugs dispensed through retail pharmacies.(2)The aggregate amount of discounts or price concessions (excluding bona fide service fees, which include, but are not limited to, distribution service fees, inventory management fees, product stocking allowances, and fees associated with administrative services agreements and patient care programs (such as medication compliance programs and patient education programs)) that the pharmacy benefit manager received from manufacturers of prescription drugs that were attributable to utilization by California residents whose prescription drug benefit was managed by a pharmacy benefit manager.(3)The aggregate amount, and the type of rebates, discounts, or price concessions (excluding bona fide services, which include, but are not limited to, distribution service fees, inventory management fees, product stocking allowances, and fees associated with administrative service agreements and patient care programs (such as medication compliance programs and patient education programs)) provided to health care service plans, as defined in subdivision (f) of Section 1345 of the Health and Safety Code, and health insurers, as defined in subdivision (b) of Section 106 of the Insurance Code, and that are attributable to patient utilization under the plan, and the aggregate amount of the rebates, discounts, or price concessions that are passed through to enrollees and the total number of prescriptions dispensed.(b)The board shall make the information provided by pharmacy benefit managers in subdivision (a) available as part of its annual report.4429.4428. The board has the authority to enforce the provisions of this article, including the authority to adopt, amend, or repeal any rules and regulations, not inconsistent with the laws of this state, as may be necessary for the protection of the public and to implement this article.4429. This article shall not apply to the following:(a) A health care service plan or health insurer, if the health care service plan or health insurer offers or provides pharmacy benefit management services and if those services are offered or provided only to enrollees, subscribers, policyholders, or insureds who are also covered by health benefits offered or provided by that health care service plan or health insurer.(b) An affiliate, subsidiary, related entity or contracted medical groups of a health care service plan or health insurer that would otherwise qualify as a pharmacy benefit manager but offers or provides services only to enrollees, subscribers, policyholders, or insureds who are also covered by health benefits offered or provided by the health care service plan or health insurer.SEC. 7. Section 4430 of the Business and Professions Code is amended to read:4430. For purposes of this chapter, the following definitions shall apply:(a) Carrier means a health care service plan, as defined in Section 1345 of the Health and Safety Code, or a health insurer that issues policies of health insurance, as defined in Section 106 of the Insurance Code.(b) Clerical or recordkeeping error includes a typographical error, scriveners error, or computer error in a required document or record.(c) Extrapolation means the practice of inferring a frequency or dollar amount of overpayments, underpayments, nonvalid claims, or other errors on any portion of claims submitted, based on the frequency or dollar amount of overpayments, underpayments, nonvalid claims, or other errors actually measured in a sample of claims.(d) Health benefit plan means any plan or program that provides, arranges, pays for, or reimburses the cost of health benefits. Health benefit plan includes, but is not limited to, a health care service plan contract issued by a health care service plan, as defined in Section 1345 of the Health and Safety Code, and a policy of health insurance, as defined in Section 106 of the Insurance Code, issued by a health insurer.(e) Maximum allowable cost means the maximum amount that a pharmacy benefit manager will reimburse a pharmacy for the cost of a drug.(f) Maximum allowable cost list means a list of drugs for which a maximum allowable cost has been established by a pharmacy benefit manager.(g) Obsolete means a drug that may be listed in national drug pricing compendia but is no longer available to be dispensed based on the expiration date of the last lot manufactured.(h) Pharmacy has the same meaning as provided in Section 4037.(i) Pharmacy audit means an audit, either onsite or remotely, of any records of a pharmacy conducted by or on behalf of a carrier or a pharmacy benefits manager, or a representative thereof, for prescription drugs that were dispensed by that pharmacy to beneficiaries of a health benefit plan pursuant to a contract with the health benefit plan or the issuer or administrator thereof. Pharmacy audit does not include a concurrent review or desk audit that occurs within three business days of transmission of a claim, or a concurrent review or desk audit if a chargeback or recoupment is not demanded.(j) Pharmacy benefit manager means a person, business, or other entity that, pursuant to a contract or under an employment relationship with a carrier, health benefit plan sponsor, or other third-party payer, either directly or through an intermediary, manages the prescription drug coverage provided by the carrier, plan sponsor, or other third-party payer, including, but not limited to, the processing and payment of claims for prescription drugs, the performance of drug utilization review, the processing of drug prior authorization requests, the adjudication of appeals or grievances related to prescription drug coverage, contracting with network pharmacies, and controlling the cost of covered prescription drugs. described in Section 4037.5.SEC. 8. Chapter 9.6 (commencing with Section 4445) is added to Division 2 of the Business and Professions Code, to read: CHAPTER 9.6. Pharmacy Benefit Management4445. For the purposes of this chapter, the following definitions shall apply:(a) Labeler means a person or entity that receives prescription drugs from a manufacturer or wholesaler and repackages those drugs for later retail sale and who has a labeler code from the federal Food and Drug Administration under Section 207.20 of Title 21 of the Code of Federal Regulations.(b) Pharmacy benefit manager means a person, business, or entity described in Section 4037.5.(c) Proprietary information means trade secrets and information on pricing, costs, revenue, taxes, market share, negotiating strategies, customers, and personnel that is held by a private entity and used for that entitys business purposes.(d) Purchaser means health benefit plan sponsor or other third-party payer with whom a pharmacy benefit manager contracts to provide the administration and management of prescription drug benefits.4446. A pharmacy benefit manager has a fiduciary duty to a purchaser and shall discharge that duty in accordance with all applicable laws.4447. A pharmacy benefit manager shall notify a purchaser in writing of any activity, policy, or practice of the pharmacy benefit manager that directly or indirectly presents a conflict of interest that interferes with the discharge of the pharmacy benefit managers fiduciary duty to the purchaser.4448. (a) Beginning in the second fiscal quarter after the effective date of a contract between a pharmacy benefit manager and a purchaser, the pharmacy benefit manager shall, on a monthly basis, disclose the following information to the purchaser with respect to prescription product benefits specific to the purchaser:(1) The aggregate acquisition cost from a pharmaceutical manufacturer or labeler for each therapeutic class of drugs.(2) The aggregate amount of rebates received by the pharmacy benefit manager for each therapeutic class of drugs. The aggregate amount of rebates shall include any utilization discounts the pharmacy benefit manager receives from a pharmaceutical manufacturer or labeler.(3) Any administrative fees received from a pharmaceutical manufacturer or labeler.(4) The aggregate of rates negotiated by the pharmacy benefit manager with pharmacies with respect to each therapeutic class of drug.(5) Prescription drug utilization information for the purchasers enrollees or insureds that is not specific to any individual enrollee or insured.(b) The information disclosed pursuant to subdivision (a) shall include all retail, mail order, specialty, and compounded prescription products.(c) For the purposes of subdivision (a), a therapeutic class shall include at least two drugs. If there are fewer than two drugs in a therapeutic class, the information required by subdivision (a) shall be reported by therapeutic category.4449. Except for utilization information, a pharmacy benefit manager need not make the disclosures required by Section 4448 unless and until the purchaser agrees, in writing, to maintain as confidential any proprietary information.4450. This article shall apply to a contract or a contractual relationship between a pharmacy benefit manager and a purchaser that is entered into, issued, amended, renewed, or delivered on or after January 1, 2018.4451. This article shall not apply to the following:(a) A health care service plan or health insurer, if the health care service plan or health insurer offers or provides pharmacy benefit management services and if those services are offered or provided only to enrollees, subscribers, policyholders, or insureds who are also covered by health benefits offered or provided by that health care service plan or health insurer.(b) An affiliate, subsidiary, related entity, or contracted medical groups of a health care service plan or health insurer that would otherwise qualify as a pharmacy benefit manager but offers or provides services only to enrollees, subscribers, policyholders, or insureds who are also covered by health benefits offered or provided by the health care service plan or health insurer.SEC. 9. No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.
Amended IN Assembly April 05, 2017 CALIFORNIA LEGISLATURE 20172018 REGULAR SESSION Assembly Bill No. 315Introduced by Assembly Member WoodFebruary 06, 2017 An act to amend Sections 4100, 4107.5, 4201, 4430, and 4400 of, and to add Sections Section 4037.5 and 4053.2 to, and to add Article 25 (commencing with Section 4427) to Chapter 9 of Division 2 of, and to add Chapter 9.6 (commencing with Section 4445) to Division 2 of, the Business and Professions Code, relating to pharmacy benefits. LEGISLATIVE COUNSEL'S DIGESTAB 315, as amended, Wood. Pharmacy benefits management.Existing law, the Pharmacy Law, provides for the licensure and regulation of pharmacists and pharmacies by the California State Board of Pharmacy. A violation of the Pharmacy Law is a crime. Existing law also imposes requirements on audits of pharmacy services provided to beneficiaries of a health benefit plan, as specified.This bill would require pharmacy benefit managers, as defined, and designated pharmacy benefits manager representatives to be licensed by the California State Board of Pharmacy, as prescribed, and would establish qualifications for the designated pharmacy benefits manager representative license. The bill would prescribe the duties of the designated pharmacy benefits manager representative, as specified. The bill would also require pharmacy benefit managers to make specified disclosures to the board on an annual basis, as specified. prescribed. The bill would make conforming changes to related provisions. Because a violation of these provisions under the Pharmacy Law would be a crime, the bill would impose a state-mandated local program.This bill would also provide that a pharmacy benefit manager, except as specified, has a fiduciary duty to a purchaser, as defined, and would require a pharmacy benefit manager to disclose to a purchaser any conflict of interest that would interfere with the discharge of that duty. The bill would require a pharmacy benefit manager to periodically disclose to a purchaser certain information such as drug acquisition cost, rebates received from pharmaceutical manufacturers, and rates negotiated with pharmacies. The bill would apply these provisions to a contract or contractual relationship between a pharmacy benefit manager and a purchaser that is entered into, issued, amended, renewed, or delivered on or after January 1, 2018.The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.This bill would provide that no reimbursement is required by this act for a specified reason.Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: YES
Amended IN Assembly April 05, 2017
Amended IN Assembly April 05, 2017
CALIFORNIA LEGISLATURE 20172018 REGULAR SESSION
Assembly Bill No. 315
Introduced by Assembly Member WoodFebruary 06, 2017
Introduced by Assembly Member Wood
February 06, 2017
An act to amend Sections 4100, 4107.5, 4201, 4430, and 4400 of, and to add Sections Section 4037.5 and 4053.2 to, and to add Article 25 (commencing with Section 4427) to Chapter 9 of Division 2 of, and to add Chapter 9.6 (commencing with Section 4445) to Division 2 of, the Business and Professions Code, relating to pharmacy benefits.
LEGISLATIVE COUNSEL'S DIGEST
## LEGISLATIVE COUNSEL'S DIGEST
AB 315, as amended, Wood. Pharmacy benefits management.
Existing law, the Pharmacy Law, provides for the licensure and regulation of pharmacists and pharmacies by the California State Board of Pharmacy. A violation of the Pharmacy Law is a crime. Existing law also imposes requirements on audits of pharmacy services provided to beneficiaries of a health benefit plan, as specified.This bill would require pharmacy benefit managers, as defined, and designated pharmacy benefits manager representatives to be licensed by the California State Board of Pharmacy, as prescribed, and would establish qualifications for the designated pharmacy benefits manager representative license. The bill would prescribe the duties of the designated pharmacy benefits manager representative, as specified. The bill would also require pharmacy benefit managers to make specified disclosures to the board on an annual basis, as specified. prescribed. The bill would make conforming changes to related provisions. Because a violation of these provisions under the Pharmacy Law would be a crime, the bill would impose a state-mandated local program.This bill would also provide that a pharmacy benefit manager, except as specified, has a fiduciary duty to a purchaser, as defined, and would require a pharmacy benefit manager to disclose to a purchaser any conflict of interest that would interfere with the discharge of that duty. The bill would require a pharmacy benefit manager to periodically disclose to a purchaser certain information such as drug acquisition cost, rebates received from pharmaceutical manufacturers, and rates negotiated with pharmacies. The bill would apply these provisions to a contract or contractual relationship between a pharmacy benefit manager and a purchaser that is entered into, issued, amended, renewed, or delivered on or after January 1, 2018.The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.This bill would provide that no reimbursement is required by this act for a specified reason.
Existing law, the Pharmacy Law, provides for the licensure and regulation of pharmacists and pharmacies by the California State Board of Pharmacy. A violation of the Pharmacy Law is a crime. Existing law also imposes requirements on audits of pharmacy services provided to beneficiaries of a health benefit plan, as specified.
This bill would require pharmacy benefit managers, as defined, and designated pharmacy benefits manager representatives to be licensed by the California State Board of Pharmacy, as prescribed, and would establish qualifications for the designated pharmacy benefits manager representative license. The bill would prescribe the duties of the designated pharmacy benefits manager representative, as specified. The bill would also require pharmacy benefit managers to make specified disclosures to the board on an annual basis, as specified. prescribed. The bill would make conforming changes to related provisions. Because a violation of these provisions under the Pharmacy Law would be a crime, the bill would impose a state-mandated local program.
This bill would also provide that a pharmacy benefit manager, except as specified, has a fiduciary duty to a purchaser, as defined, and would require a pharmacy benefit manager to disclose to a purchaser any conflict of interest that would interfere with the discharge of that duty. The bill would require a pharmacy benefit manager to periodically disclose to a purchaser certain information such as drug acquisition cost, rebates received from pharmaceutical manufacturers, and rates negotiated with pharmacies. The bill would apply these provisions to a contract or contractual relationship between a pharmacy benefit manager and a purchaser that is entered into, issued, amended, renewed, or delivered on or after January 1, 2018.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
## Digest Key
## Bill Text
The people of the State of California do enact as follows:SECTION 1.(a)Pharmacy benefit managers (PBMs) were formed over 40 years ago to assist insurers and employers in managing prescription drug benefits for employees and insureds. PBMs are used by many health plans, self-insured employers, and government payers to deliver medications to their beneficiaries. The three largest PBMs provide prescription drug coverage to more than 200 million Americans or roughly 78 percent of Americans whose pharmacy benefits are managed by a PBM.(b)According to a Kaiser Family Foundation publication, PBMs have evolved from basic claims administrators to more complex organizations offering a wide range of prescription drug managed tools, such as drug utilization review, disease management, and consultative services. PBMs can also assist clients with establishing their benefit structure, including developing and maintaining a prescription drug formulary, developing a network of pharmacy providers, and providing mail order fulfillment services. PBMs may achieve savings for their customers by negotiating discounts with drug manufacturers and through cost containment programs, including use of formularies and cost sharing. PBMs were effective in negotiating prices that initially reduced prescription drug prices, and held those costs in check.(c)In recent years, there have been concerns raised regarding the value of PBMs. Consumer advocates argue manufacturer rebate money causes PBMs to favor more costly brand-name drugs over generic or lower-cost, therapeutically equivalent brand-name drugs and that the business practices of PBMs generally lack transparency.(d)Additionally, mergers between PBMs and pharmaceutical manufacturers and large pharmacy chains have also occurred. Concerns of potential conflict of interest, inhibiting competition in the dispensing of prescription drugs, actual increased out-of-pocket costs for consumers, and denying consumer choice, and whether employers and insurers have received a reasonable and fair share of the discounts and other price concessions PMBs negotiated on their behalf, are some of the biggest concerns.(e)States like Arkansas, Georgia, Iowa, Kansas, Mississippi, North Dakota, South Dakota, Vermont, and Washington have enacted laws to regulate the practice of PBMs.(f)Currently, PBMs in California are unregulated. This lack of oversight coupled with a lack of transparency regarding business operations has generated numerous questions. In order to address questions that have been raised about whether the industry fully discloses how much it is actually saving insurer and employer clients and what portion of those savings are actually passed along to consumers, the Legislature needs to address this issue through the regulation of PBMs.SEC. 2.SECTION 1. Section 4037.5 is added to the Business and Professions Code, to read:4037.5. (a)Pharmacy benefit manager means a person, business, or other entity that, pursuant to a contract or under an employment relationship with a carrier, health benefit plan sponsor, or other third-party payer, either directly or through an intermediary, manages the prescription drug coverage provided by the carrier, plan sponsor, or other third-party payer, including, but not limited to, the processing and payment of claims for prescription drugs, the performance of drug utilization review, the processing of drug prior authorization requests, the adjudication of appeals or grievances related to prescription drug coverage, contracting with network pharmacies, and controlling the cost of covered prescription drugs.(b)Pharmacy benefit manager shall not include a nonprofit, tax-exempt California licensed health plan that contracts with no more than two medical groups in the state, or to its affiliated entities, or any information exchanged pursuant to their contracts with organizations to administer their pharmacy benefits and services.SEC. 3.Section 4053.2 is added to the Business and Professions Code, to read:4053.2.(a)Notwithstanding Section 4051, the board shall issue a license to a pharmacist or a qualified individual as a designated pharmacy benefits manager representative to provide sufficient and qualified supervision of a pharmacy benefit manager. Each pharmacy benefit manager shall designate a pharmacy benefits manager representative to protect the public health and safety in the handling, storage, warehousing, distribution, and shipment of dangerous drugs and dangerous devices for each of the pharmacy benefit managers premises.(b)An individual who is at least 18 years of age may apply for a designated pharmacy benefits manager representative license. In order to obtain and maintain that license, the individual shall meet all of the following requirements:(1)He or she shall be a high school graduate or possess a General Education Development certificate equivalent.(2)He or she shall meet one of the following requirements:(A)Have a minimum of one year of paid work experience in the past three years with a pharmacy benefit manager.(B)Have a minimum of one year of paid work experience in the past three years in a licensed pharmacy, or with a drug wholesaler, drug distributor, or drug manufacturer, performing duties related to the distribution or dispensing of dangerous drugs or dangerous devices.(3)(A)He or she shall complete a training program approved by the board that, at a minimum, addresses each of the following subjects:(i)Knowledge and understanding of California law and federal law relating to the distribution of dangerous drugs and dangerous devices.(ii)Knowledge and understanding of California law and federal law relating to the distribution of controlled substances.(iii)Knowledge and understanding of quality control systems.(iv)Knowledge and understanding of the United States Pharmacopoeia or federal Food and Drug Administration standards relating to the safe storage, handling, and transport of dangerous drugs and dangerous devices.(B)The board may, by regulation, require the training program required under this paragraph to include additional material.(C)The board shall not issue a license as a designated pharmacy benefits manager representative until the applicant provides proof of completion of the training required by this paragraph to the board.(c)A pharmacy benefit manager shall not operate without at least one designated pharmacy benefits manager representative present at each of its licensed places of business.(d)A pharmacist licensed in California and fulfilling the duties of a designated pharmacy benefits manager representative as specified in subdivision (a) shall not be required to obtain a separate license as a designated pharmacy benefits manager representative.SEC. 4.SEC. 2. Section 4100 of the Business and Professions Code is amended to read:4100. Within 30 days after changing his or her address of record with the board or after changing his or her name a change of address of record with the board or a change of name according to law, a pharmacist, intern pharmacist, technician, designated representative, or designated pharmacy benefits manager representative pharmacy benefit manager shall notify the executive officer of the board of the change of address or change of name.SEC. 5.SEC. 3. Section 4107.5 of the Business and Professions Code is amended to read:4107.5. If a manufacturer, wholesaler, third-party logistics provider, pharmacy benefit manager, or pharmacy has reasonable cause to believe that a dangerous drug or dangerous device in, or having been in, its possession is counterfeit or the subject of a fraudulent transaction, the manufacturer, wholesaler, third-party logistics provider, pharmacy benefit manager, or pharmacy shall notify the board within 72 hours of obtaining that knowledge. This section shall apply to any dangerous drug or dangerous device that has been sold or distributed in or through this state.SEC. 6.SEC. 4. Section 4201 of the Business and Professions Code is amended to read:4201. (a) Each application to conduct a pharmacy, pharmacy benefit manager, wholesaler, third-party logistics provider, veterinary food-animal drug retailer, or outsourcing facility shall be made on a form furnished by the board and shall state the name, address, usual occupation, and professional qualifications, if any, of the applicant. If the applicant is other than a natural person, the application shall state the information as to each person beneficially interested therein or any person with management or control over the license.(b) As used in this section, and subject to subdivision (c), the term person beneficially interested means and includes:(1) If the applicant is a partnership or other unincorporated association, each partner or member.(2) If the applicant is a corporation, each of its officers, directors, and stockholders, provided that a natural person shall not be deemed to be beneficially interested in a nonprofit corporation.(3) If the applicant is a limited liability company, each officer, manager, or member.(c) If the applicant is a partnership or other unincorporated association, a limited liability company, or a corporation, and the number of partners, members, or stockholders, as the case may be, exceeds five, the application shall so state, and shall further state the information required by subdivision (a) as to each of the five partners, members, or stockholders who own the five largest interests in the applicant entity. Upon request by the executive officer, the applicant shall furnish the board with the information required by subdivision (a) as to partners, members, or stockholders not named in the application, or shall refer the board to an appropriate source of that information.(d) The application shall contain a statement to the effect that the applicant has not been convicted of a felony and has not violated any of the provisions of this chapter. If the applicant cannot make this statement, the application shall contain a statement of the violation, if any, or reasons which will prevent the applicant from being able to comply with the requirements with respect to the statement.(e) Upon the approval of the application by the board and payment of the fee required by this chapter for each pharmacy, pharmacy benefit manager, wholesaler, third-party logistics provider, or veterinary food-animal drug retailer, the executive officer of the board shall issue a license to conduct a pharmacy, wholesaler, third-party logistics provider, veterinary food-animal drug retailer, or outsourcing facility if all of the provisions of this chapter have been complied with.(f) Notwithstanding any other law, the pharmacy license shall authorize the holder to conduct a pharmacy. The license shall be renewed annually and shall not be transferable.(g) Notwithstanding any other law, the pharmacy benefit manager license shall authorize the holder to conduct business as a pharmacy benefit manager as defined in Section 4037.5. The license shall be renewed annually and shall not be transferable.(h) Notwithstanding any other law, the wholesaler license shall authorize the holder to wholesale dangerous drugs and dangerous devices. The license shall be renewed annually and shall not be transferable.(i) Notwithstanding any other law, the third-party logistics provider license shall authorize the holder to provide or coordinate warehousing, distribution, or other similar services of dangerous drugs and dangerous devices. The license shall be renewed annually and shall not be transferable.(j) Notwithstanding any other law, the veterinary food-animal drug retailer license shall authorize the holder to conduct a veterinary food-animal drug retailer and to sell and dispense veterinary food-animal drugs as defined in Section 4042.(k) For licenses referred to in subdivisions (f), (g), (h), (i), and (j), any change in the proposed beneficial ownership interest shall be reported to the board within 30 days thereafter upon a form to be furnished by the board.SEC. 7.SEC. 5. Section 4400 of the Business and Professions Code, as added by Section 26 of Chapter 799 of the Statutes of 2016, is amended to read:4400. The amount of fees and penalties prescribed by this chapter, except as otherwise provided, is that fixed by the board according to the following schedule:(a) The fee for a nongovernmental pharmacy license shall be five hundred twenty dollars ($520) and may be increased to five hundred seventy dollars ($570). The fee for the issuance of a temporary nongovernmental pharmacy permit shall be two hundred fifty dollars ($250) and may be increased to three hundred twenty-five dollars ($325).(b) The fee for a nongovernmental pharmacy license annual renewal shall be six hundred sixty-five dollars ($665) and may be increased to nine hundred thirty dollars ($930).(c) The fee for the pharmacist application and examination shall be two hundred sixty dollars ($260) and may be increased to two hundred eighty-five dollars ($285).(d) The fee for regrading an examination shall be ninety dollars ($90) and may be increased to one hundred fifteen dollars ($115). If an error in grading is found and the applicant passes the examination, the regrading fee shall be refunded.(e) The fee for a pharmacist license shall be one hundred ninety-five dollars ($195) and may be increased to two hundred fifteen dollars ($215). The fee for a pharmacist biennial renewal shall be three hundred sixty dollars ($360) and may be increased to five hundred five dollars ($505).(f) The fee for a nongovernmental wholesaler or third-party logistics provider license and annual renewal shall be seven hundred eighty dollars ($780) and may be increased to eight hundred twenty dollars ($820). The application fee for any additional location after licensure of the first 20 locations shall be three hundred dollars ($300) and may be decreased to no less than two hundred twenty-five dollars ($225). A temporary license fee shall be seven hundred fifteen dollars ($715) and may be decreased to no less than five hundred fifty dollars ($550).(g) The fee for a hypodermic license shall be one hundred seventy dollars ($170) and may be increased to two hundred forty dollars ($240). The fee for a hypodermic license renewal shall be two hundred dollars ($200) and may be increased to two hundred eighty dollars ($280).(h) (1) The fee for application, investigation, and issuance of a license as a designated representative pursuant to Section 4053, or as a designated representative-3PL pursuant to Section 4053.1, shall be one hundred fifty dollars ($150) and may be increased to two hundred ten dollars ($210).(2) The fee for the annual renewal of a license as a designated representative or designated representative-3PL shall be two hundred fifteen dollars ($215) and may be increased to three hundred dollars ($300).(i) (1) The fee for the application, investigation, and issuance of a license as a designated representative for a veterinary food-animal drug retailer pursuant to Section 4053 shall be one hundred fifty dollars ($150) and may be increased to two hundred ten dollars ($210).(2) The fee for the annual renewal of a license as a designated representative for a veterinary food-animal drug retailer shall be two hundred fifteen dollars ($215) and may be increased to three hundred dollars ($300).(j) (1) The application fee for a nonresident wholesaler or third-party logistics provider license issued pursuant to Section 4161 shall be seven hundred eighty dollars ($780) and may be increased to eight hundred twenty dollars ($820).(2) For nonresident wholesalers or third-party logistics providers that have 21 or more facilities operating nationwide the application fees for the first 20 locations shall be seven hundred eighty dollars ($780) and may be increased to eight hundred twenty dollars ($820). The application fee for any additional location after licensure of the first 20 locations shall be three hundred dollars ($300) and may be decreased to no less than two hundred twenty-five dollars ($225). A temporary license fee shall be seven hundred fifteen dollars ($715) and may be decreased to no less than five hundred fifty dollars ($550).(3) The annual renewal fee for a nonresident wholesaler license or third-party logistics provider license issued pursuant to Section 4161 shall be seven hundred eighty dollars ($780) and may be increased to eight hundred twenty dollars ($820).(k) The fee for evaluation of continuing education courses for accreditation shall be set by the board at an amount not to exceed forty dollars ($40) per course hour.(l) The fee for an intern pharmacist license shall be one hundred sixty-five dollars ($165) and may be increased to two hundred thirty dollars ($230). The fee for transfer of intern hours or verification of licensure to another state shall be twenty-five dollars ($25) and may be increased to thirty dollars ($30).(m) The board may waive or refund the additional fee for the issuance of a license where the license is issued less than 45 days before the next regular renewal date.(n) The fee for the reissuance of any license, or renewal thereof, that has been lost or destroyed or reissued due to a name change shall be thirty-five dollars ($35) and may be increased to forty-five dollars ($45).(o) The fee for the reissuance of any license, or renewal thereof, that must be reissued because of a change in the information, shall be one hundred dollars ($100) and may be increased to one hundred thirty dollars ($130).(p) It is the intent of the Legislature that, in setting fees pursuant to this section, the board shall seek to maintain a reserve in the Pharmacy Board Contingent Fund equal to approximately one years operating expenditures.(q) The fee for any applicant for a nongovernmental clinic license shall be five hundred twenty dollars ($520) for each license and may be increased to five hundred seventy dollars ($570). The annual fee for renewal of the license shall be three hundred twenty-five dollars ($325) for each license and may be increased to three hundred sixty dollars ($360).(r) The fee for the issuance of a pharmacy technician license shall be one hundred forty dollars ($140) and may be increased to one hundred ninety-five dollars ($195). The fee for renewal of a pharmacy technician license shall be one hundred forty dollars ($140) and may be increased to one hundred ninety-five dollars ($195).(s) The fee for a veterinary food-animal drug retailer license shall be four hundred thirty-five dollars ($435) and may be increased to six hundred ten dollars ($610). The annual renewal fee for a veterinary food-animal drug retailer license shall be three hundred thirty dollars ($330) and may be increased to four hundred sixty dollars ($460).(t) The fee for issuance of a retired license pursuant to Section 4200.5 shall be thirty-five dollars ($35) and may be increased to forty-five dollars ($45).(u) The fee for issuance of a nongovernmental sterile compounding pharmacy license shall be one thousand six hundred forty-five dollars ($1,645) and may be increased to two thousand three hundred five dollars ($2,305). The fee for a temporary license shall be five hundred fifty dollars ($550) and may be increased to seven hundred fifteen dollars ($715). The annual renewal fee of the license shall be one thousand three hundred twenty-five dollars ($1,325) and may be increased to one thousand eight hundred fifty-five dollars ($1,855).(v) The fee for the issuance of a nonresident sterile compounding pharmacy license shall be two thousand three hundred eighty dollars ($2,380) and may be increased to three thousand three hundred thirty-five dollars ($3,335). The annual renewal of the license shall be two thousand two hundred seventy dollars ($2,270) and may be increased to three thousand one hundred eighty dollars ($3,180). In addition to paying that application fee, the nonresident sterile compounding pharmacy shall deposit, when submitting the application, a reasonable amount, as determined by the board, necessary to cover the boards estimated cost of performing the inspection required by Section 4127.2. If the required deposit is not submitted with the application, the application shall be deemed to be incomplete. If the actual cost of the inspection exceeds the amount deposited, the board shall provide to the applicant a written invoice for the remaining amount and shall not take action on the application until the full amount has been paid to the board. If the amount deposited exceeds the amount of actual and necessary costs incurred, the board shall remit the difference to the applicant.(w) The fee for the issuance of an outsourcing facility license shall be two thousand two hundred seventy dollars ($2,270) and may be increased to up to three thousand one hundred eighty dollars ($3,180) by the board. The fee for the renewal of an outsourcing facility license shall be one thousand three hundred twenty-five dollars ($1,325) and may be increased to up to one thousand eight hundred fifty-five dollars ($1,855) by the board. The fee for a temporary outsourcing facility license shall be seven hundred fifteen dollars ($715).(x) The fee for the issuance of a nonresident outsourcing facility license shall be two thousand three hundred eighty dollars ($2,380) and may be increased to up to three thousand three hundred thirty-five dollars ($3,335) by the board. The fee for the renewal of a nonresident outsourcing facility license shall be two thousand two hundred seventy dollars ($2,270) and may be increased to up to three thousand one hundred eighty dollars ($3,180) by the board. In addition to paying that application fee, the nonresident outsourcing facility shall deposit, when submitting the application, a reasonable amount, as determined by the board, necessary to cover the boards estimated cost of performing the inspection required by Section 4129.2. If the required deposit is not submitted with the application, the application shall be deemed to be incomplete. If the actual cost of the inspection exceeds the amount deposited, the board shall provide to the applicant a written invoice for the remaining amount and shall not take action on the application until the full amount has been paid to the board. If the amount deposited exceeds the amount of actual and necessary costs incurred, the board shall remit the difference to the applicant.(y) The fee for the issuance of a centralized hospital packaging license shall be eight hundred twenty dollars ($820) and may be increased to one thousand one hundred fifty dollars ($1,150). The annual renewal of the license shall be eight hundred five dollars ($805) and may be increased to one thousand one hundred twenty-five dollars ($1,125).(z)(1)The application fee for a pharmacy benefits manager representative license shall be ___ dollars ($___) and may be decreased to no less than ___ dollars ($___).(2)(z) (1) The application fee for a pharmacy benefit manager license shall be ___ dollars ($___) and may be decreased to no less than ___ dollars ($___).(3)(2) The licensure fee imposed under this subdivision shall not exceed the actual administrative costs in administering the provisions relating to the licensure and regulation of those licensees.(aa)This section shall become operative on July 1, 2017.SEC. 8.SEC. 6. Article 25 (commencing with Section 4427) is added to Chapter 9 of Division 2 of the Business and Professions Code, to read: Article 25. Pharmacy Benefit Managers4427. (a) (1) A person or entity shall not act as pharmacy benefit manager for any dangerous drug or dangerous device unless he, she, or it has obtained a license from the board.(2) (A) A pharmacy benefit manager shall disclose to the board the location, names, and titles of all of the following:(i) Its agent for service of process in this state.(ii) All pharmacists of the pharmacy benefit manager who are dispensing controlled substances, dangerous drugs, or dangerous devices to residents of this state.(iii)The designated pharmacy benefits management representative by location.(B) This information shall be made disclosed on an annual basis and within 30 days after any change of office, corporate officer, partner, or pharmacist.(b) Upon approval by the board and the payment of the required fee, the board shall issue a license to the applicant.(c)(1)Each place of business of a pharmacy benefit manager in California shall be supervised and managed by a designated pharmacy benefits management representative. The designated pharmacy benefits management representative shall be responsible for the pharmacy benefit managers compliance with state and federal laws.(2)As part of its initial application for a license, and for each renewal, each pharmacy benefit manager shall, on a form designed by the board, provide identifying information and the California license number for a designated pharmacy benefits management representative or pharmacist proposed to serve as the designated representative-in-charge.(3)The board shall not issue or renew a pharmacy benefit manager license without identification of an approved designated pharmacy benefits management representative.(4)The designated pharmacy benefits management representative shall maintain an active license as a designated pharmacy benefits management representative with the board at all times during which he or she is designated as the designated pharmacy benefits management representative.(d)A pharmacy benefit manager shall notify the board in writing, on a form designed by the board, within 30 days of the date when a designated pharmacy benefits management representative ceases to act as the designated pharmacy benefits management representative, and shall on the same form propose another designated pharmacy benefits management representative or pharmacist to take over as the designated pharmacy benefits management representative.(e)(1)The board may issue a temporary license, upon conditions and for periods of time as the board determines to be in the public interest. A temporary license fee shall be required in an amount established by the board as specified in subdivision (z) of Section 4400.(2)When needed to protect public safety, a temporary license may be issued for a period not to exceed 180 days, subject to terms and conditions that the board deems necessary.(3)If the board determines that a temporary license was issued by mistake or denies the application for a permanent license, the temporary license shall terminate upon either personal service of the notice of termination upon the licenseholder or service by certified mail, return receipt requested, at the licenseholders address of record with the board, whichever occurs first.(4)Neither for purposes of retaining a temporary license, nor for purposes of any disciplinary or license denial proceeding before the board, shall the temporary licenseholder be deemed to have a vested property right or interest in the license.4428.(a)A pharmacy benefit manager shall provide the information described in this section to the board, on an annual basis covering the contract year and in such form and manner as the board shall specify:(1)For California residents whose prescription drug benefit is managed by the pharmacy benefit manager, the percentage of all oral prescriptions and self-administered drugs that were dispensed through pharmacies affiliated with the pharmacy benefit manager and the percentage of oral and self-administered drugs dispensed through retail pharmacies.(2)The aggregate amount of discounts or price concessions (excluding bona fide service fees, which include, but are not limited to, distribution service fees, inventory management fees, product stocking allowances, and fees associated with administrative services agreements and patient care programs (such as medication compliance programs and patient education programs)) that the pharmacy benefit manager received from manufacturers of prescription drugs that were attributable to utilization by California residents whose prescription drug benefit was managed by a pharmacy benefit manager.(3)The aggregate amount, and the type of rebates, discounts, or price concessions (excluding bona fide services, which include, but are not limited to, distribution service fees, inventory management fees, product stocking allowances, and fees associated with administrative service agreements and patient care programs (such as medication compliance programs and patient education programs)) provided to health care service plans, as defined in subdivision (f) of Section 1345 of the Health and Safety Code, and health insurers, as defined in subdivision (b) of Section 106 of the Insurance Code, and that are attributable to patient utilization under the plan, and the aggregate amount of the rebates, discounts, or price concessions that are passed through to enrollees and the total number of prescriptions dispensed.(b)The board shall make the information provided by pharmacy benefit managers in subdivision (a) available as part of its annual report.4429.4428. The board has the authority to enforce the provisions of this article, including the authority to adopt, amend, or repeal any rules and regulations, not inconsistent with the laws of this state, as may be necessary for the protection of the public and to implement this article.4429. This article shall not apply to the following:(a) A health care service plan or health insurer, if the health care service plan or health insurer offers or provides pharmacy benefit management services and if those services are offered or provided only to enrollees, subscribers, policyholders, or insureds who are also covered by health benefits offered or provided by that health care service plan or health insurer.(b) An affiliate, subsidiary, related entity or contracted medical groups of a health care service plan or health insurer that would otherwise qualify as a pharmacy benefit manager but offers or provides services only to enrollees, subscribers, policyholders, or insureds who are also covered by health benefits offered or provided by the health care service plan or health insurer.SEC. 7. Section 4430 of the Business and Professions Code is amended to read:4430. For purposes of this chapter, the following definitions shall apply:(a) Carrier means a health care service plan, as defined in Section 1345 of the Health and Safety Code, or a health insurer that issues policies of health insurance, as defined in Section 106 of the Insurance Code.(b) Clerical or recordkeeping error includes a typographical error, scriveners error, or computer error in a required document or record.(c) Extrapolation means the practice of inferring a frequency or dollar amount of overpayments, underpayments, nonvalid claims, or other errors on any portion of claims submitted, based on the frequency or dollar amount of overpayments, underpayments, nonvalid claims, or other errors actually measured in a sample of claims.(d) Health benefit plan means any plan or program that provides, arranges, pays for, or reimburses the cost of health benefits. Health benefit plan includes, but is not limited to, a health care service plan contract issued by a health care service plan, as defined in Section 1345 of the Health and Safety Code, and a policy of health insurance, as defined in Section 106 of the Insurance Code, issued by a health insurer.(e) Maximum allowable cost means the maximum amount that a pharmacy benefit manager will reimburse a pharmacy for the cost of a drug.(f) Maximum allowable cost list means a list of drugs for which a maximum allowable cost has been established by a pharmacy benefit manager.(g) Obsolete means a drug that may be listed in national drug pricing compendia but is no longer available to be dispensed based on the expiration date of the last lot manufactured.(h) Pharmacy has the same meaning as provided in Section 4037.(i) Pharmacy audit means an audit, either onsite or remotely, of any records of a pharmacy conducted by or on behalf of a carrier or a pharmacy benefits manager, or a representative thereof, for prescription drugs that were dispensed by that pharmacy to beneficiaries of a health benefit plan pursuant to a contract with the health benefit plan or the issuer or administrator thereof. Pharmacy audit does not include a concurrent review or desk audit that occurs within three business days of transmission of a claim, or a concurrent review or desk audit if a chargeback or recoupment is not demanded.(j) Pharmacy benefit manager means a person, business, or other entity that, pursuant to a contract or under an employment relationship with a carrier, health benefit plan sponsor, or other third-party payer, either directly or through an intermediary, manages the prescription drug coverage provided by the carrier, plan sponsor, or other third-party payer, including, but not limited to, the processing and payment of claims for prescription drugs, the performance of drug utilization review, the processing of drug prior authorization requests, the adjudication of appeals or grievances related to prescription drug coverage, contracting with network pharmacies, and controlling the cost of covered prescription drugs. described in Section 4037.5.SEC. 8. Chapter 9.6 (commencing with Section 4445) is added to Division 2 of the Business and Professions Code, to read: CHAPTER 9.6. Pharmacy Benefit Management4445. For the purposes of this chapter, the following definitions shall apply:(a) Labeler means a person or entity that receives prescription drugs from a manufacturer or wholesaler and repackages those drugs for later retail sale and who has a labeler code from the federal Food and Drug Administration under Section 207.20 of Title 21 of the Code of Federal Regulations.(b) Pharmacy benefit manager means a person, business, or entity described in Section 4037.5.(c) Proprietary information means trade secrets and information on pricing, costs, revenue, taxes, market share, negotiating strategies, customers, and personnel that is held by a private entity and used for that entitys business purposes.(d) Purchaser means health benefit plan sponsor or other third-party payer with whom a pharmacy benefit manager contracts to provide the administration and management of prescription drug benefits.4446. A pharmacy benefit manager has a fiduciary duty to a purchaser and shall discharge that duty in accordance with all applicable laws.4447. A pharmacy benefit manager shall notify a purchaser in writing of any activity, policy, or practice of the pharmacy benefit manager that directly or indirectly presents a conflict of interest that interferes with the discharge of the pharmacy benefit managers fiduciary duty to the purchaser.4448. (a) Beginning in the second fiscal quarter after the effective date of a contract between a pharmacy benefit manager and a purchaser, the pharmacy benefit manager shall, on a monthly basis, disclose the following information to the purchaser with respect to prescription product benefits specific to the purchaser:(1) The aggregate acquisition cost from a pharmaceutical manufacturer or labeler for each therapeutic class of drugs.(2) The aggregate amount of rebates received by the pharmacy benefit manager for each therapeutic class of drugs. The aggregate amount of rebates shall include any utilization discounts the pharmacy benefit manager receives from a pharmaceutical manufacturer or labeler.(3) Any administrative fees received from a pharmaceutical manufacturer or labeler.(4) The aggregate of rates negotiated by the pharmacy benefit manager with pharmacies with respect to each therapeutic class of drug.(5) Prescription drug utilization information for the purchasers enrollees or insureds that is not specific to any individual enrollee or insured.(b) The information disclosed pursuant to subdivision (a) shall include all retail, mail order, specialty, and compounded prescription products.(c) For the purposes of subdivision (a), a therapeutic class shall include at least two drugs. If there are fewer than two drugs in a therapeutic class, the information required by subdivision (a) shall be reported by therapeutic category.4449. Except for utilization information, a pharmacy benefit manager need not make the disclosures required by Section 4448 unless and until the purchaser agrees, in writing, to maintain as confidential any proprietary information.4450. This article shall apply to a contract or a contractual relationship between a pharmacy benefit manager and a purchaser that is entered into, issued, amended, renewed, or delivered on or after January 1, 2018.4451. This article shall not apply to the following:(a) A health care service plan or health insurer, if the health care service plan or health insurer offers or provides pharmacy benefit management services and if those services are offered or provided only to enrollees, subscribers, policyholders, or insureds who are also covered by health benefits offered or provided by that health care service plan or health insurer.(b) An affiliate, subsidiary, related entity, or contracted medical groups of a health care service plan or health insurer that would otherwise qualify as a pharmacy benefit manager but offers or provides services only to enrollees, subscribers, policyholders, or insureds who are also covered by health benefits offered or provided by the health care service plan or health insurer.SEC. 9. No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.
The people of the State of California do enact as follows:
## The people of the State of California do enact as follows:
(a)Pharmacy benefit managers (PBMs) were formed over 40 years ago to assist insurers and employers in managing prescription drug benefits for employees and insureds. PBMs are used by many health plans, self-insured employers, and government payers to deliver medications to their beneficiaries. The three largest PBMs provide prescription drug coverage to more than 200 million Americans or roughly 78 percent of Americans whose pharmacy benefits are managed by a PBM.
(b)According to a Kaiser Family Foundation publication, PBMs have evolved from basic claims administrators to more complex organizations offering a wide range of prescription drug managed tools, such as drug utilization review, disease management, and consultative services. PBMs can also assist clients with establishing their benefit structure, including developing and maintaining a prescription drug formulary, developing a network of pharmacy providers, and providing mail order fulfillment services. PBMs may achieve savings for their customers by negotiating discounts with drug manufacturers and through cost containment programs, including use of formularies and cost sharing. PBMs were effective in negotiating prices that initially reduced prescription drug prices, and held those costs in check.
(c)In recent years, there have been concerns raised regarding the value of PBMs. Consumer advocates argue manufacturer rebate money causes PBMs to favor more costly brand-name drugs over generic or lower-cost, therapeutically equivalent brand-name drugs and that the business practices of PBMs generally lack transparency.
(d)Additionally, mergers between PBMs and pharmaceutical manufacturers and large pharmacy chains have also occurred. Concerns of potential conflict of interest, inhibiting competition in the dispensing of prescription drugs, actual increased out-of-pocket costs for consumers, and denying consumer choice, and whether employers and insurers have received a reasonable and fair share of the discounts and other price concessions PMBs negotiated on their behalf, are some of the biggest concerns.
(e)States like Arkansas, Georgia, Iowa, Kansas, Mississippi, North Dakota, South Dakota, Vermont, and Washington have enacted laws to regulate the practice of PBMs.
(f)Currently, PBMs in California are unregulated. This lack of oversight coupled with a lack of transparency regarding business operations has generated numerous questions. In order to address questions that have been raised about whether the industry fully discloses how much it is actually saving insurer and employer clients and what portion of those savings are actually passed along to consumers, the Legislature needs to address this issue through the regulation of PBMs.
SEC. 2.SECTION 1. Section 4037.5 is added to the Business and Professions Code, to read:4037.5. (a)Pharmacy benefit manager means a person, business, or other entity that, pursuant to a contract or under an employment relationship with a carrier, health benefit plan sponsor, or other third-party payer, either directly or through an intermediary, manages the prescription drug coverage provided by the carrier, plan sponsor, or other third-party payer, including, but not limited to, the processing and payment of claims for prescription drugs, the performance of drug utilization review, the processing of drug prior authorization requests, the adjudication of appeals or grievances related to prescription drug coverage, contracting with network pharmacies, and controlling the cost of covered prescription drugs.(b)Pharmacy benefit manager shall not include a nonprofit, tax-exempt California licensed health plan that contracts with no more than two medical groups in the state, or to its affiliated entities, or any information exchanged pursuant to their contracts with organizations to administer their pharmacy benefits and services.
SEC. 2.SECTION 1. Section 4037.5 is added to the Business and Professions Code, to read:
### SEC. 2.SECTION 1.
4037.5. (a)Pharmacy benefit manager means a person, business, or other entity that, pursuant to a contract or under an employment relationship with a carrier, health benefit plan sponsor, or other third-party payer, either directly or through an intermediary, manages the prescription drug coverage provided by the carrier, plan sponsor, or other third-party payer, including, but not limited to, the processing and payment of claims for prescription drugs, the performance of drug utilization review, the processing of drug prior authorization requests, the adjudication of appeals or grievances related to prescription drug coverage, contracting with network pharmacies, and controlling the cost of covered prescription drugs.(b)Pharmacy benefit manager shall not include a nonprofit, tax-exempt California licensed health plan that contracts with no more than two medical groups in the state, or to its affiliated entities, or any information exchanged pursuant to their contracts with organizations to administer their pharmacy benefits and services.
4037.5. (a)Pharmacy benefit manager means a person, business, or other entity that, pursuant to a contract or under an employment relationship with a carrier, health benefit plan sponsor, or other third-party payer, either directly or through an intermediary, manages the prescription drug coverage provided by the carrier, plan sponsor, or other third-party payer, including, but not limited to, the processing and payment of claims for prescription drugs, the performance of drug utilization review, the processing of drug prior authorization requests, the adjudication of appeals or grievances related to prescription drug coverage, contracting with network pharmacies, and controlling the cost of covered prescription drugs.(b)Pharmacy benefit manager shall not include a nonprofit, tax-exempt California licensed health plan that contracts with no more than two medical groups in the state, or to its affiliated entities, or any information exchanged pursuant to their contracts with organizations to administer their pharmacy benefits and services.
4037.5. (a)Pharmacy benefit manager means a person, business, or other entity that, pursuant to a contract or under an employment relationship with a carrier, health benefit plan sponsor, or other third-party payer, either directly or through an intermediary, manages the prescription drug coverage provided by the carrier, plan sponsor, or other third-party payer, including, but not limited to, the processing and payment of claims for prescription drugs, the performance of drug utilization review, the processing of drug prior authorization requests, the adjudication of appeals or grievances related to prescription drug coverage, contracting with network pharmacies, and controlling the cost of covered prescription drugs.(b)Pharmacy benefit manager shall not include a nonprofit, tax-exempt California licensed health plan that contracts with no more than two medical groups in the state, or to its affiliated entities, or any information exchanged pursuant to their contracts with organizations to administer their pharmacy benefits and services.
4037.5. (a)Pharmacy benefit manager means a person, business, or other entity that, pursuant to a contract or under an employment relationship with a carrier, health benefit plan sponsor, or other third-party payer, either directly or through an intermediary, manages the prescription drug coverage provided by the carrier, plan sponsor, or other third-party payer, including, but not limited to, the processing and payment of claims for prescription drugs, the performance of drug utilization review, the processing of drug prior authorization requests, the adjudication of appeals or grievances related to prescription drug coverage, contracting with network pharmacies, and controlling the cost of covered prescription drugs.
(b)Pharmacy benefit manager shall not include a nonprofit, tax-exempt California licensed health plan that contracts with no more than two medical groups in the state, or to its affiliated entities, or any information exchanged pursuant to their contracts with organizations to administer their pharmacy benefits and services.
(a)Notwithstanding Section 4051, the board shall issue a license to a pharmacist or a qualified individual as a designated pharmacy benefits manager representative to provide sufficient and qualified supervision of a pharmacy benefit manager. Each pharmacy benefit manager shall designate a pharmacy benefits manager representative to protect the public health and safety in the handling, storage, warehousing, distribution, and shipment of dangerous drugs and dangerous devices for each of the pharmacy benefit managers premises.
(b)An individual who is at least 18 years of age may apply for a designated pharmacy benefits manager representative license. In order to obtain and maintain that license, the individual shall meet all of the following requirements:
(1)He or she shall be a high school graduate or possess a General Education Development certificate equivalent.
(2)He or she shall meet one of the following requirements:
(A)Have a minimum of one year of paid work experience in the past three years with a pharmacy benefit manager.
(B)Have a minimum of one year of paid work experience in the past three years in a licensed pharmacy, or with a drug wholesaler, drug distributor, or drug manufacturer, performing duties related to the distribution or dispensing of dangerous drugs or dangerous devices.
(3)(A)He or she shall complete a training program approved by the board that, at a minimum, addresses each of the following subjects:
(i)Knowledge and understanding of California law and federal law relating to the distribution of dangerous drugs and dangerous devices.
(ii)Knowledge and understanding of California law and federal law relating to the distribution of controlled substances.
(iii)Knowledge and understanding of quality control systems.
(iv)Knowledge and understanding of the United States Pharmacopoeia or federal Food and Drug Administration standards relating to the safe storage, handling, and transport of dangerous drugs and dangerous devices.
(B)The board may, by regulation, require the training program required under this paragraph to include additional material.
(C)The board shall not issue a license as a designated pharmacy benefits manager representative until the applicant provides proof of completion of the training required by this paragraph to the board.
(c)A pharmacy benefit manager shall not operate without at least one designated pharmacy benefits manager representative present at each of its licensed places of business.
(d)A pharmacist licensed in California and fulfilling the duties of a designated pharmacy benefits manager representative as specified in subdivision (a) shall not be required to obtain a separate license as a designated pharmacy benefits manager representative.
SEC. 4.SEC. 2. Section 4100 of the Business and Professions Code is amended to read:4100. Within 30 days after changing his or her address of record with the board or after changing his or her name a change of address of record with the board or a change of name according to law, a pharmacist, intern pharmacist, technician, designated representative, or designated pharmacy benefits manager representative pharmacy benefit manager shall notify the executive officer of the board of the change of address or change of name.
SEC. 4.SEC. 2. Section 4100 of the Business and Professions Code is amended to read:
### SEC. 4.SEC. 2.
4100. Within 30 days after changing his or her address of record with the board or after changing his or her name a change of address of record with the board or a change of name according to law, a pharmacist, intern pharmacist, technician, designated representative, or designated pharmacy benefits manager representative pharmacy benefit manager shall notify the executive officer of the board of the change of address or change of name.
4100. Within 30 days after changing his or her address of record with the board or after changing his or her name a change of address of record with the board or a change of name according to law, a pharmacist, intern pharmacist, technician, designated representative, or designated pharmacy benefits manager representative pharmacy benefit manager shall notify the executive officer of the board of the change of address or change of name.
4100. Within 30 days after changing his or her address of record with the board or after changing his or her name a change of address of record with the board or a change of name according to law, a pharmacist, intern pharmacist, technician, designated representative, or designated pharmacy benefits manager representative pharmacy benefit manager shall notify the executive officer of the board of the change of address or change of name.
4100. Within 30 days after changing his or her address of record with the board or after changing his or her name a change of address of record with the board or a change of name according to law, a pharmacist, intern pharmacist, technician, designated representative, or designated pharmacy benefits manager representative pharmacy benefit manager shall notify the executive officer of the board of the change of address or change of name.
SEC. 5.SEC. 3. Section 4107.5 of the Business and Professions Code is amended to read:4107.5. If a manufacturer, wholesaler, third-party logistics provider, pharmacy benefit manager, or pharmacy has reasonable cause to believe that a dangerous drug or dangerous device in, or having been in, its possession is counterfeit or the subject of a fraudulent transaction, the manufacturer, wholesaler, third-party logistics provider, pharmacy benefit manager, or pharmacy shall notify the board within 72 hours of obtaining that knowledge. This section shall apply to any dangerous drug or dangerous device that has been sold or distributed in or through this state.
SEC. 5.SEC. 3. Section 4107.5 of the Business and Professions Code is amended to read:
### SEC. 5.SEC. 3.
4107.5. If a manufacturer, wholesaler, third-party logistics provider, pharmacy benefit manager, or pharmacy has reasonable cause to believe that a dangerous drug or dangerous device in, or having been in, its possession is counterfeit or the subject of a fraudulent transaction, the manufacturer, wholesaler, third-party logistics provider, pharmacy benefit manager, or pharmacy shall notify the board within 72 hours of obtaining that knowledge. This section shall apply to any dangerous drug or dangerous device that has been sold or distributed in or through this state.
4107.5. If a manufacturer, wholesaler, third-party logistics provider, pharmacy benefit manager, or pharmacy has reasonable cause to believe that a dangerous drug or dangerous device in, or having been in, its possession is counterfeit or the subject of a fraudulent transaction, the manufacturer, wholesaler, third-party logistics provider, pharmacy benefit manager, or pharmacy shall notify the board within 72 hours of obtaining that knowledge. This section shall apply to any dangerous drug or dangerous device that has been sold or distributed in or through this state.
4107.5. If a manufacturer, wholesaler, third-party logistics provider, pharmacy benefit manager, or pharmacy has reasonable cause to believe that a dangerous drug or dangerous device in, or having been in, its possession is counterfeit or the subject of a fraudulent transaction, the manufacturer, wholesaler, third-party logistics provider, pharmacy benefit manager, or pharmacy shall notify the board within 72 hours of obtaining that knowledge. This section shall apply to any dangerous drug or dangerous device that has been sold or distributed in or through this state.
4107.5. If a manufacturer, wholesaler, third-party logistics provider, pharmacy benefit manager, or pharmacy has reasonable cause to believe that a dangerous drug or dangerous device in, or having been in, its possession is counterfeit or the subject of a fraudulent transaction, the manufacturer, wholesaler, third-party logistics provider, pharmacy benefit manager, or pharmacy shall notify the board within 72 hours of obtaining that knowledge. This section shall apply to any dangerous drug or dangerous device that has been sold or distributed in or through this state.
SEC. 6.SEC. 4. Section 4201 of the Business and Professions Code is amended to read:4201. (a) Each application to conduct a pharmacy, pharmacy benefit manager, wholesaler, third-party logistics provider, veterinary food-animal drug retailer, or outsourcing facility shall be made on a form furnished by the board and shall state the name, address, usual occupation, and professional qualifications, if any, of the applicant. If the applicant is other than a natural person, the application shall state the information as to each person beneficially interested therein or any person with management or control over the license.(b) As used in this section, and subject to subdivision (c), the term person beneficially interested means and includes:(1) If the applicant is a partnership or other unincorporated association, each partner or member.(2) If the applicant is a corporation, each of its officers, directors, and stockholders, provided that a natural person shall not be deemed to be beneficially interested in a nonprofit corporation.(3) If the applicant is a limited liability company, each officer, manager, or member.(c) If the applicant is a partnership or other unincorporated association, a limited liability company, or a corporation, and the number of partners, members, or stockholders, as the case may be, exceeds five, the application shall so state, and shall further state the information required by subdivision (a) as to each of the five partners, members, or stockholders who own the five largest interests in the applicant entity. Upon request by the executive officer, the applicant shall furnish the board with the information required by subdivision (a) as to partners, members, or stockholders not named in the application, or shall refer the board to an appropriate source of that information.(d) The application shall contain a statement to the effect that the applicant has not been convicted of a felony and has not violated any of the provisions of this chapter. If the applicant cannot make this statement, the application shall contain a statement of the violation, if any, or reasons which will prevent the applicant from being able to comply with the requirements with respect to the statement.(e) Upon the approval of the application by the board and payment of the fee required by this chapter for each pharmacy, pharmacy benefit manager, wholesaler, third-party logistics provider, or veterinary food-animal drug retailer, the executive officer of the board shall issue a license to conduct a pharmacy, wholesaler, third-party logistics provider, veterinary food-animal drug retailer, or outsourcing facility if all of the provisions of this chapter have been complied with.(f) Notwithstanding any other law, the pharmacy license shall authorize the holder to conduct a pharmacy. The license shall be renewed annually and shall not be transferable.(g) Notwithstanding any other law, the pharmacy benefit manager license shall authorize the holder to conduct business as a pharmacy benefit manager as defined in Section 4037.5. The license shall be renewed annually and shall not be transferable.(h) Notwithstanding any other law, the wholesaler license shall authorize the holder to wholesale dangerous drugs and dangerous devices. The license shall be renewed annually and shall not be transferable.(i) Notwithstanding any other law, the third-party logistics provider license shall authorize the holder to provide or coordinate warehousing, distribution, or other similar services of dangerous drugs and dangerous devices. The license shall be renewed annually and shall not be transferable.(j) Notwithstanding any other law, the veterinary food-animal drug retailer license shall authorize the holder to conduct a veterinary food-animal drug retailer and to sell and dispense veterinary food-animal drugs as defined in Section 4042.(k) For licenses referred to in subdivisions (f), (g), (h), (i), and (j), any change in the proposed beneficial ownership interest shall be reported to the board within 30 days thereafter upon a form to be furnished by the board.
SEC. 6.SEC. 4. Section 4201 of the Business and Professions Code is amended to read:
### SEC. 6.SEC. 4.
4201. (a) Each application to conduct a pharmacy, pharmacy benefit manager, wholesaler, third-party logistics provider, veterinary food-animal drug retailer, or outsourcing facility shall be made on a form furnished by the board and shall state the name, address, usual occupation, and professional qualifications, if any, of the applicant. If the applicant is other than a natural person, the application shall state the information as to each person beneficially interested therein or any person with management or control over the license.(b) As used in this section, and subject to subdivision (c), the term person beneficially interested means and includes:(1) If the applicant is a partnership or other unincorporated association, each partner or member.(2) If the applicant is a corporation, each of its officers, directors, and stockholders, provided that a natural person shall not be deemed to be beneficially interested in a nonprofit corporation.(3) If the applicant is a limited liability company, each officer, manager, or member.(c) If the applicant is a partnership or other unincorporated association, a limited liability company, or a corporation, and the number of partners, members, or stockholders, as the case may be, exceeds five, the application shall so state, and shall further state the information required by subdivision (a) as to each of the five partners, members, or stockholders who own the five largest interests in the applicant entity. Upon request by the executive officer, the applicant shall furnish the board with the information required by subdivision (a) as to partners, members, or stockholders not named in the application, or shall refer the board to an appropriate source of that information.(d) The application shall contain a statement to the effect that the applicant has not been convicted of a felony and has not violated any of the provisions of this chapter. If the applicant cannot make this statement, the application shall contain a statement of the violation, if any, or reasons which will prevent the applicant from being able to comply with the requirements with respect to the statement.(e) Upon the approval of the application by the board and payment of the fee required by this chapter for each pharmacy, pharmacy benefit manager, wholesaler, third-party logistics provider, or veterinary food-animal drug retailer, the executive officer of the board shall issue a license to conduct a pharmacy, wholesaler, third-party logistics provider, veterinary food-animal drug retailer, or outsourcing facility if all of the provisions of this chapter have been complied with.(f) Notwithstanding any other law, the pharmacy license shall authorize the holder to conduct a pharmacy. The license shall be renewed annually and shall not be transferable.(g) Notwithstanding any other law, the pharmacy benefit manager license shall authorize the holder to conduct business as a pharmacy benefit manager as defined in Section 4037.5. The license shall be renewed annually and shall not be transferable.(h) Notwithstanding any other law, the wholesaler license shall authorize the holder to wholesale dangerous drugs and dangerous devices. The license shall be renewed annually and shall not be transferable.(i) Notwithstanding any other law, the third-party logistics provider license shall authorize the holder to provide or coordinate warehousing, distribution, or other similar services of dangerous drugs and dangerous devices. The license shall be renewed annually and shall not be transferable.(j) Notwithstanding any other law, the veterinary food-animal drug retailer license shall authorize the holder to conduct a veterinary food-animal drug retailer and to sell and dispense veterinary food-animal drugs as defined in Section 4042.(k) For licenses referred to in subdivisions (f), (g), (h), (i), and (j), any change in the proposed beneficial ownership interest shall be reported to the board within 30 days thereafter upon a form to be furnished by the board.
4201. (a) Each application to conduct a pharmacy, pharmacy benefit manager, wholesaler, third-party logistics provider, veterinary food-animal drug retailer, or outsourcing facility shall be made on a form furnished by the board and shall state the name, address, usual occupation, and professional qualifications, if any, of the applicant. If the applicant is other than a natural person, the application shall state the information as to each person beneficially interested therein or any person with management or control over the license.(b) As used in this section, and subject to subdivision (c), the term person beneficially interested means and includes:(1) If the applicant is a partnership or other unincorporated association, each partner or member.(2) If the applicant is a corporation, each of its officers, directors, and stockholders, provided that a natural person shall not be deemed to be beneficially interested in a nonprofit corporation.(3) If the applicant is a limited liability company, each officer, manager, or member.(c) If the applicant is a partnership or other unincorporated association, a limited liability company, or a corporation, and the number of partners, members, or stockholders, as the case may be, exceeds five, the application shall so state, and shall further state the information required by subdivision (a) as to each of the five partners, members, or stockholders who own the five largest interests in the applicant entity. Upon request by the executive officer, the applicant shall furnish the board with the information required by subdivision (a) as to partners, members, or stockholders not named in the application, or shall refer the board to an appropriate source of that information.(d) The application shall contain a statement to the effect that the applicant has not been convicted of a felony and has not violated any of the provisions of this chapter. If the applicant cannot make this statement, the application shall contain a statement of the violation, if any, or reasons which will prevent the applicant from being able to comply with the requirements with respect to the statement.(e) Upon the approval of the application by the board and payment of the fee required by this chapter for each pharmacy, pharmacy benefit manager, wholesaler, third-party logistics provider, or veterinary food-animal drug retailer, the executive officer of the board shall issue a license to conduct a pharmacy, wholesaler, third-party logistics provider, veterinary food-animal drug retailer, or outsourcing facility if all of the provisions of this chapter have been complied with.(f) Notwithstanding any other law, the pharmacy license shall authorize the holder to conduct a pharmacy. The license shall be renewed annually and shall not be transferable.(g) Notwithstanding any other law, the pharmacy benefit manager license shall authorize the holder to conduct business as a pharmacy benefit manager as defined in Section 4037.5. The license shall be renewed annually and shall not be transferable.(h) Notwithstanding any other law, the wholesaler license shall authorize the holder to wholesale dangerous drugs and dangerous devices. The license shall be renewed annually and shall not be transferable.(i) Notwithstanding any other law, the third-party logistics provider license shall authorize the holder to provide or coordinate warehousing, distribution, or other similar services of dangerous drugs and dangerous devices. The license shall be renewed annually and shall not be transferable.(j) Notwithstanding any other law, the veterinary food-animal drug retailer license shall authorize the holder to conduct a veterinary food-animal drug retailer and to sell and dispense veterinary food-animal drugs as defined in Section 4042.(k) For licenses referred to in subdivisions (f), (g), (h), (i), and (j), any change in the proposed beneficial ownership interest shall be reported to the board within 30 days thereafter upon a form to be furnished by the board.
4201. (a) Each application to conduct a pharmacy, pharmacy benefit manager, wholesaler, third-party logistics provider, veterinary food-animal drug retailer, or outsourcing facility shall be made on a form furnished by the board and shall state the name, address, usual occupation, and professional qualifications, if any, of the applicant. If the applicant is other than a natural person, the application shall state the information as to each person beneficially interested therein or any person with management or control over the license.(b) As used in this section, and subject to subdivision (c), the term person beneficially interested means and includes:(1) If the applicant is a partnership or other unincorporated association, each partner or member.(2) If the applicant is a corporation, each of its officers, directors, and stockholders, provided that a natural person shall not be deemed to be beneficially interested in a nonprofit corporation.(3) If the applicant is a limited liability company, each officer, manager, or member.(c) If the applicant is a partnership or other unincorporated association, a limited liability company, or a corporation, and the number of partners, members, or stockholders, as the case may be, exceeds five, the application shall so state, and shall further state the information required by subdivision (a) as to each of the five partners, members, or stockholders who own the five largest interests in the applicant entity. Upon request by the executive officer, the applicant shall furnish the board with the information required by subdivision (a) as to partners, members, or stockholders not named in the application, or shall refer the board to an appropriate source of that information.(d) The application shall contain a statement to the effect that the applicant has not been convicted of a felony and has not violated any of the provisions of this chapter. If the applicant cannot make this statement, the application shall contain a statement of the violation, if any, or reasons which will prevent the applicant from being able to comply with the requirements with respect to the statement.(e) Upon the approval of the application by the board and payment of the fee required by this chapter for each pharmacy, pharmacy benefit manager, wholesaler, third-party logistics provider, or veterinary food-animal drug retailer, the executive officer of the board shall issue a license to conduct a pharmacy, wholesaler, third-party logistics provider, veterinary food-animal drug retailer, or outsourcing facility if all of the provisions of this chapter have been complied with.(f) Notwithstanding any other law, the pharmacy license shall authorize the holder to conduct a pharmacy. The license shall be renewed annually and shall not be transferable.(g) Notwithstanding any other law, the pharmacy benefit manager license shall authorize the holder to conduct business as a pharmacy benefit manager as defined in Section 4037.5. The license shall be renewed annually and shall not be transferable.(h) Notwithstanding any other law, the wholesaler license shall authorize the holder to wholesale dangerous drugs and dangerous devices. The license shall be renewed annually and shall not be transferable.(i) Notwithstanding any other law, the third-party logistics provider license shall authorize the holder to provide or coordinate warehousing, distribution, or other similar services of dangerous drugs and dangerous devices. The license shall be renewed annually and shall not be transferable.(j) Notwithstanding any other law, the veterinary food-animal drug retailer license shall authorize the holder to conduct a veterinary food-animal drug retailer and to sell and dispense veterinary food-animal drugs as defined in Section 4042.(k) For licenses referred to in subdivisions (f), (g), (h), (i), and (j), any change in the proposed beneficial ownership interest shall be reported to the board within 30 days thereafter upon a form to be furnished by the board.
4201. (a) Each application to conduct a pharmacy, pharmacy benefit manager, wholesaler, third-party logistics provider, veterinary food-animal drug retailer, or outsourcing facility shall be made on a form furnished by the board and shall state the name, address, usual occupation, and professional qualifications, if any, of the applicant. If the applicant is other than a natural person, the application shall state the information as to each person beneficially interested therein or any person with management or control over the license.
(b) As used in this section, and subject to subdivision (c), the term person beneficially interested means and includes:
(1) If the applicant is a partnership or other unincorporated association, each partner or member.
(2) If the applicant is a corporation, each of its officers, directors, and stockholders, provided that a natural person shall not be deemed to be beneficially interested in a nonprofit corporation.
(3) If the applicant is a limited liability company, each officer, manager, or member.
(c) If the applicant is a partnership or other unincorporated association, a limited liability company, or a corporation, and the number of partners, members, or stockholders, as the case may be, exceeds five, the application shall so state, and shall further state the information required by subdivision (a) as to each of the five partners, members, or stockholders who own the five largest interests in the applicant entity. Upon request by the executive officer, the applicant shall furnish the board with the information required by subdivision (a) as to partners, members, or stockholders not named in the application, or shall refer the board to an appropriate source of that information.
(d) The application shall contain a statement to the effect that the applicant has not been convicted of a felony and has not violated any of the provisions of this chapter. If the applicant cannot make this statement, the application shall contain a statement of the violation, if any, or reasons which will prevent the applicant from being able to comply with the requirements with respect to the statement.
(e) Upon the approval of the application by the board and payment of the fee required by this chapter for each pharmacy, pharmacy benefit manager, wholesaler, third-party logistics provider, or veterinary food-animal drug retailer, the executive officer of the board shall issue a license to conduct a pharmacy, wholesaler, third-party logistics provider, veterinary food-animal drug retailer, or outsourcing facility if all of the provisions of this chapter have been complied with.
(f) Notwithstanding any other law, the pharmacy license shall authorize the holder to conduct a pharmacy. The license shall be renewed annually and shall not be transferable.
(g) Notwithstanding any other law, the pharmacy benefit manager license shall authorize the holder to conduct business as a pharmacy benefit manager as defined in Section 4037.5. The license shall be renewed annually and shall not be transferable.
(h) Notwithstanding any other law, the wholesaler license shall authorize the holder to wholesale dangerous drugs and dangerous devices. The license shall be renewed annually and shall not be transferable.
(i) Notwithstanding any other law, the third-party logistics provider license shall authorize the holder to provide or coordinate warehousing, distribution, or other similar services of dangerous drugs and dangerous devices. The license shall be renewed annually and shall not be transferable.
(j) Notwithstanding any other law, the veterinary food-animal drug retailer license shall authorize the holder to conduct a veterinary food-animal drug retailer and to sell and dispense veterinary food-animal drugs as defined in Section 4042.
(k) For licenses referred to in subdivisions (f), (g), (h), (i), and (j), any change in the proposed beneficial ownership interest shall be reported to the board within 30 days thereafter upon a form to be furnished by the board.
SEC. 7.SEC. 5. Section 4400 of the Business and Professions Code, as added by Section 26 of Chapter 799 of the Statutes of 2016, is amended to read:4400. The amount of fees and penalties prescribed by this chapter, except as otherwise provided, is that fixed by the board according to the following schedule:(a) The fee for a nongovernmental pharmacy license shall be five hundred twenty dollars ($520) and may be increased to five hundred seventy dollars ($570). The fee for the issuance of a temporary nongovernmental pharmacy permit shall be two hundred fifty dollars ($250) and may be increased to three hundred twenty-five dollars ($325).(b) The fee for a nongovernmental pharmacy license annual renewal shall be six hundred sixty-five dollars ($665) and may be increased to nine hundred thirty dollars ($930).(c) The fee for the pharmacist application and examination shall be two hundred sixty dollars ($260) and may be increased to two hundred eighty-five dollars ($285).(d) The fee for regrading an examination shall be ninety dollars ($90) and may be increased to one hundred fifteen dollars ($115). If an error in grading is found and the applicant passes the examination, the regrading fee shall be refunded.(e) The fee for a pharmacist license shall be one hundred ninety-five dollars ($195) and may be increased to two hundred fifteen dollars ($215). The fee for a pharmacist biennial renewal shall be three hundred sixty dollars ($360) and may be increased to five hundred five dollars ($505).(f) The fee for a nongovernmental wholesaler or third-party logistics provider license and annual renewal shall be seven hundred eighty dollars ($780) and may be increased to eight hundred twenty dollars ($820). The application fee for any additional location after licensure of the first 20 locations shall be three hundred dollars ($300) and may be decreased to no less than two hundred twenty-five dollars ($225). A temporary license fee shall be seven hundred fifteen dollars ($715) and may be decreased to no less than five hundred fifty dollars ($550).(g) The fee for a hypodermic license shall be one hundred seventy dollars ($170) and may be increased to two hundred forty dollars ($240). The fee for a hypodermic license renewal shall be two hundred dollars ($200) and may be increased to two hundred eighty dollars ($280).(h) (1) The fee for application, investigation, and issuance of a license as a designated representative pursuant to Section 4053, or as a designated representative-3PL pursuant to Section 4053.1, shall be one hundred fifty dollars ($150) and may be increased to two hundred ten dollars ($210).(2) The fee for the annual renewal of a license as a designated representative or designated representative-3PL shall be two hundred fifteen dollars ($215) and may be increased to three hundred dollars ($300).(i) (1) The fee for the application, investigation, and issuance of a license as a designated representative for a veterinary food-animal drug retailer pursuant to Section 4053 shall be one hundred fifty dollars ($150) and may be increased to two hundred ten dollars ($210).(2) The fee for the annual renewal of a license as a designated representative for a veterinary food-animal drug retailer shall be two hundred fifteen dollars ($215) and may be increased to three hundred dollars ($300).(j) (1) The application fee for a nonresident wholesaler or third-party logistics provider license issued pursuant to Section 4161 shall be seven hundred eighty dollars ($780) and may be increased to eight hundred twenty dollars ($820).(2) For nonresident wholesalers or third-party logistics providers that have 21 or more facilities operating nationwide the application fees for the first 20 locations shall be seven hundred eighty dollars ($780) and may be increased to eight hundred twenty dollars ($820). The application fee for any additional location after licensure of the first 20 locations shall be three hundred dollars ($300) and may be decreased to no less than two hundred twenty-five dollars ($225). A temporary license fee shall be seven hundred fifteen dollars ($715) and may be decreased to no less than five hundred fifty dollars ($550).(3) The annual renewal fee for a nonresident wholesaler license or third-party logistics provider license issued pursuant to Section 4161 shall be seven hundred eighty dollars ($780) and may be increased to eight hundred twenty dollars ($820).(k) The fee for evaluation of continuing education courses for accreditation shall be set by the board at an amount not to exceed forty dollars ($40) per course hour.(l) The fee for an intern pharmacist license shall be one hundred sixty-five dollars ($165) and may be increased to two hundred thirty dollars ($230). The fee for transfer of intern hours or verification of licensure to another state shall be twenty-five dollars ($25) and may be increased to thirty dollars ($30).(m) The board may waive or refund the additional fee for the issuance of a license where the license is issued less than 45 days before the next regular renewal date.(n) The fee for the reissuance of any license, or renewal thereof, that has been lost or destroyed or reissued due to a name change shall be thirty-five dollars ($35) and may be increased to forty-five dollars ($45).(o) The fee for the reissuance of any license, or renewal thereof, that must be reissued because of a change in the information, shall be one hundred dollars ($100) and may be increased to one hundred thirty dollars ($130).(p) It is the intent of the Legislature that, in setting fees pursuant to this section, the board shall seek to maintain a reserve in the Pharmacy Board Contingent Fund equal to approximately one years operating expenditures.(q) The fee for any applicant for a nongovernmental clinic license shall be five hundred twenty dollars ($520) for each license and may be increased to five hundred seventy dollars ($570). The annual fee for renewal of the license shall be three hundred twenty-five dollars ($325) for each license and may be increased to three hundred sixty dollars ($360).(r) The fee for the issuance of a pharmacy technician license shall be one hundred forty dollars ($140) and may be increased to one hundred ninety-five dollars ($195). The fee for renewal of a pharmacy technician license shall be one hundred forty dollars ($140) and may be increased to one hundred ninety-five dollars ($195).(s) The fee for a veterinary food-animal drug retailer license shall be four hundred thirty-five dollars ($435) and may be increased to six hundred ten dollars ($610). The annual renewal fee for a veterinary food-animal drug retailer license shall be three hundred thirty dollars ($330) and may be increased to four hundred sixty dollars ($460).(t) The fee for issuance of a retired license pursuant to Section 4200.5 shall be thirty-five dollars ($35) and may be increased to forty-five dollars ($45).(u) The fee for issuance of a nongovernmental sterile compounding pharmacy license shall be one thousand six hundred forty-five dollars ($1,645) and may be increased to two thousand three hundred five dollars ($2,305). The fee for a temporary license shall be five hundred fifty dollars ($550) and may be increased to seven hundred fifteen dollars ($715). The annual renewal fee of the license shall be one thousand three hundred twenty-five dollars ($1,325) and may be increased to one thousand eight hundred fifty-five dollars ($1,855).(v) The fee for the issuance of a nonresident sterile compounding pharmacy license shall be two thousand three hundred eighty dollars ($2,380) and may be increased to three thousand three hundred thirty-five dollars ($3,335). The annual renewal of the license shall be two thousand two hundred seventy dollars ($2,270) and may be increased to three thousand one hundred eighty dollars ($3,180). In addition to paying that application fee, the nonresident sterile compounding pharmacy shall deposit, when submitting the application, a reasonable amount, as determined by the board, necessary to cover the boards estimated cost of performing the inspection required by Section 4127.2. If the required deposit is not submitted with the application, the application shall be deemed to be incomplete. If the actual cost of the inspection exceeds the amount deposited, the board shall provide to the applicant a written invoice for the remaining amount and shall not take action on the application until the full amount has been paid to the board. If the amount deposited exceeds the amount of actual and necessary costs incurred, the board shall remit the difference to the applicant.(w) The fee for the issuance of an outsourcing facility license shall be two thousand two hundred seventy dollars ($2,270) and may be increased to up to three thousand one hundred eighty dollars ($3,180) by the board. The fee for the renewal of an outsourcing facility license shall be one thousand three hundred twenty-five dollars ($1,325) and may be increased to up to one thousand eight hundred fifty-five dollars ($1,855) by the board. The fee for a temporary outsourcing facility license shall be seven hundred fifteen dollars ($715).(x) The fee for the issuance of a nonresident outsourcing facility license shall be two thousand three hundred eighty dollars ($2,380) and may be increased to up to three thousand three hundred thirty-five dollars ($3,335) by the board. The fee for the renewal of a nonresident outsourcing facility license shall be two thousand two hundred seventy dollars ($2,270) and may be increased to up to three thousand one hundred eighty dollars ($3,180) by the board. In addition to paying that application fee, the nonresident outsourcing facility shall deposit, when submitting the application, a reasonable amount, as determined by the board, necessary to cover the boards estimated cost of performing the inspection required by Section 4129.2. If the required deposit is not submitted with the application, the application shall be deemed to be incomplete. If the actual cost of the inspection exceeds the amount deposited, the board shall provide to the applicant a written invoice for the remaining amount and shall not take action on the application until the full amount has been paid to the board. If the amount deposited exceeds the amount of actual and necessary costs incurred, the board shall remit the difference to the applicant.(y) The fee for the issuance of a centralized hospital packaging license shall be eight hundred twenty dollars ($820) and may be increased to one thousand one hundred fifty dollars ($1,150). The annual renewal of the license shall be eight hundred five dollars ($805) and may be increased to one thousand one hundred twenty-five dollars ($1,125).(z)(1)The application fee for a pharmacy benefits manager representative license shall be ___ dollars ($___) and may be decreased to no less than ___ dollars ($___).(2)(z) (1) The application fee for a pharmacy benefit manager license shall be ___ dollars ($___) and may be decreased to no less than ___ dollars ($___).(3)(2) The licensure fee imposed under this subdivision shall not exceed the actual administrative costs in administering the provisions relating to the licensure and regulation of those licensees.(aa)This section shall become operative on July 1, 2017.
SEC. 7.SEC. 5. Section 4400 of the Business and Professions Code, as added by Section 26 of Chapter 799 of the Statutes of 2016, is amended to read:
### SEC. 7.SEC. 5.
4400. The amount of fees and penalties prescribed by this chapter, except as otherwise provided, is that fixed by the board according to the following schedule:(a) The fee for a nongovernmental pharmacy license shall be five hundred twenty dollars ($520) and may be increased to five hundred seventy dollars ($570). The fee for the issuance of a temporary nongovernmental pharmacy permit shall be two hundred fifty dollars ($250) and may be increased to three hundred twenty-five dollars ($325).(b) The fee for a nongovernmental pharmacy license annual renewal shall be six hundred sixty-five dollars ($665) and may be increased to nine hundred thirty dollars ($930).(c) The fee for the pharmacist application and examination shall be two hundred sixty dollars ($260) and may be increased to two hundred eighty-five dollars ($285).(d) The fee for regrading an examination shall be ninety dollars ($90) and may be increased to one hundred fifteen dollars ($115). If an error in grading is found and the applicant passes the examination, the regrading fee shall be refunded.(e) The fee for a pharmacist license shall be one hundred ninety-five dollars ($195) and may be increased to two hundred fifteen dollars ($215). The fee for a pharmacist biennial renewal shall be three hundred sixty dollars ($360) and may be increased to five hundred five dollars ($505).(f) The fee for a nongovernmental wholesaler or third-party logistics provider license and annual renewal shall be seven hundred eighty dollars ($780) and may be increased to eight hundred twenty dollars ($820). The application fee for any additional location after licensure of the first 20 locations shall be three hundred dollars ($300) and may be decreased to no less than two hundred twenty-five dollars ($225). A temporary license fee shall be seven hundred fifteen dollars ($715) and may be decreased to no less than five hundred fifty dollars ($550).(g) The fee for a hypodermic license shall be one hundred seventy dollars ($170) and may be increased to two hundred forty dollars ($240). The fee for a hypodermic license renewal shall be two hundred dollars ($200) and may be increased to two hundred eighty dollars ($280).(h) (1) The fee for application, investigation, and issuance of a license as a designated representative pursuant to Section 4053, or as a designated representative-3PL pursuant to Section 4053.1, shall be one hundred fifty dollars ($150) and may be increased to two hundred ten dollars ($210).(2) The fee for the annual renewal of a license as a designated representative or designated representative-3PL shall be two hundred fifteen dollars ($215) and may be increased to three hundred dollars ($300).(i) (1) The fee for the application, investigation, and issuance of a license as a designated representative for a veterinary food-animal drug retailer pursuant to Section 4053 shall be one hundred fifty dollars ($150) and may be increased to two hundred ten dollars ($210).(2) The fee for the annual renewal of a license as a designated representative for a veterinary food-animal drug retailer shall be two hundred fifteen dollars ($215) and may be increased to three hundred dollars ($300).(j) (1) The application fee for a nonresident wholesaler or third-party logistics provider license issued pursuant to Section 4161 shall be seven hundred eighty dollars ($780) and may be increased to eight hundred twenty dollars ($820).(2) For nonresident wholesalers or third-party logistics providers that have 21 or more facilities operating nationwide the application fees for the first 20 locations shall be seven hundred eighty dollars ($780) and may be increased to eight hundred twenty dollars ($820). The application fee for any additional location after licensure of the first 20 locations shall be three hundred dollars ($300) and may be decreased to no less than two hundred twenty-five dollars ($225). A temporary license fee shall be seven hundred fifteen dollars ($715) and may be decreased to no less than five hundred fifty dollars ($550).(3) The annual renewal fee for a nonresident wholesaler license or third-party logistics provider license issued pursuant to Section 4161 shall be seven hundred eighty dollars ($780) and may be increased to eight hundred twenty dollars ($820).(k) The fee for evaluation of continuing education courses for accreditation shall be set by the board at an amount not to exceed forty dollars ($40) per course hour.(l) The fee for an intern pharmacist license shall be one hundred sixty-five dollars ($165) and may be increased to two hundred thirty dollars ($230). The fee for transfer of intern hours or verification of licensure to another state shall be twenty-five dollars ($25) and may be increased to thirty dollars ($30).(m) The board may waive or refund the additional fee for the issuance of a license where the license is issued less than 45 days before the next regular renewal date.(n) The fee for the reissuance of any license, or renewal thereof, that has been lost or destroyed or reissued due to a name change shall be thirty-five dollars ($35) and may be increased to forty-five dollars ($45).(o) The fee for the reissuance of any license, or renewal thereof, that must be reissued because of a change in the information, shall be one hundred dollars ($100) and may be increased to one hundred thirty dollars ($130).(p) It is the intent of the Legislature that, in setting fees pursuant to this section, the board shall seek to maintain a reserve in the Pharmacy Board Contingent Fund equal to approximately one years operating expenditures.(q) The fee for any applicant for a nongovernmental clinic license shall be five hundred twenty dollars ($520) for each license and may be increased to five hundred seventy dollars ($570). The annual fee for renewal of the license shall be three hundred twenty-five dollars ($325) for each license and may be increased to three hundred sixty dollars ($360).(r) The fee for the issuance of a pharmacy technician license shall be one hundred forty dollars ($140) and may be increased to one hundred ninety-five dollars ($195). The fee for renewal of a pharmacy technician license shall be one hundred forty dollars ($140) and may be increased to one hundred ninety-five dollars ($195).(s) The fee for a veterinary food-animal drug retailer license shall be four hundred thirty-five dollars ($435) and may be increased to six hundred ten dollars ($610). The annual renewal fee for a veterinary food-animal drug retailer license shall be three hundred thirty dollars ($330) and may be increased to four hundred sixty dollars ($460).(t) The fee for issuance of a retired license pursuant to Section 4200.5 shall be thirty-five dollars ($35) and may be increased to forty-five dollars ($45).(u) The fee for issuance of a nongovernmental sterile compounding pharmacy license shall be one thousand six hundred forty-five dollars ($1,645) and may be increased to two thousand three hundred five dollars ($2,305). The fee for a temporary license shall be five hundred fifty dollars ($550) and may be increased to seven hundred fifteen dollars ($715). The annual renewal fee of the license shall be one thousand three hundred twenty-five dollars ($1,325) and may be increased to one thousand eight hundred fifty-five dollars ($1,855).(v) The fee for the issuance of a nonresident sterile compounding pharmacy license shall be two thousand three hundred eighty dollars ($2,380) and may be increased to three thousand three hundred thirty-five dollars ($3,335). The annual renewal of the license shall be two thousand two hundred seventy dollars ($2,270) and may be increased to three thousand one hundred eighty dollars ($3,180). In addition to paying that application fee, the nonresident sterile compounding pharmacy shall deposit, when submitting the application, a reasonable amount, as determined by the board, necessary to cover the boards estimated cost of performing the inspection required by Section 4127.2. If the required deposit is not submitted with the application, the application shall be deemed to be incomplete. If the actual cost of the inspection exceeds the amount deposited, the board shall provide to the applicant a written invoice for the remaining amount and shall not take action on the application until the full amount has been paid to the board. If the amount deposited exceeds the amount of actual and necessary costs incurred, the board shall remit the difference to the applicant.(w) The fee for the issuance of an outsourcing facility license shall be two thousand two hundred seventy dollars ($2,270) and may be increased to up to three thousand one hundred eighty dollars ($3,180) by the board. The fee for the renewal of an outsourcing facility license shall be one thousand three hundred twenty-five dollars ($1,325) and may be increased to up to one thousand eight hundred fifty-five dollars ($1,855) by the board. The fee for a temporary outsourcing facility license shall be seven hundred fifteen dollars ($715).(x) The fee for the issuance of a nonresident outsourcing facility license shall be two thousand three hundred eighty dollars ($2,380) and may be increased to up to three thousand three hundred thirty-five dollars ($3,335) by the board. The fee for the renewal of a nonresident outsourcing facility license shall be two thousand two hundred seventy dollars ($2,270) and may be increased to up to three thousand one hundred eighty dollars ($3,180) by the board. In addition to paying that application fee, the nonresident outsourcing facility shall deposit, when submitting the application, a reasonable amount, as determined by the board, necessary to cover the boards estimated cost of performing the inspection required by Section 4129.2. If the required deposit is not submitted with the application, the application shall be deemed to be incomplete. If the actual cost of the inspection exceeds the amount deposited, the board shall provide to the applicant a written invoice for the remaining amount and shall not take action on the application until the full amount has been paid to the board. If the amount deposited exceeds the amount of actual and necessary costs incurred, the board shall remit the difference to the applicant.(y) The fee for the issuance of a centralized hospital packaging license shall be eight hundred twenty dollars ($820) and may be increased to one thousand one hundred fifty dollars ($1,150). The annual renewal of the license shall be eight hundred five dollars ($805) and may be increased to one thousand one hundred twenty-five dollars ($1,125).(z)(1)The application fee for a pharmacy benefits manager representative license shall be ___ dollars ($___) and may be decreased to no less than ___ dollars ($___).(2)(z) (1) The application fee for a pharmacy benefit manager license shall be ___ dollars ($___) and may be decreased to no less than ___ dollars ($___).(3)(2) The licensure fee imposed under this subdivision shall not exceed the actual administrative costs in administering the provisions relating to the licensure and regulation of those licensees.(aa)This section shall become operative on July 1, 2017.
4400. The amount of fees and penalties prescribed by this chapter, except as otherwise provided, is that fixed by the board according to the following schedule:(a) The fee for a nongovernmental pharmacy license shall be five hundred twenty dollars ($520) and may be increased to five hundred seventy dollars ($570). The fee for the issuance of a temporary nongovernmental pharmacy permit shall be two hundred fifty dollars ($250) and may be increased to three hundred twenty-five dollars ($325).(b) The fee for a nongovernmental pharmacy license annual renewal shall be six hundred sixty-five dollars ($665) and may be increased to nine hundred thirty dollars ($930).(c) The fee for the pharmacist application and examination shall be two hundred sixty dollars ($260) and may be increased to two hundred eighty-five dollars ($285).(d) The fee for regrading an examination shall be ninety dollars ($90) and may be increased to one hundred fifteen dollars ($115). If an error in grading is found and the applicant passes the examination, the regrading fee shall be refunded.(e) The fee for a pharmacist license shall be one hundred ninety-five dollars ($195) and may be increased to two hundred fifteen dollars ($215). The fee for a pharmacist biennial renewal shall be three hundred sixty dollars ($360) and may be increased to five hundred five dollars ($505).(f) The fee for a nongovernmental wholesaler or third-party logistics provider license and annual renewal shall be seven hundred eighty dollars ($780) and may be increased to eight hundred twenty dollars ($820). The application fee for any additional location after licensure of the first 20 locations shall be three hundred dollars ($300) and may be decreased to no less than two hundred twenty-five dollars ($225). A temporary license fee shall be seven hundred fifteen dollars ($715) and may be decreased to no less than five hundred fifty dollars ($550).(g) The fee for a hypodermic license shall be one hundred seventy dollars ($170) and may be increased to two hundred forty dollars ($240). The fee for a hypodermic license renewal shall be two hundred dollars ($200) and may be increased to two hundred eighty dollars ($280).(h) (1) The fee for application, investigation, and issuance of a license as a designated representative pursuant to Section 4053, or as a designated representative-3PL pursuant to Section 4053.1, shall be one hundred fifty dollars ($150) and may be increased to two hundred ten dollars ($210).(2) The fee for the annual renewal of a license as a designated representative or designated representative-3PL shall be two hundred fifteen dollars ($215) and may be increased to three hundred dollars ($300).(i) (1) The fee for the application, investigation, and issuance of a license as a designated representative for a veterinary food-animal drug retailer pursuant to Section 4053 shall be one hundred fifty dollars ($150) and may be increased to two hundred ten dollars ($210).(2) The fee for the annual renewal of a license as a designated representative for a veterinary food-animal drug retailer shall be two hundred fifteen dollars ($215) and may be increased to three hundred dollars ($300).(j) (1) The application fee for a nonresident wholesaler or third-party logistics provider license issued pursuant to Section 4161 shall be seven hundred eighty dollars ($780) and may be increased to eight hundred twenty dollars ($820).(2) For nonresident wholesalers or third-party logistics providers that have 21 or more facilities operating nationwide the application fees for the first 20 locations shall be seven hundred eighty dollars ($780) and may be increased to eight hundred twenty dollars ($820). The application fee for any additional location after licensure of the first 20 locations shall be three hundred dollars ($300) and may be decreased to no less than two hundred twenty-five dollars ($225). A temporary license fee shall be seven hundred fifteen dollars ($715) and may be decreased to no less than five hundred fifty dollars ($550).(3) The annual renewal fee for a nonresident wholesaler license or third-party logistics provider license issued pursuant to Section 4161 shall be seven hundred eighty dollars ($780) and may be increased to eight hundred twenty dollars ($820).(k) The fee for evaluation of continuing education courses for accreditation shall be set by the board at an amount not to exceed forty dollars ($40) per course hour.(l) The fee for an intern pharmacist license shall be one hundred sixty-five dollars ($165) and may be increased to two hundred thirty dollars ($230). The fee for transfer of intern hours or verification of licensure to another state shall be twenty-five dollars ($25) and may be increased to thirty dollars ($30).(m) The board may waive or refund the additional fee for the issuance of a license where the license is issued less than 45 days before the next regular renewal date.(n) The fee for the reissuance of any license, or renewal thereof, that has been lost or destroyed or reissued due to a name change shall be thirty-five dollars ($35) and may be increased to forty-five dollars ($45).(o) The fee for the reissuance of any license, or renewal thereof, that must be reissued because of a change in the information, shall be one hundred dollars ($100) and may be increased to one hundred thirty dollars ($130).(p) It is the intent of the Legislature that, in setting fees pursuant to this section, the board shall seek to maintain a reserve in the Pharmacy Board Contingent Fund equal to approximately one years operating expenditures.(q) The fee for any applicant for a nongovernmental clinic license shall be five hundred twenty dollars ($520) for each license and may be increased to five hundred seventy dollars ($570). The annual fee for renewal of the license shall be three hundred twenty-five dollars ($325) for each license and may be increased to three hundred sixty dollars ($360).(r) The fee for the issuance of a pharmacy technician license shall be one hundred forty dollars ($140) and may be increased to one hundred ninety-five dollars ($195). The fee for renewal of a pharmacy technician license shall be one hundred forty dollars ($140) and may be increased to one hundred ninety-five dollars ($195).(s) The fee for a veterinary food-animal drug retailer license shall be four hundred thirty-five dollars ($435) and may be increased to six hundred ten dollars ($610). The annual renewal fee for a veterinary food-animal drug retailer license shall be three hundred thirty dollars ($330) and may be increased to four hundred sixty dollars ($460).(t) The fee for issuance of a retired license pursuant to Section 4200.5 shall be thirty-five dollars ($35) and may be increased to forty-five dollars ($45).(u) The fee for issuance of a nongovernmental sterile compounding pharmacy license shall be one thousand six hundred forty-five dollars ($1,645) and may be increased to two thousand three hundred five dollars ($2,305). The fee for a temporary license shall be five hundred fifty dollars ($550) and may be increased to seven hundred fifteen dollars ($715). The annual renewal fee of the license shall be one thousand three hundred twenty-five dollars ($1,325) and may be increased to one thousand eight hundred fifty-five dollars ($1,855).(v) The fee for the issuance of a nonresident sterile compounding pharmacy license shall be two thousand three hundred eighty dollars ($2,380) and may be increased to three thousand three hundred thirty-five dollars ($3,335). The annual renewal of the license shall be two thousand two hundred seventy dollars ($2,270) and may be increased to three thousand one hundred eighty dollars ($3,180). In addition to paying that application fee, the nonresident sterile compounding pharmacy shall deposit, when submitting the application, a reasonable amount, as determined by the board, necessary to cover the boards estimated cost of performing the inspection required by Section 4127.2. If the required deposit is not submitted with the application, the application shall be deemed to be incomplete. If the actual cost of the inspection exceeds the amount deposited, the board shall provide to the applicant a written invoice for the remaining amount and shall not take action on the application until the full amount has been paid to the board. If the amount deposited exceeds the amount of actual and necessary costs incurred, the board shall remit the difference to the applicant.(w) The fee for the issuance of an outsourcing facility license shall be two thousand two hundred seventy dollars ($2,270) and may be increased to up to three thousand one hundred eighty dollars ($3,180) by the board. The fee for the renewal of an outsourcing facility license shall be one thousand three hundred twenty-five dollars ($1,325) and may be increased to up to one thousand eight hundred fifty-five dollars ($1,855) by the board. The fee for a temporary outsourcing facility license shall be seven hundred fifteen dollars ($715).(x) The fee for the issuance of a nonresident outsourcing facility license shall be two thousand three hundred eighty dollars ($2,380) and may be increased to up to three thousand three hundred thirty-five dollars ($3,335) by the board. The fee for the renewal of a nonresident outsourcing facility license shall be two thousand two hundred seventy dollars ($2,270) and may be increased to up to three thousand one hundred eighty dollars ($3,180) by the board. In addition to paying that application fee, the nonresident outsourcing facility shall deposit, when submitting the application, a reasonable amount, as determined by the board, necessary to cover the boards estimated cost of performing the inspection required by Section 4129.2. If the required deposit is not submitted with the application, the application shall be deemed to be incomplete. If the actual cost of the inspection exceeds the amount deposited, the board shall provide to the applicant a written invoice for the remaining amount and shall not take action on the application until the full amount has been paid to the board. If the amount deposited exceeds the amount of actual and necessary costs incurred, the board shall remit the difference to the applicant.(y) The fee for the issuance of a centralized hospital packaging license shall be eight hundred twenty dollars ($820) and may be increased to one thousand one hundred fifty dollars ($1,150). The annual renewal of the license shall be eight hundred five dollars ($805) and may be increased to one thousand one hundred twenty-five dollars ($1,125).(z)(1)The application fee for a pharmacy benefits manager representative license shall be ___ dollars ($___) and may be decreased to no less than ___ dollars ($___).(2)(z) (1) The application fee for a pharmacy benefit manager license shall be ___ dollars ($___) and may be decreased to no less than ___ dollars ($___).(3)(2) The licensure fee imposed under this subdivision shall not exceed the actual administrative costs in administering the provisions relating to the licensure and regulation of those licensees.(aa)This section shall become operative on July 1, 2017.
4400. The amount of fees and penalties prescribed by this chapter, except as otherwise provided, is that fixed by the board according to the following schedule:(a) The fee for a nongovernmental pharmacy license shall be five hundred twenty dollars ($520) and may be increased to five hundred seventy dollars ($570). The fee for the issuance of a temporary nongovernmental pharmacy permit shall be two hundred fifty dollars ($250) and may be increased to three hundred twenty-five dollars ($325).(b) The fee for a nongovernmental pharmacy license annual renewal shall be six hundred sixty-five dollars ($665) and may be increased to nine hundred thirty dollars ($930).(c) The fee for the pharmacist application and examination shall be two hundred sixty dollars ($260) and may be increased to two hundred eighty-five dollars ($285).(d) The fee for regrading an examination shall be ninety dollars ($90) and may be increased to one hundred fifteen dollars ($115). If an error in grading is found and the applicant passes the examination, the regrading fee shall be refunded.(e) The fee for a pharmacist license shall be one hundred ninety-five dollars ($195) and may be increased to two hundred fifteen dollars ($215). The fee for a pharmacist biennial renewal shall be three hundred sixty dollars ($360) and may be increased to five hundred five dollars ($505).(f) The fee for a nongovernmental wholesaler or third-party logistics provider license and annual renewal shall be seven hundred eighty dollars ($780) and may be increased to eight hundred twenty dollars ($820). The application fee for any additional location after licensure of the first 20 locations shall be three hundred dollars ($300) and may be decreased to no less than two hundred twenty-five dollars ($225). A temporary license fee shall be seven hundred fifteen dollars ($715) and may be decreased to no less than five hundred fifty dollars ($550).(g) The fee for a hypodermic license shall be one hundred seventy dollars ($170) and may be increased to two hundred forty dollars ($240). The fee for a hypodermic license renewal shall be two hundred dollars ($200) and may be increased to two hundred eighty dollars ($280).(h) (1) The fee for application, investigation, and issuance of a license as a designated representative pursuant to Section 4053, or as a designated representative-3PL pursuant to Section 4053.1, shall be one hundred fifty dollars ($150) and may be increased to two hundred ten dollars ($210).(2) The fee for the annual renewal of a license as a designated representative or designated representative-3PL shall be two hundred fifteen dollars ($215) and may be increased to three hundred dollars ($300).(i) (1) The fee for the application, investigation, and issuance of a license as a designated representative for a veterinary food-animal drug retailer pursuant to Section 4053 shall be one hundred fifty dollars ($150) and may be increased to two hundred ten dollars ($210).(2) The fee for the annual renewal of a license as a designated representative for a veterinary food-animal drug retailer shall be two hundred fifteen dollars ($215) and may be increased to three hundred dollars ($300).(j) (1) The application fee for a nonresident wholesaler or third-party logistics provider license issued pursuant to Section 4161 shall be seven hundred eighty dollars ($780) and may be increased to eight hundred twenty dollars ($820).(2) For nonresident wholesalers or third-party logistics providers that have 21 or more facilities operating nationwide the application fees for the first 20 locations shall be seven hundred eighty dollars ($780) and may be increased to eight hundred twenty dollars ($820). The application fee for any additional location after licensure of the first 20 locations shall be three hundred dollars ($300) and may be decreased to no less than two hundred twenty-five dollars ($225). A temporary license fee shall be seven hundred fifteen dollars ($715) and may be decreased to no less than five hundred fifty dollars ($550).(3) The annual renewal fee for a nonresident wholesaler license or third-party logistics provider license issued pursuant to Section 4161 shall be seven hundred eighty dollars ($780) and may be increased to eight hundred twenty dollars ($820).(k) The fee for evaluation of continuing education courses for accreditation shall be set by the board at an amount not to exceed forty dollars ($40) per course hour.(l) The fee for an intern pharmacist license shall be one hundred sixty-five dollars ($165) and may be increased to two hundred thirty dollars ($230). The fee for transfer of intern hours or verification of licensure to another state shall be twenty-five dollars ($25) and may be increased to thirty dollars ($30).(m) The board may waive or refund the additional fee for the issuance of a license where the license is issued less than 45 days before the next regular renewal date.(n) The fee for the reissuance of any license, or renewal thereof, that has been lost or destroyed or reissued due to a name change shall be thirty-five dollars ($35) and may be increased to forty-five dollars ($45).(o) The fee for the reissuance of any license, or renewal thereof, that must be reissued because of a change in the information, shall be one hundred dollars ($100) and may be increased to one hundred thirty dollars ($130).(p) It is the intent of the Legislature that, in setting fees pursuant to this section, the board shall seek to maintain a reserve in the Pharmacy Board Contingent Fund equal to approximately one years operating expenditures.(q) The fee for any applicant for a nongovernmental clinic license shall be five hundred twenty dollars ($520) for each license and may be increased to five hundred seventy dollars ($570). The annual fee for renewal of the license shall be three hundred twenty-five dollars ($325) for each license and may be increased to three hundred sixty dollars ($360).(r) The fee for the issuance of a pharmacy technician license shall be one hundred forty dollars ($140) and may be increased to one hundred ninety-five dollars ($195). The fee for renewal of a pharmacy technician license shall be one hundred forty dollars ($140) and may be increased to one hundred ninety-five dollars ($195).(s) The fee for a veterinary food-animal drug retailer license shall be four hundred thirty-five dollars ($435) and may be increased to six hundred ten dollars ($610). The annual renewal fee for a veterinary food-animal drug retailer license shall be three hundred thirty dollars ($330) and may be increased to four hundred sixty dollars ($460).(t) The fee for issuance of a retired license pursuant to Section 4200.5 shall be thirty-five dollars ($35) and may be increased to forty-five dollars ($45).(u) The fee for issuance of a nongovernmental sterile compounding pharmacy license shall be one thousand six hundred forty-five dollars ($1,645) and may be increased to two thousand three hundred five dollars ($2,305). The fee for a temporary license shall be five hundred fifty dollars ($550) and may be increased to seven hundred fifteen dollars ($715). The annual renewal fee of the license shall be one thousand three hundred twenty-five dollars ($1,325) and may be increased to one thousand eight hundred fifty-five dollars ($1,855).(v) The fee for the issuance of a nonresident sterile compounding pharmacy license shall be two thousand three hundred eighty dollars ($2,380) and may be increased to three thousand three hundred thirty-five dollars ($3,335). The annual renewal of the license shall be two thousand two hundred seventy dollars ($2,270) and may be increased to three thousand one hundred eighty dollars ($3,180). In addition to paying that application fee, the nonresident sterile compounding pharmacy shall deposit, when submitting the application, a reasonable amount, as determined by the board, necessary to cover the boards estimated cost of performing the inspection required by Section 4127.2. If the required deposit is not submitted with the application, the application shall be deemed to be incomplete. If the actual cost of the inspection exceeds the amount deposited, the board shall provide to the applicant a written invoice for the remaining amount and shall not take action on the application until the full amount has been paid to the board. If the amount deposited exceeds the amount of actual and necessary costs incurred, the board shall remit the difference to the applicant.(w) The fee for the issuance of an outsourcing facility license shall be two thousand two hundred seventy dollars ($2,270) and may be increased to up to three thousand one hundred eighty dollars ($3,180) by the board. The fee for the renewal of an outsourcing facility license shall be one thousand three hundred twenty-five dollars ($1,325) and may be increased to up to one thousand eight hundred fifty-five dollars ($1,855) by the board. The fee for a temporary outsourcing facility license shall be seven hundred fifteen dollars ($715).(x) The fee for the issuance of a nonresident outsourcing facility license shall be two thousand three hundred eighty dollars ($2,380) and may be increased to up to three thousand three hundred thirty-five dollars ($3,335) by the board. The fee for the renewal of a nonresident outsourcing facility license shall be two thousand two hundred seventy dollars ($2,270) and may be increased to up to three thousand one hundred eighty dollars ($3,180) by the board. In addition to paying that application fee, the nonresident outsourcing facility shall deposit, when submitting the application, a reasonable amount, as determined by the board, necessary to cover the boards estimated cost of performing the inspection required by Section 4129.2. If the required deposit is not submitted with the application, the application shall be deemed to be incomplete. If the actual cost of the inspection exceeds the amount deposited, the board shall provide to the applicant a written invoice for the remaining amount and shall not take action on the application until the full amount has been paid to the board. If the amount deposited exceeds the amount of actual and necessary costs incurred, the board shall remit the difference to the applicant.(y) The fee for the issuance of a centralized hospital packaging license shall be eight hundred twenty dollars ($820) and may be increased to one thousand one hundred fifty dollars ($1,150). The annual renewal of the license shall be eight hundred five dollars ($805) and may be increased to one thousand one hundred twenty-five dollars ($1,125).(z)(1)The application fee for a pharmacy benefits manager representative license shall be ___ dollars ($___) and may be decreased to no less than ___ dollars ($___).(2)(z) (1) The application fee for a pharmacy benefit manager license shall be ___ dollars ($___) and may be decreased to no less than ___ dollars ($___).(3)(2) The licensure fee imposed under this subdivision shall not exceed the actual administrative costs in administering the provisions relating to the licensure and regulation of those licensees.(aa)This section shall become operative on July 1, 2017.
4400. The amount of fees and penalties prescribed by this chapter, except as otherwise provided, is that fixed by the board according to the following schedule:
(a) The fee for a nongovernmental pharmacy license shall be five hundred twenty dollars ($520) and may be increased to five hundred seventy dollars ($570). The fee for the issuance of a temporary nongovernmental pharmacy permit shall be two hundred fifty dollars ($250) and may be increased to three hundred twenty-five dollars ($325).
(b) The fee for a nongovernmental pharmacy license annual renewal shall be six hundred sixty-five dollars ($665) and may be increased to nine hundred thirty dollars ($930).
(c) The fee for the pharmacist application and examination shall be two hundred sixty dollars ($260) and may be increased to two hundred eighty-five dollars ($285).
(d) The fee for regrading an examination shall be ninety dollars ($90) and may be increased to one hundred fifteen dollars ($115). If an error in grading is found and the applicant passes the examination, the regrading fee shall be refunded.
(e) The fee for a pharmacist license shall be one hundred ninety-five dollars ($195) and may be increased to two hundred fifteen dollars ($215). The fee for a pharmacist biennial renewal shall be three hundred sixty dollars ($360) and may be increased to five hundred five dollars ($505).
(f) The fee for a nongovernmental wholesaler or third-party logistics provider license and annual renewal shall be seven hundred eighty dollars ($780) and may be increased to eight hundred twenty dollars ($820). The application fee for any additional location after licensure of the first 20 locations shall be three hundred dollars ($300) and may be decreased to no less than two hundred twenty-five dollars ($225). A temporary license fee shall be seven hundred fifteen dollars ($715) and may be decreased to no less than five hundred fifty dollars ($550).
(g) The fee for a hypodermic license shall be one hundred seventy dollars ($170) and may be increased to two hundred forty dollars ($240). The fee for a hypodermic license renewal shall be two hundred dollars ($200) and may be increased to two hundred eighty dollars ($280).
(h) (1) The fee for application, investigation, and issuance of a license as a designated representative pursuant to Section 4053, or as a designated representative-3PL pursuant to Section 4053.1, shall be one hundred fifty dollars ($150) and may be increased to two hundred ten dollars ($210).
(2) The fee for the annual renewal of a license as a designated representative or designated representative-3PL shall be two hundred fifteen dollars ($215) and may be increased to three hundred dollars ($300).
(i) (1) The fee for the application, investigation, and issuance of a license as a designated representative for a veterinary food-animal drug retailer pursuant to Section 4053 shall be one hundred fifty dollars ($150) and may be increased to two hundred ten dollars ($210).
(2) The fee for the annual renewal of a license as a designated representative for a veterinary food-animal drug retailer shall be two hundred fifteen dollars ($215) and may be increased to three hundred dollars ($300).
(j) (1) The application fee for a nonresident wholesaler or third-party logistics provider license issued pursuant to Section 4161 shall be seven hundred eighty dollars ($780) and may be increased to eight hundred twenty dollars ($820).
(2) For nonresident wholesalers or third-party logistics providers that have 21 or more facilities operating nationwide the application fees for the first 20 locations shall be seven hundred eighty dollars ($780) and may be increased to eight hundred twenty dollars ($820). The application fee for any additional location after licensure of the first 20 locations shall be three hundred dollars ($300) and may be decreased to no less than two hundred twenty-five dollars ($225). A temporary license fee shall be seven hundred fifteen dollars ($715) and may be decreased to no less than five hundred fifty dollars ($550).
(3) The annual renewal fee for a nonresident wholesaler license or third-party logistics provider license issued pursuant to Section 4161 shall be seven hundred eighty dollars ($780) and may be increased to eight hundred twenty dollars ($820).
(k) The fee for evaluation of continuing education courses for accreditation shall be set by the board at an amount not to exceed forty dollars ($40) per course hour.
(l) The fee for an intern pharmacist license shall be one hundred sixty-five dollars ($165) and may be increased to two hundred thirty dollars ($230). The fee for transfer of intern hours or verification of licensure to another state shall be twenty-five dollars ($25) and may be increased to thirty dollars ($30).
(m) The board may waive or refund the additional fee for the issuance of a license where the license is issued less than 45 days before the next regular renewal date.
(n) The fee for the reissuance of any license, or renewal thereof, that has been lost or destroyed or reissued due to a name change shall be thirty-five dollars ($35) and may be increased to forty-five dollars ($45).
(o) The fee for the reissuance of any license, or renewal thereof, that must be reissued because of a change in the information, shall be one hundred dollars ($100) and may be increased to one hundred thirty dollars ($130).
(p) It is the intent of the Legislature that, in setting fees pursuant to this section, the board shall seek to maintain a reserve in the Pharmacy Board Contingent Fund equal to approximately one years operating expenditures.
(q) The fee for any applicant for a nongovernmental clinic license shall be five hundred twenty dollars ($520) for each license and may be increased to five hundred seventy dollars ($570). The annual fee for renewal of the license shall be three hundred twenty-five dollars ($325) for each license and may be increased to three hundred sixty dollars ($360).
(r) The fee for the issuance of a pharmacy technician license shall be one hundred forty dollars ($140) and may be increased to one hundred ninety-five dollars ($195). The fee for renewal of a pharmacy technician license shall be one hundred forty dollars ($140) and may be increased to one hundred ninety-five dollars ($195).
(s) The fee for a veterinary food-animal drug retailer license shall be four hundred thirty-five dollars ($435) and may be increased to six hundred ten dollars ($610). The annual renewal fee for a veterinary food-animal drug retailer license shall be three hundred thirty dollars ($330) and may be increased to four hundred sixty dollars ($460).
(t) The fee for issuance of a retired license pursuant to Section 4200.5 shall be thirty-five dollars ($35) and may be increased to forty-five dollars ($45).
(u) The fee for issuance of a nongovernmental sterile compounding pharmacy license shall be one thousand six hundred forty-five dollars ($1,645) and may be increased to two thousand three hundred five dollars ($2,305). The fee for a temporary license shall be five hundred fifty dollars ($550) and may be increased to seven hundred fifteen dollars ($715). The annual renewal fee of the license shall be one thousand three hundred twenty-five dollars ($1,325) and may be increased to one thousand eight hundred fifty-five dollars ($1,855).
(v) The fee for the issuance of a nonresident sterile compounding pharmacy license shall be two thousand three hundred eighty dollars ($2,380) and may be increased to three thousand three hundred thirty-five dollars ($3,335). The annual renewal of the license shall be two thousand two hundred seventy dollars ($2,270) and may be increased to three thousand one hundred eighty dollars ($3,180). In addition to paying that application fee, the nonresident sterile compounding pharmacy shall deposit, when submitting the application, a reasonable amount, as determined by the board, necessary to cover the boards estimated cost of performing the inspection required by Section 4127.2. If the required deposit is not submitted with the application, the application shall be deemed to be incomplete. If the actual cost of the inspection exceeds the amount deposited, the board shall provide to the applicant a written invoice for the remaining amount and shall not take action on the application until the full amount has been paid to the board. If the amount deposited exceeds the amount of actual and necessary costs incurred, the board shall remit the difference to the applicant.
(w) The fee for the issuance of an outsourcing facility license shall be two thousand two hundred seventy dollars ($2,270) and may be increased to up to three thousand one hundred eighty dollars ($3,180) by the board. The fee for the renewal of an outsourcing facility license shall be one thousand three hundred twenty-five dollars ($1,325) and may be increased to up to one thousand eight hundred fifty-five dollars ($1,855) by the board. The fee for a temporary outsourcing facility license shall be seven hundred fifteen dollars ($715).
(x) The fee for the issuance of a nonresident outsourcing facility license shall be two thousand three hundred eighty dollars ($2,380) and may be increased to up to three thousand three hundred thirty-five dollars ($3,335) by the board. The fee for the renewal of a nonresident outsourcing facility license shall be two thousand two hundred seventy dollars ($2,270) and may be increased to up to three thousand one hundred eighty dollars ($3,180) by the board. In addition to paying that application fee, the nonresident outsourcing facility shall deposit, when submitting the application, a reasonable amount, as determined by the board, necessary to cover the boards estimated cost of performing the inspection required by Section 4129.2. If the required deposit is not submitted with the application, the application shall be deemed to be incomplete. If the actual cost of the inspection exceeds the amount deposited, the board shall provide to the applicant a written invoice for the remaining amount and shall not take action on the application until the full amount has been paid to the board. If the amount deposited exceeds the amount of actual and necessary costs incurred, the board shall remit the difference to the applicant.
(y) The fee for the issuance of a centralized hospital packaging license shall be eight hundred twenty dollars ($820) and may be increased to one thousand one hundred fifty dollars ($1,150). The annual renewal of the license shall be eight hundred five dollars ($805) and may be increased to one thousand one hundred twenty-five dollars ($1,125).
(z)(1)The application fee for a pharmacy benefits manager representative license shall be ___ dollars ($___) and may be decreased to no less than ___ dollars ($___).
(2)
(z) (1) The application fee for a pharmacy benefit manager license shall be ___ dollars ($___) and may be decreased to no less than ___ dollars ($___).
(3)
(2) The licensure fee imposed under this subdivision shall not exceed the actual administrative costs in administering the provisions relating to the licensure and regulation of those licensees.
(aa)This section shall become operative on July 1, 2017.
SEC. 8.SEC. 6. Article 25 (commencing with Section 4427) is added to Chapter 9 of Division 2 of the Business and Professions Code, to read: Article 25. Pharmacy Benefit Managers4427. (a) (1) A person or entity shall not act as pharmacy benefit manager for any dangerous drug or dangerous device unless he, she, or it has obtained a license from the board.(2) (A) A pharmacy benefit manager shall disclose to the board the location, names, and titles of all of the following:(i) Its agent for service of process in this state.(ii) All pharmacists of the pharmacy benefit manager who are dispensing controlled substances, dangerous drugs, or dangerous devices to residents of this state.(iii)The designated pharmacy benefits management representative by location.(B) This information shall be made disclosed on an annual basis and within 30 days after any change of office, corporate officer, partner, or pharmacist.(b) Upon approval by the board and the payment of the required fee, the board shall issue a license to the applicant.(c)(1)Each place of business of a pharmacy benefit manager in California shall be supervised and managed by a designated pharmacy benefits management representative. The designated pharmacy benefits management representative shall be responsible for the pharmacy benefit managers compliance with state and federal laws.(2)As part of its initial application for a license, and for each renewal, each pharmacy benefit manager shall, on a form designed by the board, provide identifying information and the California license number for a designated pharmacy benefits management representative or pharmacist proposed to serve as the designated representative-in-charge.(3)The board shall not issue or renew a pharmacy benefit manager license without identification of an approved designated pharmacy benefits management representative.(4)The designated pharmacy benefits management representative shall maintain an active license as a designated pharmacy benefits management representative with the board at all times during which he or she is designated as the designated pharmacy benefits management representative.(d)A pharmacy benefit manager shall notify the board in writing, on a form designed by the board, within 30 days of the date when a designated pharmacy benefits management representative ceases to act as the designated pharmacy benefits management representative, and shall on the same form propose another designated pharmacy benefits management representative or pharmacist to take over as the designated pharmacy benefits management representative.(e)(1)The board may issue a temporary license, upon conditions and for periods of time as the board determines to be in the public interest. A temporary license fee shall be required in an amount established by the board as specified in subdivision (z) of Section 4400.(2)When needed to protect public safety, a temporary license may be issued for a period not to exceed 180 days, subject to terms and conditions that the board deems necessary.(3)If the board determines that a temporary license was issued by mistake or denies the application for a permanent license, the temporary license shall terminate upon either personal service of the notice of termination upon the licenseholder or service by certified mail, return receipt requested, at the licenseholders address of record with the board, whichever occurs first.(4)Neither for purposes of retaining a temporary license, nor for purposes of any disciplinary or license denial proceeding before the board, shall the temporary licenseholder be deemed to have a vested property right or interest in the license.4428.(a)A pharmacy benefit manager shall provide the information described in this section to the board, on an annual basis covering the contract year and in such form and manner as the board shall specify:(1)For California residents whose prescription drug benefit is managed by the pharmacy benefit manager, the percentage of all oral prescriptions and self-administered drugs that were dispensed through pharmacies affiliated with the pharmacy benefit manager and the percentage of oral and self-administered drugs dispensed through retail pharmacies.(2)The aggregate amount of discounts or price concessions (excluding bona fide service fees, which include, but are not limited to, distribution service fees, inventory management fees, product stocking allowances, and fees associated with administrative services agreements and patient care programs (such as medication compliance programs and patient education programs)) that the pharmacy benefit manager received from manufacturers of prescription drugs that were attributable to utilization by California residents whose prescription drug benefit was managed by a pharmacy benefit manager.(3)The aggregate amount, and the type of rebates, discounts, or price concessions (excluding bona fide services, which include, but are not limited to, distribution service fees, inventory management fees, product stocking allowances, and fees associated with administrative service agreements and patient care programs (such as medication compliance programs and patient education programs)) provided to health care service plans, as defined in subdivision (f) of Section 1345 of the Health and Safety Code, and health insurers, as defined in subdivision (b) of Section 106 of the Insurance Code, and that are attributable to patient utilization under the plan, and the aggregate amount of the rebates, discounts, or price concessions that are passed through to enrollees and the total number of prescriptions dispensed.(b)The board shall make the information provided by pharmacy benefit managers in subdivision (a) available as part of its annual report.4429.4428. The board has the authority to enforce the provisions of this article, including the authority to adopt, amend, or repeal any rules and regulations, not inconsistent with the laws of this state, as may be necessary for the protection of the public and to implement this article.4429. This article shall not apply to the following:(a) A health care service plan or health insurer, if the health care service plan or health insurer offers or provides pharmacy benefit management services and if those services are offered or provided only to enrollees, subscribers, policyholders, or insureds who are also covered by health benefits offered or provided by that health care service plan or health insurer.(b) An affiliate, subsidiary, related entity or contracted medical groups of a health care service plan or health insurer that would otherwise qualify as a pharmacy benefit manager but offers or provides services only to enrollees, subscribers, policyholders, or insureds who are also covered by health benefits offered or provided by the health care service plan or health insurer.
SEC. 8.SEC. 6. Article 25 (commencing with Section 4427) is added to Chapter 9 of Division 2 of the Business and Professions Code, to read:
### SEC. 8.SEC. 6.
Article 25. Pharmacy Benefit Managers4427. (a) (1) A person or entity shall not act as pharmacy benefit manager for any dangerous drug or dangerous device unless he, she, or it has obtained a license from the board.(2) (A) A pharmacy benefit manager shall disclose to the board the location, names, and titles of all of the following:(i) Its agent for service of process in this state.(ii) All pharmacists of the pharmacy benefit manager who are dispensing controlled substances, dangerous drugs, or dangerous devices to residents of this state.(iii)The designated pharmacy benefits management representative by location.(B) This information shall be made disclosed on an annual basis and within 30 days after any change of office, corporate officer, partner, or pharmacist.(b) Upon approval by the board and the payment of the required fee, the board shall issue a license to the applicant.(c)(1)Each place of business of a pharmacy benefit manager in California shall be supervised and managed by a designated pharmacy benefits management representative. The designated pharmacy benefits management representative shall be responsible for the pharmacy benefit managers compliance with state and federal laws.(2)As part of its initial application for a license, and for each renewal, each pharmacy benefit manager shall, on a form designed by the board, provide identifying information and the California license number for a designated pharmacy benefits management representative or pharmacist proposed to serve as the designated representative-in-charge.(3)The board shall not issue or renew a pharmacy benefit manager license without identification of an approved designated pharmacy benefits management representative.(4)The designated pharmacy benefits management representative shall maintain an active license as a designated pharmacy benefits management representative with the board at all times during which he or she is designated as the designated pharmacy benefits management representative.(d)A pharmacy benefit manager shall notify the board in writing, on a form designed by the board, within 30 days of the date when a designated pharmacy benefits management representative ceases to act as the designated pharmacy benefits management representative, and shall on the same form propose another designated pharmacy benefits management representative or pharmacist to take over as the designated pharmacy benefits management representative.(e)(1)The board may issue a temporary license, upon conditions and for periods of time as the board determines to be in the public interest. A temporary license fee shall be required in an amount established by the board as specified in subdivision (z) of Section 4400.(2)When needed to protect public safety, a temporary license may be issued for a period not to exceed 180 days, subject to terms and conditions that the board deems necessary.(3)If the board determines that a temporary license was issued by mistake or denies the application for a permanent license, the temporary license shall terminate upon either personal service of the notice of termination upon the licenseholder or service by certified mail, return receipt requested, at the licenseholders address of record with the board, whichever occurs first.(4)Neither for purposes of retaining a temporary license, nor for purposes of any disciplinary or license denial proceeding before the board, shall the temporary licenseholder be deemed to have a vested property right or interest in the license.4428.(a)A pharmacy benefit manager shall provide the information described in this section to the board, on an annual basis covering the contract year and in such form and manner as the board shall specify:(1)For California residents whose prescription drug benefit is managed by the pharmacy benefit manager, the percentage of all oral prescriptions and self-administered drugs that were dispensed through pharmacies affiliated with the pharmacy benefit manager and the percentage of oral and self-administered drugs dispensed through retail pharmacies.(2)The aggregate amount of discounts or price concessions (excluding bona fide service fees, which include, but are not limited to, distribution service fees, inventory management fees, product stocking allowances, and fees associated with administrative services agreements and patient care programs (such as medication compliance programs and patient education programs)) that the pharmacy benefit manager received from manufacturers of prescription drugs that were attributable to utilization by California residents whose prescription drug benefit was managed by a pharmacy benefit manager.(3)The aggregate amount, and the type of rebates, discounts, or price concessions (excluding bona fide services, which include, but are not limited to, distribution service fees, inventory management fees, product stocking allowances, and fees associated with administrative service agreements and patient care programs (such as medication compliance programs and patient education programs)) provided to health care service plans, as defined in subdivision (f) of Section 1345 of the Health and Safety Code, and health insurers, as defined in subdivision (b) of Section 106 of the Insurance Code, and that are attributable to patient utilization under the plan, and the aggregate amount of the rebates, discounts, or price concessions that are passed through to enrollees and the total number of prescriptions dispensed.(b)The board shall make the information provided by pharmacy benefit managers in subdivision (a) available as part of its annual report.4429.4428. The board has the authority to enforce the provisions of this article, including the authority to adopt, amend, or repeal any rules and regulations, not inconsistent with the laws of this state, as may be necessary for the protection of the public and to implement this article.4429. This article shall not apply to the following:(a) A health care service plan or health insurer, if the health care service plan or health insurer offers or provides pharmacy benefit management services and if those services are offered or provided only to enrollees, subscribers, policyholders, or insureds who are also covered by health benefits offered or provided by that health care service plan or health insurer.(b) An affiliate, subsidiary, related entity or contracted medical groups of a health care service plan or health insurer that would otherwise qualify as a pharmacy benefit manager but offers or provides services only to enrollees, subscribers, policyholders, or insureds who are also covered by health benefits offered or provided by the health care service plan or health insurer.
Article 25. Pharmacy Benefit Managers4427. (a) (1) A person or entity shall not act as pharmacy benefit manager for any dangerous drug or dangerous device unless he, she, or it has obtained a license from the board.(2) (A) A pharmacy benefit manager shall disclose to the board the location, names, and titles of all of the following:(i) Its agent for service of process in this state.(ii) All pharmacists of the pharmacy benefit manager who are dispensing controlled substances, dangerous drugs, or dangerous devices to residents of this state.(iii)The designated pharmacy benefits management representative by location.(B) This information shall be made disclosed on an annual basis and within 30 days after any change of office, corporate officer, partner, or pharmacist.(b) Upon approval by the board and the payment of the required fee, the board shall issue a license to the applicant.(c)(1)Each place of business of a pharmacy benefit manager in California shall be supervised and managed by a designated pharmacy benefits management representative. The designated pharmacy benefits management representative shall be responsible for the pharmacy benefit managers compliance with state and federal laws.(2)As part of its initial application for a license, and for each renewal, each pharmacy benefit manager shall, on a form designed by the board, provide identifying information and the California license number for a designated pharmacy benefits management representative or pharmacist proposed to serve as the designated representative-in-charge.(3)The board shall not issue or renew a pharmacy benefit manager license without identification of an approved designated pharmacy benefits management representative.(4)The designated pharmacy benefits management representative shall maintain an active license as a designated pharmacy benefits management representative with the board at all times during which he or she is designated as the designated pharmacy benefits management representative.(d)A pharmacy benefit manager shall notify the board in writing, on a form designed by the board, within 30 days of the date when a designated pharmacy benefits management representative ceases to act as the designated pharmacy benefits management representative, and shall on the same form propose another designated pharmacy benefits management representative or pharmacist to take over as the designated pharmacy benefits management representative.(e)(1)The board may issue a temporary license, upon conditions and for periods of time as the board determines to be in the public interest. A temporary license fee shall be required in an amount established by the board as specified in subdivision (z) of Section 4400.(2)When needed to protect public safety, a temporary license may be issued for a period not to exceed 180 days, subject to terms and conditions that the board deems necessary.(3)If the board determines that a temporary license was issued by mistake or denies the application for a permanent license, the temporary license shall terminate upon either personal service of the notice of termination upon the licenseholder or service by certified mail, return receipt requested, at the licenseholders address of record with the board, whichever occurs first.(4)Neither for purposes of retaining a temporary license, nor for purposes of any disciplinary or license denial proceeding before the board, shall the temporary licenseholder be deemed to have a vested property right or interest in the license.4428.(a)A pharmacy benefit manager shall provide the information described in this section to the board, on an annual basis covering the contract year and in such form and manner as the board shall specify:(1)For California residents whose prescription drug benefit is managed by the pharmacy benefit manager, the percentage of all oral prescriptions and self-administered drugs that were dispensed through pharmacies affiliated with the pharmacy benefit manager and the percentage of oral and self-administered drugs dispensed through retail pharmacies.(2)The aggregate amount of discounts or price concessions (excluding bona fide service fees, which include, but are not limited to, distribution service fees, inventory management fees, product stocking allowances, and fees associated with administrative services agreements and patient care programs (such as medication compliance programs and patient education programs)) that the pharmacy benefit manager received from manufacturers of prescription drugs that were attributable to utilization by California residents whose prescription drug benefit was managed by a pharmacy benefit manager.(3)The aggregate amount, and the type of rebates, discounts, or price concessions (excluding bona fide services, which include, but are not limited to, distribution service fees, inventory management fees, product stocking allowances, and fees associated with administrative service agreements and patient care programs (such as medication compliance programs and patient education programs)) provided to health care service plans, as defined in subdivision (f) of Section 1345 of the Health and Safety Code, and health insurers, as defined in subdivision (b) of Section 106 of the Insurance Code, and that are attributable to patient utilization under the plan, and the aggregate amount of the rebates, discounts, or price concessions that are passed through to enrollees and the total number of prescriptions dispensed.(b)The board shall make the information provided by pharmacy benefit managers in subdivision (a) available as part of its annual report.4429.4428. The board has the authority to enforce the provisions of this article, including the authority to adopt, amend, or repeal any rules and regulations, not inconsistent with the laws of this state, as may be necessary for the protection of the public and to implement this article.4429. This article shall not apply to the following:(a) A health care service plan or health insurer, if the health care service plan or health insurer offers or provides pharmacy benefit management services and if those services are offered or provided only to enrollees, subscribers, policyholders, or insureds who are also covered by health benefits offered or provided by that health care service plan or health insurer.(b) An affiliate, subsidiary, related entity or contracted medical groups of a health care service plan or health insurer that would otherwise qualify as a pharmacy benefit manager but offers or provides services only to enrollees, subscribers, policyholders, or insureds who are also covered by health benefits offered or provided by the health care service plan or health insurer.
Article 25. Pharmacy Benefit Managers
Article 25. Pharmacy Benefit Managers
4427. (a) (1) A person or entity shall not act as pharmacy benefit manager for any dangerous drug or dangerous device unless he, she, or it has obtained a license from the board.(2) (A) A pharmacy benefit manager shall disclose to the board the location, names, and titles of all of the following:(i) Its agent for service of process in this state.(ii) All pharmacists of the pharmacy benefit manager who are dispensing controlled substances, dangerous drugs, or dangerous devices to residents of this state.(iii)The designated pharmacy benefits management representative by location.(B) This information shall be made disclosed on an annual basis and within 30 days after any change of office, corporate officer, partner, or pharmacist.(b) Upon approval by the board and the payment of the required fee, the board shall issue a license to the applicant.(c)(1)Each place of business of a pharmacy benefit manager in California shall be supervised and managed by a designated pharmacy benefits management representative. The designated pharmacy benefits management representative shall be responsible for the pharmacy benefit managers compliance with state and federal laws.(2)As part of its initial application for a license, and for each renewal, each pharmacy benefit manager shall, on a form designed by the board, provide identifying information and the California license number for a designated pharmacy benefits management representative or pharmacist proposed to serve as the designated representative-in-charge.(3)The board shall not issue or renew a pharmacy benefit manager license without identification of an approved designated pharmacy benefits management representative.(4)The designated pharmacy benefits management representative shall maintain an active license as a designated pharmacy benefits management representative with the board at all times during which he or she is designated as the designated pharmacy benefits management representative.(d)A pharmacy benefit manager shall notify the board in writing, on a form designed by the board, within 30 days of the date when a designated pharmacy benefits management representative ceases to act as the designated pharmacy benefits management representative, and shall on the same form propose another designated pharmacy benefits management representative or pharmacist to take over as the designated pharmacy benefits management representative.(e)(1)The board may issue a temporary license, upon conditions and for periods of time as the board determines to be in the public interest. A temporary license fee shall be required in an amount established by the board as specified in subdivision (z) of Section 4400.(2)When needed to protect public safety, a temporary license may be issued for a period not to exceed 180 days, subject to terms and conditions that the board deems necessary.(3)If the board determines that a temporary license was issued by mistake or denies the application for a permanent license, the temporary license shall terminate upon either personal service of the notice of termination upon the licenseholder or service by certified mail, return receipt requested, at the licenseholders address of record with the board, whichever occurs first.(4)Neither for purposes of retaining a temporary license, nor for purposes of any disciplinary or license denial proceeding before the board, shall the temporary licenseholder be deemed to have a vested property right or interest in the license.
4427. (a) (1) A person or entity shall not act as pharmacy benefit manager for any dangerous drug or dangerous device unless he, she, or it has obtained a license from the board.
(2) (A) A pharmacy benefit manager shall disclose to the board the location, names, and titles of all of the following:
(i) Its agent for service of process in this state.
(ii) All pharmacists of the pharmacy benefit manager who are dispensing controlled substances, dangerous drugs, or dangerous devices to residents of this state.
(iii)The designated pharmacy benefits management representative by location.
(B) This information shall be made disclosed on an annual basis and within 30 days after any change of office, corporate officer, partner, or pharmacist.
(b) Upon approval by the board and the payment of the required fee, the board shall issue a license to the applicant.
(c)(1)Each place of business of a pharmacy benefit manager in California shall be supervised and managed by a designated pharmacy benefits management representative. The designated pharmacy benefits management representative shall be responsible for the pharmacy benefit managers compliance with state and federal laws.
(2)As part of its initial application for a license, and for each renewal, each pharmacy benefit manager shall, on a form designed by the board, provide identifying information and the California license number for a designated pharmacy benefits management representative or pharmacist proposed to serve as the designated representative-in-charge.
(3)The board shall not issue or renew a pharmacy benefit manager license without identification of an approved designated pharmacy benefits management representative.
(4)The designated pharmacy benefits management representative shall maintain an active license as a designated pharmacy benefits management representative with the board at all times during which he or she is designated as the designated pharmacy benefits management representative.
(d)A pharmacy benefit manager shall notify the board in writing, on a form designed by the board, within 30 days of the date when a designated pharmacy benefits management representative ceases to act as the designated pharmacy benefits management representative, and shall on the same form propose another designated pharmacy benefits management representative or pharmacist to take over as the designated pharmacy benefits management representative.
(e)(1)The board may issue a temporary license, upon conditions and for periods of time as the board determines to be in the public interest. A temporary license fee shall be required in an amount established by the board as specified in subdivision (z) of Section 4400.
(2)When needed to protect public safety, a temporary license may be issued for a period not to exceed 180 days, subject to terms and conditions that the board deems necessary.
(3)If the board determines that a temporary license was issued by mistake or denies the application for a permanent license, the temporary license shall terminate upon either personal service of the notice of termination upon the licenseholder or service by certified mail, return receipt requested, at the licenseholders address of record with the board, whichever occurs first.
(4)Neither for purposes of retaining a temporary license, nor for purposes of any disciplinary or license denial proceeding before the board, shall the temporary licenseholder be deemed to have a vested property right or interest in the license.
(a)A pharmacy benefit manager shall provide the information described in this section to the board, on an annual basis covering the contract year and in such form and manner as the board shall specify:
(1)For California residents whose prescription drug benefit is managed by the pharmacy benefit manager, the percentage of all oral prescriptions and self-administered drugs that were dispensed through pharmacies affiliated with the pharmacy benefit manager and the percentage of oral and self-administered drugs dispensed through retail pharmacies.
(2)The aggregate amount of discounts or price concessions (excluding bona fide service fees, which include, but are not limited to, distribution service fees, inventory management fees, product stocking allowances, and fees associated with administrative services agreements and patient care programs (such as medication compliance programs and patient education programs)) that the pharmacy benefit manager received from manufacturers of prescription drugs that were attributable to utilization by California residents whose prescription drug benefit was managed by a pharmacy benefit manager.
(3)The aggregate amount, and the type of rebates, discounts, or price concessions (excluding bona fide services, which include, but are not limited to, distribution service fees, inventory management fees, product stocking allowances, and fees associated with administrative service agreements and patient care programs (such as medication compliance programs and patient education programs)) provided to health care service plans, as defined in subdivision (f) of Section 1345 of the Health and Safety Code, and health insurers, as defined in subdivision (b) of Section 106 of the Insurance Code, and that are attributable to patient utilization under the plan, and the aggregate amount of the rebates, discounts, or price concessions that are passed through to enrollees and the total number of prescriptions dispensed.
(b)The board shall make the information provided by pharmacy benefit managers in subdivision (a) available as part of its annual report.
4429.4428. The board has the authority to enforce the provisions of this article, including the authority to adopt, amend, or repeal any rules and regulations, not inconsistent with the laws of this state, as may be necessary for the protection of the public and to implement this article.
4429.4428. The board has the authority to enforce the provisions of this article, including the authority to adopt, amend, or repeal any rules and regulations, not inconsistent with the laws of this state, as may be necessary for the protection of the public and to implement this article.
4429. This article shall not apply to the following:(a) A health care service plan or health insurer, if the health care service plan or health insurer offers or provides pharmacy benefit management services and if those services are offered or provided only to enrollees, subscribers, policyholders, or insureds who are also covered by health benefits offered or provided by that health care service plan or health insurer.(b) An affiliate, subsidiary, related entity or contracted medical groups of a health care service plan or health insurer that would otherwise qualify as a pharmacy benefit manager but offers or provides services only to enrollees, subscribers, policyholders, or insureds who are also covered by health benefits offered or provided by the health care service plan or health insurer.
4429. This article shall not apply to the following:
(a) A health care service plan or health insurer, if the health care service plan or health insurer offers or provides pharmacy benefit management services and if those services are offered or provided only to enrollees, subscribers, policyholders, or insureds who are also covered by health benefits offered or provided by that health care service plan or health insurer.
(b) An affiliate, subsidiary, related entity or contracted medical groups of a health care service plan or health insurer that would otherwise qualify as a pharmacy benefit manager but offers or provides services only to enrollees, subscribers, policyholders, or insureds who are also covered by health benefits offered or provided by the health care service plan or health insurer.
SEC. 7. Section 4430 of the Business and Professions Code is amended to read:4430. For purposes of this chapter, the following definitions shall apply:(a) Carrier means a health care service plan, as defined in Section 1345 of the Health and Safety Code, or a health insurer that issues policies of health insurance, as defined in Section 106 of the Insurance Code.(b) Clerical or recordkeeping error includes a typographical error, scriveners error, or computer error in a required document or record.(c) Extrapolation means the practice of inferring a frequency or dollar amount of overpayments, underpayments, nonvalid claims, or other errors on any portion of claims submitted, based on the frequency or dollar amount of overpayments, underpayments, nonvalid claims, or other errors actually measured in a sample of claims.(d) Health benefit plan means any plan or program that provides, arranges, pays for, or reimburses the cost of health benefits. Health benefit plan includes, but is not limited to, a health care service plan contract issued by a health care service plan, as defined in Section 1345 of the Health and Safety Code, and a policy of health insurance, as defined in Section 106 of the Insurance Code, issued by a health insurer.(e) Maximum allowable cost means the maximum amount that a pharmacy benefit manager will reimburse a pharmacy for the cost of a drug.(f) Maximum allowable cost list means a list of drugs for which a maximum allowable cost has been established by a pharmacy benefit manager.(g) Obsolete means a drug that may be listed in national drug pricing compendia but is no longer available to be dispensed based on the expiration date of the last lot manufactured.(h) Pharmacy has the same meaning as provided in Section 4037.(i) Pharmacy audit means an audit, either onsite or remotely, of any records of a pharmacy conducted by or on behalf of a carrier or a pharmacy benefits manager, or a representative thereof, for prescription drugs that were dispensed by that pharmacy to beneficiaries of a health benefit plan pursuant to a contract with the health benefit plan or the issuer or administrator thereof. Pharmacy audit does not include a concurrent review or desk audit that occurs within three business days of transmission of a claim, or a concurrent review or desk audit if a chargeback or recoupment is not demanded.(j) Pharmacy benefit manager means a person, business, or other entity that, pursuant to a contract or under an employment relationship with a carrier, health benefit plan sponsor, or other third-party payer, either directly or through an intermediary, manages the prescription drug coverage provided by the carrier, plan sponsor, or other third-party payer, including, but not limited to, the processing and payment of claims for prescription drugs, the performance of drug utilization review, the processing of drug prior authorization requests, the adjudication of appeals or grievances related to prescription drug coverage, contracting with network pharmacies, and controlling the cost of covered prescription drugs. described in Section 4037.5.
SEC. 7. Section 4430 of the Business and Professions Code is amended to read:
### SEC. 7.
4430. For purposes of this chapter, the following definitions shall apply:(a) Carrier means a health care service plan, as defined in Section 1345 of the Health and Safety Code, or a health insurer that issues policies of health insurance, as defined in Section 106 of the Insurance Code.(b) Clerical or recordkeeping error includes a typographical error, scriveners error, or computer error in a required document or record.(c) Extrapolation means the practice of inferring a frequency or dollar amount of overpayments, underpayments, nonvalid claims, or other errors on any portion of claims submitted, based on the frequency or dollar amount of overpayments, underpayments, nonvalid claims, or other errors actually measured in a sample of claims.(d) Health benefit plan means any plan or program that provides, arranges, pays for, or reimburses the cost of health benefits. Health benefit plan includes, but is not limited to, a health care service plan contract issued by a health care service plan, as defined in Section 1345 of the Health and Safety Code, and a policy of health insurance, as defined in Section 106 of the Insurance Code, issued by a health insurer.(e) Maximum allowable cost means the maximum amount that a pharmacy benefit manager will reimburse a pharmacy for the cost of a drug.(f) Maximum allowable cost list means a list of drugs for which a maximum allowable cost has been established by a pharmacy benefit manager.(g) Obsolete means a drug that may be listed in national drug pricing compendia but is no longer available to be dispensed based on the expiration date of the last lot manufactured.(h) Pharmacy has the same meaning as provided in Section 4037.(i) Pharmacy audit means an audit, either onsite or remotely, of any records of a pharmacy conducted by or on behalf of a carrier or a pharmacy benefits manager, or a representative thereof, for prescription drugs that were dispensed by that pharmacy to beneficiaries of a health benefit plan pursuant to a contract with the health benefit plan or the issuer or administrator thereof. Pharmacy audit does not include a concurrent review or desk audit that occurs within three business days of transmission of a claim, or a concurrent review or desk audit if a chargeback or recoupment is not demanded.(j) Pharmacy benefit manager means a person, business, or other entity that, pursuant to a contract or under an employment relationship with a carrier, health benefit plan sponsor, or other third-party payer, either directly or through an intermediary, manages the prescription drug coverage provided by the carrier, plan sponsor, or other third-party payer, including, but not limited to, the processing and payment of claims for prescription drugs, the performance of drug utilization review, the processing of drug prior authorization requests, the adjudication of appeals or grievances related to prescription drug coverage, contracting with network pharmacies, and controlling the cost of covered prescription drugs. described in Section 4037.5.
4430. For purposes of this chapter, the following definitions shall apply:(a) Carrier means a health care service plan, as defined in Section 1345 of the Health and Safety Code, or a health insurer that issues policies of health insurance, as defined in Section 106 of the Insurance Code.(b) Clerical or recordkeeping error includes a typographical error, scriveners error, or computer error in a required document or record.(c) Extrapolation means the practice of inferring a frequency or dollar amount of overpayments, underpayments, nonvalid claims, or other errors on any portion of claims submitted, based on the frequency or dollar amount of overpayments, underpayments, nonvalid claims, or other errors actually measured in a sample of claims.(d) Health benefit plan means any plan or program that provides, arranges, pays for, or reimburses the cost of health benefits. Health benefit plan includes, but is not limited to, a health care service plan contract issued by a health care service plan, as defined in Section 1345 of the Health and Safety Code, and a policy of health insurance, as defined in Section 106 of the Insurance Code, issued by a health insurer.(e) Maximum allowable cost means the maximum amount that a pharmacy benefit manager will reimburse a pharmacy for the cost of a drug.(f) Maximum allowable cost list means a list of drugs for which a maximum allowable cost has been established by a pharmacy benefit manager.(g) Obsolete means a drug that may be listed in national drug pricing compendia but is no longer available to be dispensed based on the expiration date of the last lot manufactured.(h) Pharmacy has the same meaning as provided in Section 4037.(i) Pharmacy audit means an audit, either onsite or remotely, of any records of a pharmacy conducted by or on behalf of a carrier or a pharmacy benefits manager, or a representative thereof, for prescription drugs that were dispensed by that pharmacy to beneficiaries of a health benefit plan pursuant to a contract with the health benefit plan or the issuer or administrator thereof. Pharmacy audit does not include a concurrent review or desk audit that occurs within three business days of transmission of a claim, or a concurrent review or desk audit if a chargeback or recoupment is not demanded.(j) Pharmacy benefit manager means a person, business, or other entity that, pursuant to a contract or under an employment relationship with a carrier, health benefit plan sponsor, or other third-party payer, either directly or through an intermediary, manages the prescription drug coverage provided by the carrier, plan sponsor, or other third-party payer, including, but not limited to, the processing and payment of claims for prescription drugs, the performance of drug utilization review, the processing of drug prior authorization requests, the adjudication of appeals or grievances related to prescription drug coverage, contracting with network pharmacies, and controlling the cost of covered prescription drugs. described in Section 4037.5.
4430. For purposes of this chapter, the following definitions shall apply:(a) Carrier means a health care service plan, as defined in Section 1345 of the Health and Safety Code, or a health insurer that issues policies of health insurance, as defined in Section 106 of the Insurance Code.(b) Clerical or recordkeeping error includes a typographical error, scriveners error, or computer error in a required document or record.(c) Extrapolation means the practice of inferring a frequency or dollar amount of overpayments, underpayments, nonvalid claims, or other errors on any portion of claims submitted, based on the frequency or dollar amount of overpayments, underpayments, nonvalid claims, or other errors actually measured in a sample of claims.(d) Health benefit plan means any plan or program that provides, arranges, pays for, or reimburses the cost of health benefits. Health benefit plan includes, but is not limited to, a health care service plan contract issued by a health care service plan, as defined in Section 1345 of the Health and Safety Code, and a policy of health insurance, as defined in Section 106 of the Insurance Code, issued by a health insurer.(e) Maximum allowable cost means the maximum amount that a pharmacy benefit manager will reimburse a pharmacy for the cost of a drug.(f) Maximum allowable cost list means a list of drugs for which a maximum allowable cost has been established by a pharmacy benefit manager.(g) Obsolete means a drug that may be listed in national drug pricing compendia but is no longer available to be dispensed based on the expiration date of the last lot manufactured.(h) Pharmacy has the same meaning as provided in Section 4037.(i) Pharmacy audit means an audit, either onsite or remotely, of any records of a pharmacy conducted by or on behalf of a carrier or a pharmacy benefits manager, or a representative thereof, for prescription drugs that were dispensed by that pharmacy to beneficiaries of a health benefit plan pursuant to a contract with the health benefit plan or the issuer or administrator thereof. Pharmacy audit does not include a concurrent review or desk audit that occurs within three business days of transmission of a claim, or a concurrent review or desk audit if a chargeback or recoupment is not demanded.(j) Pharmacy benefit manager means a person, business, or other entity that, pursuant to a contract or under an employment relationship with a carrier, health benefit plan sponsor, or other third-party payer, either directly or through an intermediary, manages the prescription drug coverage provided by the carrier, plan sponsor, or other third-party payer, including, but not limited to, the processing and payment of claims for prescription drugs, the performance of drug utilization review, the processing of drug prior authorization requests, the adjudication of appeals or grievances related to prescription drug coverage, contracting with network pharmacies, and controlling the cost of covered prescription drugs. described in Section 4037.5.
4430. For purposes of this chapter, the following definitions shall apply:
(a) Carrier means a health care service plan, as defined in Section 1345 of the Health and Safety Code, or a health insurer that issues policies of health insurance, as defined in Section 106 of the Insurance Code.
(b) Clerical or recordkeeping error includes a typographical error, scriveners error, or computer error in a required document or record.
(c) Extrapolation means the practice of inferring a frequency or dollar amount of overpayments, underpayments, nonvalid claims, or other errors on any portion of claims submitted, based on the frequency or dollar amount of overpayments, underpayments, nonvalid claims, or other errors actually measured in a sample of claims.
(d) Health benefit plan means any plan or program that provides, arranges, pays for, or reimburses the cost of health benefits. Health benefit plan includes, but is not limited to, a health care service plan contract issued by a health care service plan, as defined in Section 1345 of the Health and Safety Code, and a policy of health insurance, as defined in Section 106 of the Insurance Code, issued by a health insurer.
(e) Maximum allowable cost means the maximum amount that a pharmacy benefit manager will reimburse a pharmacy for the cost of a drug.
(f) Maximum allowable cost list means a list of drugs for which a maximum allowable cost has been established by a pharmacy benefit manager.
(g) Obsolete means a drug that may be listed in national drug pricing compendia but is no longer available to be dispensed based on the expiration date of the last lot manufactured.
(h) Pharmacy has the same meaning as provided in Section 4037.
(i) Pharmacy audit means an audit, either onsite or remotely, of any records of a pharmacy conducted by or on behalf of a carrier or a pharmacy benefits manager, or a representative thereof, for prescription drugs that were dispensed by that pharmacy to beneficiaries of a health benefit plan pursuant to a contract with the health benefit plan or the issuer or administrator thereof. Pharmacy audit does not include a concurrent review or desk audit that occurs within three business days of transmission of a claim, or a concurrent review or desk audit if a chargeback or recoupment is not demanded.
(j) Pharmacy benefit manager means a person, business, or other entity that, pursuant to a contract or under an employment relationship with a carrier, health benefit plan sponsor, or other third-party payer, either directly or through an intermediary, manages the prescription drug coverage provided by the carrier, plan sponsor, or other third-party payer, including, but not limited to, the processing and payment of claims for prescription drugs, the performance of drug utilization review, the processing of drug prior authorization requests, the adjudication of appeals or grievances related to prescription drug coverage, contracting with network pharmacies, and controlling the cost of covered prescription drugs. described in Section 4037.5.
SEC. 8. Chapter 9.6 (commencing with Section 4445) is added to Division 2 of the Business and Professions Code, to read: CHAPTER 9.6. Pharmacy Benefit Management4445. For the purposes of this chapter, the following definitions shall apply:(a) Labeler means a person or entity that receives prescription drugs from a manufacturer or wholesaler and repackages those drugs for later retail sale and who has a labeler code from the federal Food and Drug Administration under Section 207.20 of Title 21 of the Code of Federal Regulations.(b) Pharmacy benefit manager means a person, business, or entity described in Section 4037.5.(c) Proprietary information means trade secrets and information on pricing, costs, revenue, taxes, market share, negotiating strategies, customers, and personnel that is held by a private entity and used for that entitys business purposes.(d) Purchaser means health benefit plan sponsor or other third-party payer with whom a pharmacy benefit manager contracts to provide the administration and management of prescription drug benefits.4446. A pharmacy benefit manager has a fiduciary duty to a purchaser and shall discharge that duty in accordance with all applicable laws.4447. A pharmacy benefit manager shall notify a purchaser in writing of any activity, policy, or practice of the pharmacy benefit manager that directly or indirectly presents a conflict of interest that interferes with the discharge of the pharmacy benefit managers fiduciary duty to the purchaser.4448. (a) Beginning in the second fiscal quarter after the effective date of a contract between a pharmacy benefit manager and a purchaser, the pharmacy benefit manager shall, on a monthly basis, disclose the following information to the purchaser with respect to prescription product benefits specific to the purchaser:(1) The aggregate acquisition cost from a pharmaceutical manufacturer or labeler for each therapeutic class of drugs.(2) The aggregate amount of rebates received by the pharmacy benefit manager for each therapeutic class of drugs. The aggregate amount of rebates shall include any utilization discounts the pharmacy benefit manager receives from a pharmaceutical manufacturer or labeler.(3) Any administrative fees received from a pharmaceutical manufacturer or labeler.(4) The aggregate of rates negotiated by the pharmacy benefit manager with pharmacies with respect to each therapeutic class of drug.(5) Prescription drug utilization information for the purchasers enrollees or insureds that is not specific to any individual enrollee or insured.(b) The information disclosed pursuant to subdivision (a) shall include all retail, mail order, specialty, and compounded prescription products.(c) For the purposes of subdivision (a), a therapeutic class shall include at least two drugs. If there are fewer than two drugs in a therapeutic class, the information required by subdivision (a) shall be reported by therapeutic category.4449. Except for utilization information, a pharmacy benefit manager need not make the disclosures required by Section 4448 unless and until the purchaser agrees, in writing, to maintain as confidential any proprietary information.4450. This article shall apply to a contract or a contractual relationship between a pharmacy benefit manager and a purchaser that is entered into, issued, amended, renewed, or delivered on or after January 1, 2018.4451. This article shall not apply to the following:(a) A health care service plan or health insurer, if the health care service plan or health insurer offers or provides pharmacy benefit management services and if those services are offered or provided only to enrollees, subscribers, policyholders, or insureds who are also covered by health benefits offered or provided by that health care service plan or health insurer.(b) An affiliate, subsidiary, related entity, or contracted medical groups of a health care service plan or health insurer that would otherwise qualify as a pharmacy benefit manager but offers or provides services only to enrollees, subscribers, policyholders, or insureds who are also covered by health benefits offered or provided by the health care service plan or health insurer.
SEC. 8. Chapter 9.6 (commencing with Section 4445) is added to Division 2 of the Business and Professions Code, to read:
### SEC. 8.
CHAPTER 9.6. Pharmacy Benefit Management4445. For the purposes of this chapter, the following definitions shall apply:(a) Labeler means a person or entity that receives prescription drugs from a manufacturer or wholesaler and repackages those drugs for later retail sale and who has a labeler code from the federal Food and Drug Administration under Section 207.20 of Title 21 of the Code of Federal Regulations.(b) Pharmacy benefit manager means a person, business, or entity described in Section 4037.5.(c) Proprietary information means trade secrets and information on pricing, costs, revenue, taxes, market share, negotiating strategies, customers, and personnel that is held by a private entity and used for that entitys business purposes.(d) Purchaser means health benefit plan sponsor or other third-party payer with whom a pharmacy benefit manager contracts to provide the administration and management of prescription drug benefits.4446. A pharmacy benefit manager has a fiduciary duty to a purchaser and shall discharge that duty in accordance with all applicable laws.4447. A pharmacy benefit manager shall notify a purchaser in writing of any activity, policy, or practice of the pharmacy benefit manager that directly or indirectly presents a conflict of interest that interferes with the discharge of the pharmacy benefit managers fiduciary duty to the purchaser.4448. (a) Beginning in the second fiscal quarter after the effective date of a contract between a pharmacy benefit manager and a purchaser, the pharmacy benefit manager shall, on a monthly basis, disclose the following information to the purchaser with respect to prescription product benefits specific to the purchaser:(1) The aggregate acquisition cost from a pharmaceutical manufacturer or labeler for each therapeutic class of drugs.(2) The aggregate amount of rebates received by the pharmacy benefit manager for each therapeutic class of drugs. The aggregate amount of rebates shall include any utilization discounts the pharmacy benefit manager receives from a pharmaceutical manufacturer or labeler.(3) Any administrative fees received from a pharmaceutical manufacturer or labeler.(4) The aggregate of rates negotiated by the pharmacy benefit manager with pharmacies with respect to each therapeutic class of drug.(5) Prescription drug utilization information for the purchasers enrollees or insureds that is not specific to any individual enrollee or insured.(b) The information disclosed pursuant to subdivision (a) shall include all retail, mail order, specialty, and compounded prescription products.(c) For the purposes of subdivision (a), a therapeutic class shall include at least two drugs. If there are fewer than two drugs in a therapeutic class, the information required by subdivision (a) shall be reported by therapeutic category.4449. Except for utilization information, a pharmacy benefit manager need not make the disclosures required by Section 4448 unless and until the purchaser agrees, in writing, to maintain as confidential any proprietary information.4450. This article shall apply to a contract or a contractual relationship between a pharmacy benefit manager and a purchaser that is entered into, issued, amended, renewed, or delivered on or after January 1, 2018.4451. This article shall not apply to the following:(a) A health care service plan or health insurer, if the health care service plan or health insurer offers or provides pharmacy benefit management services and if those services are offered or provided only to enrollees, subscribers, policyholders, or insureds who are also covered by health benefits offered or provided by that health care service plan or health insurer.(b) An affiliate, subsidiary, related entity, or contracted medical groups of a health care service plan or health insurer that would otherwise qualify as a pharmacy benefit manager but offers or provides services only to enrollees, subscribers, policyholders, or insureds who are also covered by health benefits offered or provided by the health care service plan or health insurer.
CHAPTER 9.6. Pharmacy Benefit Management4445. For the purposes of this chapter, the following definitions shall apply:(a) Labeler means a person or entity that receives prescription drugs from a manufacturer or wholesaler and repackages those drugs for later retail sale and who has a labeler code from the federal Food and Drug Administration under Section 207.20 of Title 21 of the Code of Federal Regulations.(b) Pharmacy benefit manager means a person, business, or entity described in Section 4037.5.(c) Proprietary information means trade secrets and information on pricing, costs, revenue, taxes, market share, negotiating strategies, customers, and personnel that is held by a private entity and used for that entitys business purposes.(d) Purchaser means health benefit plan sponsor or other third-party payer with whom a pharmacy benefit manager contracts to provide the administration and management of prescription drug benefits.4446. A pharmacy benefit manager has a fiduciary duty to a purchaser and shall discharge that duty in accordance with all applicable laws.4447. A pharmacy benefit manager shall notify a purchaser in writing of any activity, policy, or practice of the pharmacy benefit manager that directly or indirectly presents a conflict of interest that interferes with the discharge of the pharmacy benefit managers fiduciary duty to the purchaser.4448. (a) Beginning in the second fiscal quarter after the effective date of a contract between a pharmacy benefit manager and a purchaser, the pharmacy benefit manager shall, on a monthly basis, disclose the following information to the purchaser with respect to prescription product benefits specific to the purchaser:(1) The aggregate acquisition cost from a pharmaceutical manufacturer or labeler for each therapeutic class of drugs.(2) The aggregate amount of rebates received by the pharmacy benefit manager for each therapeutic class of drugs. The aggregate amount of rebates shall include any utilization discounts the pharmacy benefit manager receives from a pharmaceutical manufacturer or labeler.(3) Any administrative fees received from a pharmaceutical manufacturer or labeler.(4) The aggregate of rates negotiated by the pharmacy benefit manager with pharmacies with respect to each therapeutic class of drug.(5) Prescription drug utilization information for the purchasers enrollees or insureds that is not specific to any individual enrollee or insured.(b) The information disclosed pursuant to subdivision (a) shall include all retail, mail order, specialty, and compounded prescription products.(c) For the purposes of subdivision (a), a therapeutic class shall include at least two drugs. If there are fewer than two drugs in a therapeutic class, the information required by subdivision (a) shall be reported by therapeutic category.4449. Except for utilization information, a pharmacy benefit manager need not make the disclosures required by Section 4448 unless and until the purchaser agrees, in writing, to maintain as confidential any proprietary information.4450. This article shall apply to a contract or a contractual relationship between a pharmacy benefit manager and a purchaser that is entered into, issued, amended, renewed, or delivered on or after January 1, 2018.4451. This article shall not apply to the following:(a) A health care service plan or health insurer, if the health care service plan or health insurer offers or provides pharmacy benefit management services and if those services are offered or provided only to enrollees, subscribers, policyholders, or insureds who are also covered by health benefits offered or provided by that health care service plan or health insurer.(b) An affiliate, subsidiary, related entity, or contracted medical groups of a health care service plan or health insurer that would otherwise qualify as a pharmacy benefit manager but offers or provides services only to enrollees, subscribers, policyholders, or insureds who are also covered by health benefits offered or provided by the health care service plan or health insurer.
CHAPTER 9.6. Pharmacy Benefit Management
CHAPTER 9.6. Pharmacy Benefit Management
4445. For the purposes of this chapter, the following definitions shall apply:(a) Labeler means a person or entity that receives prescription drugs from a manufacturer or wholesaler and repackages those drugs for later retail sale and who has a labeler code from the federal Food and Drug Administration under Section 207.20 of Title 21 of the Code of Federal Regulations.(b) Pharmacy benefit manager means a person, business, or entity described in Section 4037.5.(c) Proprietary information means trade secrets and information on pricing, costs, revenue, taxes, market share, negotiating strategies, customers, and personnel that is held by a private entity and used for that entitys business purposes.(d) Purchaser means health benefit plan sponsor or other third-party payer with whom a pharmacy benefit manager contracts to provide the administration and management of prescription drug benefits.
4445. For the purposes of this chapter, the following definitions shall apply:
(a) Labeler means a person or entity that receives prescription drugs from a manufacturer or wholesaler and repackages those drugs for later retail sale and who has a labeler code from the federal Food and Drug Administration under Section 207.20 of Title 21 of the Code of Federal Regulations.
(b) Pharmacy benefit manager means a person, business, or entity described in Section 4037.5.
(c) Proprietary information means trade secrets and information on pricing, costs, revenue, taxes, market share, negotiating strategies, customers, and personnel that is held by a private entity and used for that entitys business purposes.
(d) Purchaser means health benefit plan sponsor or other third-party payer with whom a pharmacy benefit manager contracts to provide the administration and management of prescription drug benefits.
4446. A pharmacy benefit manager has a fiduciary duty to a purchaser and shall discharge that duty in accordance with all applicable laws.
4446. A pharmacy benefit manager has a fiduciary duty to a purchaser and shall discharge that duty in accordance with all applicable laws.
4447. A pharmacy benefit manager shall notify a purchaser in writing of any activity, policy, or practice of the pharmacy benefit manager that directly or indirectly presents a conflict of interest that interferes with the discharge of the pharmacy benefit managers fiduciary duty to the purchaser.
4447. A pharmacy benefit manager shall notify a purchaser in writing of any activity, policy, or practice of the pharmacy benefit manager that directly or indirectly presents a conflict of interest that interferes with the discharge of the pharmacy benefit managers fiduciary duty to the purchaser.
4448. (a) Beginning in the second fiscal quarter after the effective date of a contract between a pharmacy benefit manager and a purchaser, the pharmacy benefit manager shall, on a monthly basis, disclose the following information to the purchaser with respect to prescription product benefits specific to the purchaser:(1) The aggregate acquisition cost from a pharmaceutical manufacturer or labeler for each therapeutic class of drugs.(2) The aggregate amount of rebates received by the pharmacy benefit manager for each therapeutic class of drugs. The aggregate amount of rebates shall include any utilization discounts the pharmacy benefit manager receives from a pharmaceutical manufacturer or labeler.(3) Any administrative fees received from a pharmaceutical manufacturer or labeler.(4) The aggregate of rates negotiated by the pharmacy benefit manager with pharmacies with respect to each therapeutic class of drug.(5) Prescription drug utilization information for the purchasers enrollees or insureds that is not specific to any individual enrollee or insured.(b) The information disclosed pursuant to subdivision (a) shall include all retail, mail order, specialty, and compounded prescription products.(c) For the purposes of subdivision (a), a therapeutic class shall include at least two drugs. If there are fewer than two drugs in a therapeutic class, the information required by subdivision (a) shall be reported by therapeutic category.
4448. (a) Beginning in the second fiscal quarter after the effective date of a contract between a pharmacy benefit manager and a purchaser, the pharmacy benefit manager shall, on a monthly basis, disclose the following information to the purchaser with respect to prescription product benefits specific to the purchaser:
(1) The aggregate acquisition cost from a pharmaceutical manufacturer or labeler for each therapeutic class of drugs.
(2) The aggregate amount of rebates received by the pharmacy benefit manager for each therapeutic class of drugs. The aggregate amount of rebates shall include any utilization discounts the pharmacy benefit manager receives from a pharmaceutical manufacturer or labeler.
(3) Any administrative fees received from a pharmaceutical manufacturer or labeler.
(4) The aggregate of rates negotiated by the pharmacy benefit manager with pharmacies with respect to each therapeutic class of drug.
(5) Prescription drug utilization information for the purchasers enrollees or insureds that is not specific to any individual enrollee or insured.
(b) The information disclosed pursuant to subdivision (a) shall include all retail, mail order, specialty, and compounded prescription products.
(c) For the purposes of subdivision (a), a therapeutic class shall include at least two drugs. If there are fewer than two drugs in a therapeutic class, the information required by subdivision (a) shall be reported by therapeutic category.
4449. Except for utilization information, a pharmacy benefit manager need not make the disclosures required by Section 4448 unless and until the purchaser agrees, in writing, to maintain as confidential any proprietary information.
4449. Except for utilization information, a pharmacy benefit manager need not make the disclosures required by Section 4448 unless and until the purchaser agrees, in writing, to maintain as confidential any proprietary information.
4450. This article shall apply to a contract or a contractual relationship between a pharmacy benefit manager and a purchaser that is entered into, issued, amended, renewed, or delivered on or after January 1, 2018.
4450. This article shall apply to a contract or a contractual relationship between a pharmacy benefit manager and a purchaser that is entered into, issued, amended, renewed, or delivered on or after January 1, 2018.
4451. This article shall not apply to the following:(a) A health care service plan or health insurer, if the health care service plan or health insurer offers or provides pharmacy benefit management services and if those services are offered or provided only to enrollees, subscribers, policyholders, or insureds who are also covered by health benefits offered or provided by that health care service plan or health insurer.(b) An affiliate, subsidiary, related entity, or contracted medical groups of a health care service plan or health insurer that would otherwise qualify as a pharmacy benefit manager but offers or provides services only to enrollees, subscribers, policyholders, or insureds who are also covered by health benefits offered or provided by the health care service plan or health insurer.
4451. This article shall not apply to the following:
(a) A health care service plan or health insurer, if the health care service plan or health insurer offers or provides pharmacy benefit management services and if those services are offered or provided only to enrollees, subscribers, policyholders, or insureds who are also covered by health benefits offered or provided by that health care service plan or health insurer.
(b) An affiliate, subsidiary, related entity, or contracted medical groups of a health care service plan or health insurer that would otherwise qualify as a pharmacy benefit manager but offers or provides services only to enrollees, subscribers, policyholders, or insureds who are also covered by health benefits offered or provided by the health care service plan or health insurer.
SEC. 9. No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.
SEC. 9. No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.
SEC. 9. No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.
### SEC. 9.