General Assembly Raised Bill No. 7124
January Session, 2017 LCO No. 4229
*04229_______INS*
Referred to Committee on INSURANCE AND REAL ESTATE
Introduced by:
(INS)
General Assembly
Raised Bill No. 7124
January Session, 2017
LCO No. 4229
*04229_______INS*
Referred to Committee on INSURANCE AND REAL ESTATE
Introduced by:
(INS)
AN ACT CONCERNING MAXIMUM ALLOWABLE COST LISTS AND DISCLOSURES BY PHARMACY BENEFIT MANAGERS.
Be it enacted by the Senate and House of Representatives in General Assembly convened:
Section 1. (NEW) (Effective October 1, 2017) (a) As used in this section, (1) "maximum allowable cost" means the maximum amount a pharmacy benefits manager will reimburse a pharmacy for a prescription drug, and (2) "maximum allowable cost list" means a list of prescription drugs for which a maximum allowable cost has been established by a pharmacy benefits manager.
(b) (1) Each pharmacy benefits manager shall, prior to placing a prescription drug on a maximum allowable cost list, ensure that such drug (A) (i) has been designated as therapeutically equivalent to other pharmaceutically equivalent products with an "A" code or "B" code in the most recent edition or supplement of the federal Food and Drug Administration's Approved Drug Products with Therapeutic Equivalence Evaluations, or (ii) has an "NR" rating, "NA" rating or similar rating by a nationally recognized pricing reference, and (B) (i) is available for purchase by pharmacies in this state from national or regional wholesalers, and (ii) is not obsolete or temporarily unavailable. As used in this subparagraph, "obsolete" means a prescription drug that may be listed in national drug pricing compendia but is no longer actively marketed by the manufacturer or labeler.
(2) Each pharmacy benefits manager shall remove a prescription drug from a maximum allowable cost list not later than three business days after (A) the prescription drug no longer meets the requirements in subdivision (1) of this subsection, or (B) the pharmacy benefits manager becomes aware that such drug no longer meets the requirements in subdivision (1) of this subsection.
(c) Each contract entered into, renewed or amended on or after October 1, 2017, between a pharmacy benefits manager and a pharmacy or a pharmacy's contracting representative or agent shall disclose the sources used by the pharmacy benefits manager to determine the maximum allowable costs for prescription drugs on each maximum allowable cost list for such pharmacy.
(d) Each pharmacy benefits manager shall:
(1) Provide an updated maximum allowable cost list to a plan sponsor whenever there is a change to any such list under such plan;
(2) Update each maximum allowable cost list at least every seven calendar days and promptly notify and make available to each in-network pharmacy any updated list applicable to such pharmacy; and
(3) Establish an appeals process for a pharmacy to contest the maximum allowable cost of a prescription drug in accordance with the provisions of subsection (e) of this section. Each pharmacy benefits manager shall provide to each in-network pharmacy information concerning the appeals process.
(e) (1) A pharmacy may contest the maximum allowable cost of a prescription drug based on one or both of the following grounds:
(A) The prescription drug does not meet the requirements in subdivision (1) of subsection (b) of this section; or
(B) The maximum allowable cost established by the pharmacy benefits manager for the prescription drug is below the cost at which such drug is available for purchase from national or regional wholesalers.
(2) A pharmacy contesting the maximum allowable cost of a prescription drug shall file an appeal with the pharmacy benefits manager not later than sixty calendar days after filing its submission for the initial claim for reimbursement for such drug. The pharmacy benefits manager shall investigate and issue a determination of such appeal not later than seven calendar days after such manager receives such appeal.
(A) If the pharmacy benefits manager determines the appeal is denied, such manager shall provide to the pharmacy the reason for the denial and the national drug code of a therapeutically equivalent prescription drug that is available for purchase by pharmacies in this state from national or regional wholesalers at a price that is equal to or less than the maximum allowable cost for the prescription drug that is the subject of the appeal.
(B) If the pharmacy benefits manager determines the appeal is valid, such manager shall (i) adjust the maximum allowable cost for such prescription drug, and (ii) adjust such maximum allowable cost for the appealing pharmacy not later than five business days after making such determination.
Sec. 2. Section 38a-479aaa of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2017):
As used in this section and sections 38a-479bbb to 38a-479iii, inclusive, and section 1 of this act:
(1) "Commissioner" means the Insurance Commissioner;
(2) "Department" means the Insurance Department;
(3) "Drug" means drug, as defined in section 21a-92;
(4) "Person" means person, as defined in section 38a-1;
(5) "Pharmacist services" includes (A) drug therapy and other patient care services provided by a licensed pharmacist intended to achieve outcomes related to the cure or prevention of a disease, elimination or reduction of a patient's symptoms, and (B) education or intervention by a licensed pharmacist intended to arrest or slow a disease process;
(6) "Pharmacist" means an individual licensed to practice pharmacy under section 20-590, 20-591, 20-592 or 20-593, and who is thereby recognized as a health care provider by the state of Connecticut;
(7) "Pharmacy" means a place of business where drugs may be sold at retail and for which a pharmacy license has been issued to an applicant pursuant to section 20-594; and
(8) "Pharmacy benefits manager" or "manager" means any person that administers the prescription drug, prescription device, pharmacist services or prescription drug and device and pharmacist services portion of a health benefit plan on behalf of plan sponsors such as self-insured employers, insurance companies, labor unions and health care centers.
Sec. 3. Section 38a-479hhh of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2017):
(a) The commissioner may conduct investigations and hold hearings on any matter under the provisions of sections 38a-479aaa to 38a-479iii, inclusive, as amended by this act, or section 1 of this act. The commissioner may issue subpoenas, administer oaths, compel testimony and order the production of books, records and documents. If any person refuses to appear, to testify or to produce any book, record, paper or document when so ordered, upon application of the commissioner, a judge of the Superior Court may make such order as may be appropriate to aid in the enforcement of this section.
(b) Any person aggrieved by an order or decision of the commissioner under sections 38a-479aaa to 38a-479iii, inclusive, as amended by this act, or section 1 of this act may appeal therefrom in accordance with the provisions of section 4-183.
This act shall take effect as follows and shall amend the following sections:
Section 1 October 1, 2017 New section
Sec. 2 October 1, 2017 38a-479aaa
Sec. 3 October 1, 2017 38a-479hhh
This act shall take effect as follows and shall amend the following sections:
Section 1
October 1, 2017
New section
Sec. 2
October 1, 2017
38a-479aaa
Sec. 3
October 1, 2017
38a-479hhh
Statement of Purpose:
To require that pharmacy benefits managers disclose information regarding the maximum allowable cost of prescription drugs and establish procedures concerning maximum allowable cost lists.
[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not underlined.]