Illinois 2023-2024 Regular Session

Illinois House Bill HB3631 Compare Versions

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1-Public Act 103-0453
21 HB3631 EnrolledLRB103 30054 BMS 56477 b HB3631 Enrolled LRB103 30054 BMS 56477 b
32 HB3631 Enrolled LRB103 30054 BMS 56477 b
4-AN ACT concerning regulation.
5-Be it enacted by the People of the State of Illinois,
6-represented in the General Assembly:
7-Section 5. The Illinois Insurance Code is amended by
8-changing Section 513b1 as follows:
9-(215 ILCS 5/513b1)
10-Sec. 513b1. Pharmacy benefit manager contracts.
11-(a) As used in this Section:
12-"340B drug discount program" means the program established
13-under Section 340B of the federal Public Health Service Act,
14-42 U.S.C. 256b.
15-"340B entity" means a covered entity as defined in 42
16-U.S.C. 256b(a)(4) authorized to participate in the 340B drug
17-discount program.
18-"340B pharmacy" means any pharmacy used to dispense 340B
19-drugs for a covered entity, whether entity-owned or external.
20-"Biological product" has the meaning ascribed to that term
21-in Section 19.5 of the Pharmacy Practice Act.
22-"Maximum allowable cost" means the maximum amount that a
23-pharmacy benefit manager will reimburse a pharmacy for the
24-cost of a drug.
25-"Maximum allowable cost list" means a list of drugs for
26-which a maximum allowable cost has been established by a
3+1 AN ACT concerning regulation.
4+2 Be it enacted by the People of the State of Illinois,
5+3 represented in the General Assembly:
6+4 Section 5. The Illinois Insurance Code is amended by
7+5 changing Section 513b1 as follows:
8+6 (215 ILCS 5/513b1)
9+7 Sec. 513b1. Pharmacy benefit manager contracts.
10+8 (a) As used in this Section:
11+9 "340B drug discount program" means the program established
12+10 under Section 340B of the federal Public Health Service Act,
13+11 42 U.S.C. 256b.
14+12 "340B entity" means a covered entity as defined in 42
15+13 U.S.C. 256b(a)(4) authorized to participate in the 340B drug
16+14 discount program.
17+15 "340B pharmacy" means any pharmacy used to dispense 340B
18+16 drugs for a covered entity, whether entity-owned or external.
19+17 "Biological product" has the meaning ascribed to that term
20+18 in Section 19.5 of the Pharmacy Practice Act.
21+19 "Maximum allowable cost" means the maximum amount that a
22+20 pharmacy benefit manager will reimburse a pharmacy for the
23+21 cost of a drug.
24+22 "Maximum allowable cost list" means a list of drugs for
25+23 which a maximum allowable cost has been established by a
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33-pharmacy benefit manager.
34-"Pharmacy benefit manager" means a person, business, or
35-entity, including a wholly or partially owned or controlled
36-subsidiary of a pharmacy benefit manager, that provides claims
37-processing services or other prescription drug or device
38-services, or both, for health benefit plans.
39-"Retail price" means the price an individual without
40-prescription drug coverage would pay at a retail pharmacy, not
41-including a pharmacist dispensing fee.
42-"Third-party payer" means any entity that pays for
43-prescription drugs on behalf of a patient other than a health
44-care provider or sponsor of a plan subject to regulation under
45-Medicare Part D, 42 U.S.C. 1395w-101, et seq.
46-(b) A contract between a health insurer and a pharmacy
47-benefit manager must require that the pharmacy benefit
48-manager:
49-(1) Update maximum allowable cost pricing information
50-at least every 7 calendar days.
51-(2) Maintain a process that will, in a timely manner,
52-eliminate drugs from maximum allowable cost lists or
53-modify drug prices to remain consistent with changes in
54-pricing data used in formulating maximum allowable cost
55-prices and product availability.
56-(3) Provide access to its maximum allowable cost list
57-to each pharmacy or pharmacy services administrative
58-organization subject to the maximum allowable cost list.
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33+ HB3631 Enrolled - 2 - LRB103 30054 BMS 56477 b
34+1 pharmacy benefit manager.
35+2 "Pharmacy benefit manager" means a person, business, or
36+3 entity, including a wholly or partially owned or controlled
37+4 subsidiary of a pharmacy benefit manager, that provides claims
38+5 processing services or other prescription drug or device
39+6 services, or both, for health benefit plans.
40+7 "Retail price" means the price an individual without
41+8 prescription drug coverage would pay at a retail pharmacy, not
42+9 including a pharmacist dispensing fee.
43+10 "Third-party payer" means any entity that pays for
44+11 prescription drugs on behalf of a patient other than a health
45+12 care provider or sponsor of a plan subject to regulation under
46+13 Medicare Part D, 42 U.S.C. 1395w-101, et seq.
47+14 (b) A contract between a health insurer and a pharmacy
48+15 benefit manager must require that the pharmacy benefit
49+16 manager:
50+17 (1) Update maximum allowable cost pricing information
51+18 at least every 7 calendar days.
52+19 (2) Maintain a process that will, in a timely manner,
53+20 eliminate drugs from maximum allowable cost lists or
54+21 modify drug prices to remain consistent with changes in
55+22 pricing data used in formulating maximum allowable cost
56+23 prices and product availability.
57+24 (3) Provide access to its maximum allowable cost list
58+25 to each pharmacy or pharmacy services administrative
59+26 organization subject to the maximum allowable cost list.
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61-Access may include a real-time pharmacy website portal to
62-be able to view the maximum allowable cost list. As used in
63-this Section, "pharmacy services administrative
64-organization" means an entity operating within the State
65-that contracts with independent pharmacies to conduct
66-business on their behalf with third-party payers. A
67-pharmacy services administrative organization may provide
68-administrative services to pharmacies and negotiate and
69-enter into contracts with third-party payers or pharmacy
70-benefit managers on behalf of pharmacies.
71-(4) Provide a process by which a contracted pharmacy
72-can appeal the provider's reimbursement for a drug subject
73-to maximum allowable cost pricing. The appeals process
74-must, at a minimum, include the following:
75-(A) A requirement that a contracted pharmacy has
76-14 calendar days after the applicable fill date to
77-appeal a maximum allowable cost if the reimbursement
78-for the drug is less than the net amount that the
79-network provider paid to the supplier of the drug.
80-(B) A requirement that a pharmacy benefit manager
81-must respond to a challenge within 14 calendar days of
82-the contracted pharmacy making the claim for which the
83-appeal has been submitted.
84-(C) A telephone number and e-mail address or
85-website to network providers, at which the provider
86-can contact the pharmacy benefit manager to process
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89-and submit an appeal.
90-(D) A requirement that, if an appeal is denied,
91-the pharmacy benefit manager must provide the reason
92-for the denial and the name and the national drug code
93-number from national or regional wholesalers.
94-(E) A requirement that, if an appeal is sustained,
95-the pharmacy benefit manager must make an adjustment
96-in the drug price effective the date the challenge is
97-resolved and make the adjustment applicable to all
98-similarly situated network pharmacy providers, as
99-determined by the managed care organization or
100-pharmacy benefit manager.
101-(5) Allow a plan sponsor contracting with a pharmacy
102-benefit manager an annual right to audit compliance with
103-the terms of the contract by the pharmacy benefit manager,
104-including, but not limited to, full disclosure of any and
105-all rebate amounts secured, whether product specific or
106-generalized rebates, that were provided to the pharmacy
107-benefit manager by a pharmaceutical manufacturer.
108-(6) Allow a plan sponsor contracting with a pharmacy
109-benefit manager to request that the pharmacy benefit
110-manager disclose the actual amounts paid by the pharmacy
111-benefit manager to the pharmacy.
112-(7) Provide notice to the party contracting with the
113-pharmacy benefit manager of any consideration that the
114-pharmacy benefit manager receives from the manufacturer
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117-for dispense as written prescriptions once a generic or
118-biologically similar product becomes available.
119-(c) In order to place a particular prescription drug on a
120-maximum allowable cost list, the pharmacy benefit manager
121-must, at a minimum, ensure that:
122-(1) if the drug is a generically equivalent drug, it
123-is listed as therapeutically equivalent and
124-pharmaceutically equivalent "A" or "B" rated in the United
125-States Food and Drug Administration's most recent version
126-of the "Orange Book" or have an NR or NA rating by
127-Medi-Span, Gold Standard, or a similar rating by a
128-nationally recognized reference;
129-(2) the drug is available for purchase by each
130-pharmacy in the State from national or regional
131-wholesalers operating in Illinois; and
132-(3) the drug is not obsolete.
133-(d) A pharmacy benefit manager is prohibited from limiting
134-a pharmacist's ability to disclose whether the cost-sharing
135-obligation exceeds the retail price for a covered prescription
136-drug, and the availability of a more affordable alternative
137-drug, if one is available in accordance with Section 42 of the
138-Pharmacy Practice Act.
139-(e) A health insurer or pharmacy benefit manager shall not
140-require an insured to make a payment for a prescription drug at
141-the point of sale in an amount that exceeds the lesser of:
142-(1) the applicable cost-sharing amount; or
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70+1 Access may include a real-time pharmacy website portal to
71+2 be able to view the maximum allowable cost list. As used in
72+3 this Section, "pharmacy services administrative
73+4 organization" means an entity operating within the State
74+5 that contracts with independent pharmacies to conduct
75+6 business on their behalf with third-party payers. A
76+7 pharmacy services administrative organization may provide
77+8 administrative services to pharmacies and negotiate and
78+9 enter into contracts with third-party payers or pharmacy
79+10 benefit managers on behalf of pharmacies.
80+11 (4) Provide a process by which a contracted pharmacy
81+12 can appeal the provider's reimbursement for a drug subject
82+13 to maximum allowable cost pricing. The appeals process
83+14 must, at a minimum, include the following:
84+15 (A) A requirement that a contracted pharmacy has
85+16 14 calendar days after the applicable fill date to
86+17 appeal a maximum allowable cost if the reimbursement
87+18 for the drug is less than the net amount that the
88+19 network provider paid to the supplier of the drug.
89+20 (B) A requirement that a pharmacy benefit manager
90+21 must respond to a challenge within 14 calendar days of
91+22 the contracted pharmacy making the claim for which the
92+23 appeal has been submitted.
93+24 (C) A telephone number and e-mail address or
94+25 website to network providers, at which the provider
95+26 can contact the pharmacy benefit manager to process
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145-(2) the retail price of the drug in the absence of
146-prescription drug coverage.
147-(f) Unless required by law, a contract between a pharmacy
148-benefit manager or third-party payer and a 340B entity or 340B
149-pharmacy shall not contain any provision that:
150-(1) distinguishes between drugs purchased through the
151-340B drug discount program and other drugs when
152-determining reimbursement or reimbursement methodologies,
153-or contains otherwise less favorable payment terms or
154-reimbursement methodologies for 340B entities or 340B
155-pharmacies when compared to similarly situated non-340B
156-entities;
157-(2) imposes any fee, chargeback, or rate adjustment
158-that is not similarly imposed on similarly situated
159-pharmacies that are not 340B entities or 340B pharmacies;
160-(3) imposes any fee, chargeback, or rate adjustment
161-that exceeds the fee, chargeback, or rate adjustment that
162-is not similarly imposed on similarly situated pharmacies
163-that are not 340B entities or 340B pharmacies;
164-(4) prevents or interferes with an individual's choice
165-to receive a covered prescription drug from a 340B entity
166-or 340B pharmacy through any legally permissible means,
167-except that nothing in this paragraph shall prohibit the
168-establishment of differing copayments or other
169-cost-sharing amounts within the benefit plan for covered
170-persons who acquire covered prescription drugs from a
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173-nonpreferred or nonparticipating provider;
174-(5) excludes a 340B entity or 340B pharmacy from a
175-pharmacy network on any basis that includes consideration
176-of whether the 340B entity or 340B pharmacy participates
177-in the 340B drug discount program;
178-(6) prevents a 340B entity or 340B pharmacy from using
179-a drug purchased under the 340B drug discount program; or
180-(7) any other provision that discriminates against a
181-340B entity or 340B pharmacy by treating the 340B entity
182-or 340B pharmacy differently than non-340B entities or
183-non-340B pharmacies for any reason relating to the
184-entity's participation in the 340B drug discount program.
185-As used in this subsection, "pharmacy benefit manager" and
186-"third-party payer" do not include pharmacy benefit managers
187-and third-party payers acting on behalf of a Medicaid program.
188-(g) A violation of this Section by a pharmacy benefit
189-manager constitutes an unfair or deceptive act or practice in
190-the business of insurance under Section 424.
191-(h) A provision that violates subsection (f) in a contract
192-between a pharmacy benefit manager or a third-party payer and
193-a 340B entity that is entered into, amended, or renewed after
194-July 1, 2022 shall be void and unenforceable.
195-(i)(1) A pharmacy benefit manager may not retaliate
196-against a pharmacist or pharmacy for disclosing information in
197-a court, in an administrative hearing, before a legislative
198-commission or committee, or in any other proceeding, if the
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201-pharmacist or pharmacy has reasonable cause to believe that
202-the disclosed information is evidence of a violation of a
203-State or federal law, rule, or regulation.
204-(2) A pharmacy benefit manager may not retaliate against a
205-pharmacist or pharmacy for disclosing information to a
206-government or law enforcement agency, if the pharmacist or
207-pharmacy has reasonable cause to believe that the disclosed
208-information is evidence of a violation of a State or federal
209-law, rule, or regulation.
210-(3) A pharmacist or pharmacy shall make commercially
211-reasonable efforts to limit the disclosure of confidential and
212-proprietary information.
213-(4) Retaliatory actions against a pharmacy or pharmacist
214-include cancellation of, restriction of, or refusal to renew
215-or offer a contract to a pharmacy solely because the pharmacy
216-or pharmacist has:
217-(A) made disclosures of information that the
218-pharmacist or pharmacy has reasonable cause to believe is
219-evidence of a violation of a State or federal law, rule, or
220-regulation;
221-(B) filed complaints with the plan or pharmacy benefit
222-manager; or
223-(C) filed complaints against the plan or pharmacy
224-benefit manager with the Department.
225-(j) (i) This Section applies to contracts entered into or
226-renewed on or after July 1, 2022.
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106+1 and submit an appeal.
107+2 (D) A requirement that, if an appeal is denied,
108+3 the pharmacy benefit manager must provide the reason
109+4 for the denial and the name and the national drug code
110+5 number from national or regional wholesalers.
111+6 (E) A requirement that, if an appeal is sustained,
112+7 the pharmacy benefit manager must make an adjustment
113+8 in the drug price effective the date the challenge is
114+9 resolved and make the adjustment applicable to all
115+10 similarly situated network pharmacy providers, as
116+11 determined by the managed care organization or
117+12 pharmacy benefit manager.
118+13 (5) Allow a plan sponsor contracting with a pharmacy
119+14 benefit manager an annual right to audit compliance with
120+15 the terms of the contract by the pharmacy benefit manager,
121+16 including, but not limited to, full disclosure of any and
122+17 all rebate amounts secured, whether product specific or
123+18 generalized rebates, that were provided to the pharmacy
124+19 benefit manager by a pharmaceutical manufacturer.
125+20 (6) Allow a plan sponsor contracting with a pharmacy
126+21 benefit manager to request that the pharmacy benefit
127+22 manager disclose the actual amounts paid by the pharmacy
128+23 benefit manager to the pharmacy.
129+24 (7) Provide notice to the party contracting with the
130+25 pharmacy benefit manager of any consideration that the
131+26 pharmacy benefit manager receives from the manufacturer
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228133
229-(k) (j) This Section applies to any group or individual
230-policy of accident and health insurance or managed care plan
231-that provides coverage for prescription drugs and that is
232-amended, delivered, issued, or renewed on or after July 1,
233-2020.
234-(Source: P.A. 101-452, eff. 1-1-20; 102-778, eff. 7-1-22;
235-revised 8-19-22.)
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142+1 for dispense as written prescriptions once a generic or
143+2 biologically similar product becomes available.
144+3 (c) In order to place a particular prescription drug on a
145+4 maximum allowable cost list, the pharmacy benefit manager
146+5 must, at a minimum, ensure that:
147+6 (1) if the drug is a generically equivalent drug, it
148+7 is listed as therapeutically equivalent and
149+8 pharmaceutically equivalent "A" or "B" rated in the United
150+9 States Food and Drug Administration's most recent version
151+10 of the "Orange Book" or have an NR or NA rating by
152+11 Medi-Span, Gold Standard, or a similar rating by a
153+12 nationally recognized reference;
154+13 (2) the drug is available for purchase by each
155+14 pharmacy in the State from national or regional
156+15 wholesalers operating in Illinois; and
157+16 (3) the drug is not obsolete.
158+17 (d) A pharmacy benefit manager is prohibited from limiting
159+18 a pharmacist's ability to disclose whether the cost-sharing
160+19 obligation exceeds the retail price for a covered prescription
161+20 drug, and the availability of a more affordable alternative
162+21 drug, if one is available in accordance with Section 42 of the
163+22 Pharmacy Practice Act.
164+23 (e) A health insurer or pharmacy benefit manager shall not
165+24 require an insured to make a payment for a prescription drug at
166+25 the point of sale in an amount that exceeds the lesser of:
167+26 (1) the applicable cost-sharing amount; or
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178+1 (2) the retail price of the drug in the absence of
179+2 prescription drug coverage.
180+3 (f) Unless required by law, a contract between a pharmacy
181+4 benefit manager or third-party payer and a 340B entity or 340B
182+5 pharmacy shall not contain any provision that:
183+6 (1) distinguishes between drugs purchased through the
184+7 340B drug discount program and other drugs when
185+8 determining reimbursement or reimbursement methodologies,
186+9 or contains otherwise less favorable payment terms or
187+10 reimbursement methodologies for 340B entities or 340B
188+11 pharmacies when compared to similarly situated non-340B
189+12 entities;
190+13 (2) imposes any fee, chargeback, or rate adjustment
191+14 that is not similarly imposed on similarly situated
192+15 pharmacies that are not 340B entities or 340B pharmacies;
193+16 (3) imposes any fee, chargeback, or rate adjustment
194+17 that exceeds the fee, chargeback, or rate adjustment that
195+18 is not similarly imposed on similarly situated pharmacies
196+19 that are not 340B entities or 340B pharmacies;
197+20 (4) prevents or interferes with an individual's choice
198+21 to receive a covered prescription drug from a 340B entity
199+22 or 340B pharmacy through any legally permissible means,
200+23 except that nothing in this paragraph shall prohibit the
201+24 establishment of differing copayments or other
202+25 cost-sharing amounts within the benefit plan for covered
203+26 persons who acquire covered prescription drugs from a
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214+1 nonpreferred or nonparticipating provider;
215+2 (5) excludes a 340B entity or 340B pharmacy from a
216+3 pharmacy network on any basis that includes consideration
217+4 of whether the 340B entity or 340B pharmacy participates
218+5 in the 340B drug discount program;
219+6 (6) prevents a 340B entity or 340B pharmacy from using
220+7 a drug purchased under the 340B drug discount program; or
221+8 (7) any other provision that discriminates against a
222+9 340B entity or 340B pharmacy by treating the 340B entity
223+10 or 340B pharmacy differently than non-340B entities or
224+11 non-340B pharmacies for any reason relating to the
225+12 entity's participation in the 340B drug discount program.
226+13 As used in this subsection, "pharmacy benefit manager" and
227+14 "third-party payer" do not include pharmacy benefit managers
228+15 and third-party payers acting on behalf of a Medicaid program.
229+16 (g) A violation of this Section by a pharmacy benefit
230+17 manager constitutes an unfair or deceptive act or practice in
231+18 the business of insurance under Section 424.
232+19 (h) A provision that violates subsection (f) in a contract
233+20 between a pharmacy benefit manager or a third-party payer and
234+21 a 340B entity that is entered into, amended, or renewed after
235+22 July 1, 2022 shall be void and unenforceable.
236+23 (i)(1) A pharmacy benefit manager may not retaliate
237+24 against a pharmacist or pharmacy for disclosing information in
238+25 a court, in an administrative hearing, before a legislative
239+26 commission or committee, or in any other proceeding, if the
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250+1 pharmacist or pharmacy has reasonable cause to believe that
251+2 the disclosed information is evidence of a violation of a
252+3 State or federal law, rule, or regulation.
253+4 (2) A pharmacy benefit manager may not retaliate against a
254+5 pharmacist or pharmacy for disclosing information to a
255+6 government or law enforcement agency, if the pharmacist or
256+7 pharmacy has reasonable cause to believe that the disclosed
257+8 information is evidence of a violation of a State or federal
258+9 law, rule, or regulation.
259+10 (3) A pharmacist or pharmacy shall make commercially
260+11 reasonable efforts to limit the disclosure of confidential and
261+12 proprietary information.
262+13 (4) Retaliatory actions against a pharmacy or pharmacist
263+14 include cancellation of, restriction of, or refusal to renew
264+15 or offer a contract to a pharmacy solely because the pharmacy
265+16 or pharmacist has:
266+17 (A) made disclosures of information that the
267+18 pharmacist or pharmacy has reasonable cause to believe is
268+19 evidence of a violation of a State or federal law, rule, or
269+20 regulation;
270+21 (B) filed complaints with the plan or pharmacy benefit
271+22 manager; or
272+23 (C) filed complaints against the plan or pharmacy
273+24 benefit manager with the Department.
274+25 (j) (i) This Section applies to contracts entered into or
275+26 renewed on or after July 1, 2022.
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286+1 (k) (j) This Section applies to any group or individual
287+2 policy of accident and health insurance or managed care plan
288+3 that provides coverage for prescription drugs and that is
289+4 amended, delivered, issued, or renewed on or after July 1,
290+5 2020.
291+6 (Source: P.A. 101-452, eff. 1-1-20; 102-778, eff. 7-1-22;
292+7 revised 8-19-22.)
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