4 | | - | AN ACT concerning regulation. |
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5 | | - | Be it enacted by the People of the State of Illinois, |
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6 | | - | represented in the General Assembly: |
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7 | | - | Section 5. The Illinois Insurance Code is amended by |
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8 | | - | changing Section 513b1 as follows: |
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9 | | - | (215 ILCS 5/513b1) |
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10 | | - | Sec. 513b1. Pharmacy benefit manager contracts. |
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11 | | - | (a) As used in this Section: |
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12 | | - | "340B drug discount program" means the program established |
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13 | | - | under Section 340B of the federal Public Health Service Act, |
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14 | | - | 42 U.S.C. 256b. |
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15 | | - | "340B entity" means a covered entity as defined in 42 |
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16 | | - | U.S.C. 256b(a)(4) authorized to participate in the 340B drug |
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17 | | - | discount program. |
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18 | | - | "340B pharmacy" means any pharmacy used to dispense 340B |
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19 | | - | drugs for a covered entity, whether entity-owned or external. |
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20 | | - | "Biological product" has the meaning ascribed to that term |
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21 | | - | in Section 19.5 of the Pharmacy Practice Act. |
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22 | | - | "Maximum allowable cost" means the maximum amount that a |
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23 | | - | pharmacy benefit manager will reimburse a pharmacy for the |
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24 | | - | cost of a drug. |
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25 | | - | "Maximum allowable cost list" means a list of drugs for |
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26 | | - | which a maximum allowable cost has been established by a |
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| 3 | + | 1 AN ACT concerning regulation. |
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| 4 | + | 2 Be it enacted by the People of the State of Illinois, |
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| 5 | + | 3 represented in the General Assembly: |
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| 6 | + | 4 Section 5. The Illinois Insurance Code is amended by |
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| 7 | + | 5 changing Section 513b1 as follows: |
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| 8 | + | 6 (215 ILCS 5/513b1) |
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| 9 | + | 7 Sec. 513b1. Pharmacy benefit manager contracts. |
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| 10 | + | 8 (a) As used in this Section: |
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| 11 | + | 9 "340B drug discount program" means the program established |
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| 12 | + | 10 under Section 340B of the federal Public Health Service Act, |
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| 13 | + | 11 42 U.S.C. 256b. |
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| 14 | + | 12 "340B entity" means a covered entity as defined in 42 |
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| 15 | + | 13 U.S.C. 256b(a)(4) authorized to participate in the 340B drug |
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| 16 | + | 14 discount program. |
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| 17 | + | 15 "340B pharmacy" means any pharmacy used to dispense 340B |
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| 18 | + | 16 drugs for a covered entity, whether entity-owned or external. |
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| 19 | + | 17 "Biological product" has the meaning ascribed to that term |
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| 20 | + | 18 in Section 19.5 of the Pharmacy Practice Act. |
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| 21 | + | 19 "Maximum allowable cost" means the maximum amount that a |
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| 22 | + | 20 pharmacy benefit manager will reimburse a pharmacy for the |
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| 23 | + | 21 cost of a drug. |
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| 24 | + | 22 "Maximum allowable cost list" means a list of drugs for |
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| 25 | + | 23 which a maximum allowable cost has been established by a |
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33 | | - | pharmacy benefit manager. |
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34 | | - | "Pharmacy benefit manager" means a person, business, or |
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35 | | - | entity, including a wholly or partially owned or controlled |
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36 | | - | subsidiary of a pharmacy benefit manager, that provides claims |
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37 | | - | processing services or other prescription drug or device |
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38 | | - | services, or both, for health benefit plans. |
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39 | | - | "Retail price" means the price an individual without |
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40 | | - | prescription drug coverage would pay at a retail pharmacy, not |
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41 | | - | including a pharmacist dispensing fee. |
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42 | | - | "Third-party payer" means any entity that pays for |
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43 | | - | prescription drugs on behalf of a patient other than a health |
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44 | | - | care provider or sponsor of a plan subject to regulation under |
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45 | | - | Medicare Part D, 42 U.S.C. 1395w-101, et seq. |
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46 | | - | (b) A contract between a health insurer and a pharmacy |
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47 | | - | benefit manager must require that the pharmacy benefit |
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48 | | - | manager: |
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49 | | - | (1) Update maximum allowable cost pricing information |
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50 | | - | at least every 7 calendar days. |
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51 | | - | (2) Maintain a process that will, in a timely manner, |
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52 | | - | eliminate drugs from maximum allowable cost lists or |
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53 | | - | modify drug prices to remain consistent with changes in |
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54 | | - | pricing data used in formulating maximum allowable cost |
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55 | | - | prices and product availability. |
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56 | | - | (3) Provide access to its maximum allowable cost list |
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57 | | - | to each pharmacy or pharmacy services administrative |
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58 | | - | organization subject to the maximum allowable cost list. |
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| 34 | + | 1 pharmacy benefit manager. |
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| 35 | + | 2 "Pharmacy benefit manager" means a person, business, or |
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| 36 | + | 3 entity, including a wholly or partially owned or controlled |
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| 37 | + | 4 subsidiary of a pharmacy benefit manager, that provides claims |
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| 38 | + | 5 processing services or other prescription drug or device |
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| 39 | + | 6 services, or both, for health benefit plans. |
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| 40 | + | 7 "Retail price" means the price an individual without |
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| 41 | + | 8 prescription drug coverage would pay at a retail pharmacy, not |
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| 42 | + | 9 including a pharmacist dispensing fee. |
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| 43 | + | 10 "Third-party payer" means any entity that pays for |
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| 44 | + | 11 prescription drugs on behalf of a patient other than a health |
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| 45 | + | 12 care provider or sponsor of a plan subject to regulation under |
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| 46 | + | 13 Medicare Part D, 42 U.S.C. 1395w-101, et seq. |
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| 47 | + | 14 (b) A contract between a health insurer and a pharmacy |
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| 48 | + | 15 benefit manager must require that the pharmacy benefit |
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| 49 | + | 16 manager: |
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| 50 | + | 17 (1) Update maximum allowable cost pricing information |
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| 51 | + | 18 at least every 7 calendar days. |
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| 52 | + | 19 (2) Maintain a process that will, in a timely manner, |
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| 53 | + | 20 eliminate drugs from maximum allowable cost lists or |
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| 54 | + | 21 modify drug prices to remain consistent with changes in |
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| 55 | + | 22 pricing data used in formulating maximum allowable cost |
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| 56 | + | 23 prices and product availability. |
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| 57 | + | 24 (3) Provide access to its maximum allowable cost list |
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| 58 | + | 25 to each pharmacy or pharmacy services administrative |
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| 59 | + | 26 organization subject to the maximum allowable cost list. |
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89 | | - | and submit an appeal. |
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90 | | - | (D) A requirement that, if an appeal is denied, |
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91 | | - | the pharmacy benefit manager must provide the reason |
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92 | | - | for the denial and the name and the national drug code |
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93 | | - | number from national or regional wholesalers. |
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94 | | - | (E) A requirement that, if an appeal is sustained, |
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95 | | - | the pharmacy benefit manager must make an adjustment |
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96 | | - | in the drug price effective the date the challenge is |
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97 | | - | resolved and make the adjustment applicable to all |
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98 | | - | similarly situated network pharmacy providers, as |
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99 | | - | determined by the managed care organization or |
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100 | | - | pharmacy benefit manager. |
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101 | | - | (5) Allow a plan sponsor contracting with a pharmacy |
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102 | | - | benefit manager an annual right to audit compliance with |
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103 | | - | the terms of the contract by the pharmacy benefit manager, |
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104 | | - | including, but not limited to, full disclosure of any and |
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105 | | - | all rebate amounts secured, whether product specific or |
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106 | | - | generalized rebates, that were provided to the pharmacy |
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107 | | - | benefit manager by a pharmaceutical manufacturer. |
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108 | | - | (6) Allow a plan sponsor contracting with a pharmacy |
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109 | | - | benefit manager to request that the pharmacy benefit |
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110 | | - | manager disclose the actual amounts paid by the pharmacy |
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111 | | - | benefit manager to the pharmacy. |
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112 | | - | (7) Provide notice to the party contracting with the |
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113 | | - | pharmacy benefit manager of any consideration that the |
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114 | | - | pharmacy benefit manager receives from the manufacturer |
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117 | | - | for dispense as written prescriptions once a generic or |
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118 | | - | biologically similar product becomes available. |
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119 | | - | (c) In order to place a particular prescription drug on a |
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120 | | - | maximum allowable cost list, the pharmacy benefit manager |
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121 | | - | must, at a minimum, ensure that: |
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122 | | - | (1) if the drug is a generically equivalent drug, it |
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123 | | - | is listed as therapeutically equivalent and |
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124 | | - | pharmaceutically equivalent "A" or "B" rated in the United |
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125 | | - | States Food and Drug Administration's most recent version |
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126 | | - | of the "Orange Book" or have an NR or NA rating by |
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127 | | - | Medi-Span, Gold Standard, or a similar rating by a |
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128 | | - | nationally recognized reference; |
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129 | | - | (2) the drug is available for purchase by each |
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130 | | - | pharmacy in the State from national or regional |
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131 | | - | wholesalers operating in Illinois; and |
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132 | | - | (3) the drug is not obsolete. |
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133 | | - | (d) A pharmacy benefit manager is prohibited from limiting |
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134 | | - | a pharmacist's ability to disclose whether the cost-sharing |
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135 | | - | obligation exceeds the retail price for a covered prescription |
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136 | | - | drug, and the availability of a more affordable alternative |
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137 | | - | drug, if one is available in accordance with Section 42 of the |
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138 | | - | Pharmacy Practice Act. |
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139 | | - | (e) A health insurer or pharmacy benefit manager shall not |
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140 | | - | require an insured to make a payment for a prescription drug at |
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141 | | - | the point of sale in an amount that exceeds the lesser of: |
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142 | | - | (1) the applicable cost-sharing amount; or |
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| 70 | + | 1 Access may include a real-time pharmacy website portal to |
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| 71 | + | 2 be able to view the maximum allowable cost list. As used in |
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| 72 | + | 3 this Section, "pharmacy services administrative |
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| 73 | + | 4 organization" means an entity operating within the State |
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| 74 | + | 5 that contracts with independent pharmacies to conduct |
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| 75 | + | 6 business on their behalf with third-party payers. A |
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| 76 | + | 7 pharmacy services administrative organization may provide |
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| 77 | + | 8 administrative services to pharmacies and negotiate and |
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| 78 | + | 9 enter into contracts with third-party payers or pharmacy |
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| 79 | + | 10 benefit managers on behalf of pharmacies. |
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| 80 | + | 11 (4) Provide a process by which a contracted pharmacy |
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| 81 | + | 12 can appeal the provider's reimbursement for a drug subject |
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| 82 | + | 13 to maximum allowable cost pricing. The appeals process |
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| 83 | + | 14 must, at a minimum, include the following: |
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| 84 | + | 15 (A) A requirement that a contracted pharmacy has |
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| 85 | + | 16 14 calendar days after the applicable fill date to |
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| 86 | + | 17 appeal a maximum allowable cost if the reimbursement |
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| 87 | + | 18 for the drug is less than the net amount that the |
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| 88 | + | 19 network provider paid to the supplier of the drug. |
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| 89 | + | 20 (B) A requirement that a pharmacy benefit manager |
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| 90 | + | 21 must respond to a challenge within 14 calendar days of |
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| 91 | + | 22 the contracted pharmacy making the claim for which the |
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| 92 | + | 23 appeal has been submitted. |
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| 93 | + | 24 (C) A telephone number and e-mail address or |
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| 94 | + | 25 website to network providers, at which the provider |
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| 95 | + | 26 can contact the pharmacy benefit manager to process |
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173 | | - | nonpreferred or nonparticipating provider; |
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174 | | - | (5) excludes a 340B entity or 340B pharmacy from a |
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175 | | - | pharmacy network on any basis that includes consideration |
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176 | | - | of whether the 340B entity or 340B pharmacy participates |
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177 | | - | in the 340B drug discount program; |
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178 | | - | (6) prevents a 340B entity or 340B pharmacy from using |
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179 | | - | a drug purchased under the 340B drug discount program; or |
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180 | | - | (7) any other provision that discriminates against a |
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181 | | - | 340B entity or 340B pharmacy by treating the 340B entity |
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182 | | - | or 340B pharmacy differently than non-340B entities or |
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183 | | - | non-340B pharmacies for any reason relating to the |
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184 | | - | entity's participation in the 340B drug discount program. |
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185 | | - | As used in this subsection, "pharmacy benefit manager" and |
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186 | | - | "third-party payer" do not include pharmacy benefit managers |
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187 | | - | and third-party payers acting on behalf of a Medicaid program. |
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188 | | - | (g) A violation of this Section by a pharmacy benefit |
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189 | | - | manager constitutes an unfair or deceptive act or practice in |
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190 | | - | the business of insurance under Section 424. |
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191 | | - | (h) A provision that violates subsection (f) in a contract |
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192 | | - | between a pharmacy benefit manager or a third-party payer and |
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193 | | - | a 340B entity that is entered into, amended, or renewed after |
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194 | | - | July 1, 2022 shall be void and unenforceable. |
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195 | | - | (i)(1) A pharmacy benefit manager may not retaliate |
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196 | | - | against a pharmacist or pharmacy for disclosing information in |
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197 | | - | a court, in an administrative hearing, before a legislative |
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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 |
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202 | | - | the disclosed information is evidence of a violation of a |
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203 | | - | State or federal law, rule, or regulation. |
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204 | | - | (2) A pharmacy benefit manager may not retaliate against a |
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205 | | - | pharmacist or pharmacy for disclosing information to a |
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206 | | - | government or law enforcement agency, if the pharmacist or |
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207 | | - | pharmacy has reasonable cause to believe that the disclosed |
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208 | | - | information is evidence of a violation of a State or federal |
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209 | | - | law, rule, or regulation. |
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210 | | - | (3) A pharmacist or pharmacy shall make commercially |
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211 | | - | reasonable efforts to limit the disclosure of confidential and |
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212 | | - | proprietary information. |
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213 | | - | (4) Retaliatory actions against a pharmacy or pharmacist |
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214 | | - | include cancellation of, restriction of, or refusal to renew |
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215 | | - | or offer a contract to a pharmacy solely because the pharmacy |
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216 | | - | or pharmacist has: |
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217 | | - | (A) made disclosures of information that the |
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218 | | - | pharmacist or pharmacy has reasonable cause to believe is |
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219 | | - | evidence of a violation of a State or federal law, rule, or |
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220 | | - | regulation; |
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221 | | - | (B) filed complaints with the plan or pharmacy benefit |
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222 | | - | manager; or |
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223 | | - | (C) filed complaints against the plan or pharmacy |
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224 | | - | benefit manager with the Department. |
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225 | | - | (j) (i) This Section applies to contracts entered into or |
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226 | | - | renewed on or after July 1, 2022. |
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| 106 | + | 1 and submit an appeal. |
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| 107 | + | 2 (D) A requirement that, if an appeal is denied, |
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| 108 | + | 3 the pharmacy benefit manager must provide the reason |
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| 109 | + | 4 for the denial and the name and the national drug code |
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| 110 | + | 5 number from national or regional wholesalers. |
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| 111 | + | 6 (E) A requirement that, if an appeal is sustained, |
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| 112 | + | 7 the pharmacy benefit manager must make an adjustment |
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| 113 | + | 8 in the drug price effective the date the challenge is |
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| 114 | + | 9 resolved and make the adjustment applicable to all |
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| 115 | + | 10 similarly situated network pharmacy providers, as |
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| 116 | + | 11 determined by the managed care organization or |
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| 117 | + | 12 pharmacy benefit manager. |
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| 118 | + | 13 (5) Allow a plan sponsor contracting with a pharmacy |
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| 119 | + | 14 benefit manager an annual right to audit compliance with |
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| 120 | + | 15 the terms of the contract by the pharmacy benefit manager, |
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| 121 | + | 16 including, but not limited to, full disclosure of any and |
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| 122 | + | 17 all rebate amounts secured, whether product specific or |
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| 123 | + | 18 generalized rebates, that were provided to the pharmacy |
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| 124 | + | 19 benefit manager by a pharmaceutical manufacturer. |
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| 125 | + | 20 (6) Allow a plan sponsor contracting with a pharmacy |
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| 126 | + | 21 benefit manager to request that the pharmacy benefit |
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| 127 | + | 22 manager disclose the actual amounts paid by the pharmacy |
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| 128 | + | 23 benefit manager to the pharmacy. |
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| 129 | + | 24 (7) Provide notice to the party contracting with the |
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| 130 | + | 25 pharmacy benefit manager of any consideration that the |
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| 131 | + | 26 pharmacy benefit manager receives from the manufacturer |
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229 | | - | (k) (j) This Section applies to any group or individual |
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230 | | - | policy of accident and health insurance or managed care plan |
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231 | | - | that provides coverage for prescription drugs and that is |
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232 | | - | amended, delivered, issued, or renewed on or after July 1, |
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233 | | - | 2020. |
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234 | | - | (Source: P.A. 101-452, eff. 1-1-20; 102-778, eff. 7-1-22; |
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235 | | - | revised 8-19-22.) |
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| 139 | + | |
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| 142 | + | 1 for dispense as written prescriptions once a generic or |
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| 143 | + | 2 biologically similar product becomes available. |
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| 144 | + | 3 (c) In order to place a particular prescription drug on a |
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| 145 | + | 4 maximum allowable cost list, the pharmacy benefit manager |
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| 146 | + | 5 must, at a minimum, ensure that: |
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| 147 | + | 6 (1) if the drug is a generically equivalent drug, it |
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| 148 | + | 7 is listed as therapeutically equivalent and |
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| 149 | + | 8 pharmaceutically equivalent "A" or "B" rated in the United |
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| 150 | + | 9 States Food and Drug Administration's most recent version |
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| 151 | + | 10 of the "Orange Book" or have an NR or NA rating by |
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| 152 | + | 11 Medi-Span, Gold Standard, or a similar rating by a |
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| 153 | + | 12 nationally recognized reference; |
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| 154 | + | 13 (2) the drug is available for purchase by each |
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| 155 | + | 14 pharmacy in the State from national or regional |
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| 156 | + | 15 wholesalers operating in Illinois; and |
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| 157 | + | 16 (3) the drug is not obsolete. |
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| 158 | + | 17 (d) A pharmacy benefit manager is prohibited from limiting |
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| 159 | + | 18 a pharmacist's ability to disclose whether the cost-sharing |
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| 160 | + | 19 obligation exceeds the retail price for a covered prescription |
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| 161 | + | 20 drug, and the availability of a more affordable alternative |
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| 162 | + | 21 drug, if one is available in accordance with Section 42 of the |
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| 163 | + | 22 Pharmacy Practice Act. |
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| 164 | + | 23 (e) A health insurer or pharmacy benefit manager shall not |
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| 165 | + | 24 require an insured to make a payment for a prescription drug at |
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| 166 | + | 25 the point of sale in an amount that exceeds the lesser of: |
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| 167 | + | 26 (1) the applicable cost-sharing amount; or |
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| 168 | + | |
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| 169 | + | |
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| 170 | + | |
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| 171 | + | |
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| 172 | + | |
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| 178 | + | 1 (2) the retail price of the drug in the absence of |
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| 179 | + | 2 prescription drug coverage. |
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| 180 | + | 3 (f) Unless required by law, a contract between a pharmacy |
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| 181 | + | 4 benefit manager or third-party payer and a 340B entity or 340B |
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| 182 | + | 5 pharmacy shall not contain any provision that: |
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| 183 | + | 6 (1) distinguishes between drugs purchased through the |
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| 184 | + | 7 340B drug discount program and other drugs when |
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| 185 | + | 8 determining reimbursement or reimbursement methodologies, |
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| 186 | + | 9 or contains otherwise less favorable payment terms or |
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| 187 | + | 10 reimbursement methodologies for 340B entities or 340B |
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| 188 | + | 11 pharmacies when compared to similarly situated non-340B |
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| 189 | + | 12 entities; |
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| 190 | + | 13 (2) imposes any fee, chargeback, or rate adjustment |
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| 191 | + | 14 that is not similarly imposed on similarly situated |
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| 192 | + | 15 pharmacies that are not 340B entities or 340B pharmacies; |
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| 193 | + | 16 (3) imposes any fee, chargeback, or rate adjustment |
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| 194 | + | 17 that exceeds the fee, chargeback, or rate adjustment that |
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| 195 | + | 18 is not similarly imposed on similarly situated pharmacies |
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| 196 | + | 19 that are not 340B entities or 340B pharmacies; |
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| 197 | + | 20 (4) prevents or interferes with an individual's choice |
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| 198 | + | 21 to receive a covered prescription drug from a 340B entity |
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| 199 | + | 22 or 340B pharmacy through any legally permissible means, |
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| 200 | + | 23 except that nothing in this paragraph shall prohibit the |
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| 201 | + | 24 establishment of differing copayments or other |
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| 202 | + | 25 cost-sharing amounts within the benefit plan for covered |
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| 203 | + | 26 persons who acquire covered prescription drugs from a |
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| 214 | + | 1 nonpreferred or nonparticipating provider; |
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| 215 | + | 2 (5) excludes a 340B entity or 340B pharmacy from a |
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| 216 | + | 3 pharmacy network on any basis that includes consideration |
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| 217 | + | 4 of whether the 340B entity or 340B pharmacy participates |
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| 218 | + | 5 in the 340B drug discount program; |
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| 219 | + | 6 (6) prevents a 340B entity or 340B pharmacy from using |
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| 220 | + | 7 a drug purchased under the 340B drug discount program; or |
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| 221 | + | 8 (7) any other provision that discriminates against a |
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| 222 | + | 9 340B entity or 340B pharmacy by treating the 340B entity |
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| 223 | + | 10 or 340B pharmacy differently than non-340B entities or |
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| 224 | + | 11 non-340B pharmacies for any reason relating to the |
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| 225 | + | 12 entity's participation in the 340B drug discount program. |
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| 226 | + | 13 As used in this subsection, "pharmacy benefit manager" and |
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| 227 | + | 14 "third-party payer" do not include pharmacy benefit managers |
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| 228 | + | 15 and third-party payers acting on behalf of a Medicaid program. |
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| 229 | + | 16 (g) A violation of this Section by a pharmacy benefit |
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| 230 | + | 17 manager constitutes an unfair or deceptive act or practice in |
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| 231 | + | 18 the business of insurance under Section 424. |
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| 232 | + | 19 (h) A provision that violates subsection (f) in a contract |
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| 233 | + | 20 between a pharmacy benefit manager or a third-party payer and |
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| 234 | + | 21 a 340B entity that is entered into, amended, or renewed after |
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| 235 | + | 22 July 1, 2022 shall be void and unenforceable. |
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| 236 | + | 23 (i)(1) A pharmacy benefit manager may not retaliate |
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| 237 | + | 24 against a pharmacist or pharmacy for disclosing information in |
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| 238 | + | 25 a court, in an administrative hearing, before a legislative |
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| 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 |
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| 251 | + | 2 the disclosed information is evidence of a violation of a |
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| 252 | + | 3 State or federal law, rule, or regulation. |
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| 253 | + | 4 (2) A pharmacy benefit manager may not retaliate against a |
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| 254 | + | 5 pharmacist or pharmacy for disclosing information to a |
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| 255 | + | 6 government or law enforcement agency, if the pharmacist or |
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| 256 | + | 7 pharmacy has reasonable cause to believe that the disclosed |
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| 257 | + | 8 information is evidence of a violation of a State or federal |
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| 258 | + | 9 law, rule, or regulation. |
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| 259 | + | 10 (3) A pharmacist or pharmacy shall make commercially |
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| 260 | + | 11 reasonable efforts to limit the disclosure of confidential and |
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| 261 | + | 12 proprietary information. |
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| 262 | + | 13 (4) Retaliatory actions against a pharmacy or pharmacist |
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| 263 | + | 14 include cancellation of, restriction of, or refusal to renew |
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| 264 | + | 15 or offer a contract to a pharmacy solely because the pharmacy |
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| 265 | + | 16 or pharmacist has: |
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| 266 | + | 17 (A) made disclosures of information that the |
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| 267 | + | 18 pharmacist or pharmacy has reasonable cause to believe is |
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| 268 | + | 19 evidence of a violation of a State or federal law, rule, or |
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| 269 | + | 20 regulation; |
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| 270 | + | 21 (B) filed complaints with the plan or pharmacy benefit |
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| 271 | + | 22 manager; or |
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| 272 | + | 23 (C) filed complaints against the plan or pharmacy |
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| 273 | + | 24 benefit manager with the Department. |
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| 274 | + | 25 (j) (i) This Section applies to contracts entered into or |
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| 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 |
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| 287 | + | 2 policy of accident and health insurance or managed care plan |
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| 288 | + | 3 that provides coverage for prescription drugs and that is |
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| 289 | + | 4 amended, delivered, issued, or renewed on or after July 1, |
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| 290 | + | 5 2020. |
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| 291 | + | 6 (Source: P.A. 101-452, eff. 1-1-20; 102-778, eff. 7-1-22; |
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| 292 | + | 7 revised 8-19-22.) |
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