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Indiana Senate Bill SB0088

Indiana 2022 Regular Session

Indiana Senate Bill SB0088 Compare Versions

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1-*SB0088.2*
2-Reprinted
3-January 28, 2022
1+*SB0088.1*
2+January 21, 2022
43 SENATE BILL No. 88
54 _____
6-DIGEST OF SB 88 (Updated January 27, 2022 3:28 pm - DI 104)
5+DIGEST OF SB 88 (Updated January 19, 2022 12:43 pm - DI 140)
76 Citations Affected: IC 27-1.
8-Synopsis: Prescription drug rebates and pricing. Provides that, for
9-individual health insurance coverage, the defined cost sharing for a
10-prescription drug be calculated at the point of sale and based on a price
11-that is reduced by an amount equal to at least 85% of all rebates
12-received by the insurer in connection with the dispensing or
13-administration of the prescription drug. Requires that, for group health
14-insurance coverage, an insurer: (1) pass through to a plan sponsor
15-100% of all rebates received or estimated to be received by the insurer
16-concerning the dispensing or administration of prescription drugs to the
17-covered individuals of the plan sponsor; (2) provide a plan sponsor, at
18-the time of contracting, the option of calculating defined cost sharing
19-for covered individuals of the plan sponsor at the point of sale based on
20-a price that is reduced by some or all of the rebates received or
21-estimated to be received by the insurer concerning the dispensing or
22-administration of the prescription drug; and (3) disclose specified
23-information to the plan sponsor. Allows the department of insurance to
24-enforce the provisions and impose a civil penalty.
25-Effective: July 1, 2022; January 1, 2023.
7+Synopsis: Prescription drug rebates and pricing. Provides that the
8+defined cost sharing for a prescription drug under a covered
9+individual's health insurance coverage must be calculated at the point
10+of sale and based on a price that is reduced by an amount equal to at
11+least 85% of all rebates received by the insurer in connection with the
12+dispensing or administration of the prescription drug.
13+Effective: January 1, 2023.
2614 Charbonneau, Becker, Ford J.D.
2715 January 4, 2022, read first time and referred to Committee on Health and Provider
2816 Services.
2917 January 20, 2022, reported favorably — Do Pass.
30-January 27, 2022, read second time, amended, ordered engrossed.
31-SB 88—LS 6449/DI 137 Reprinted
32-January 28, 2022
18+SB 88—LS 6449/DI 137 January 21, 2022
3319 Second Regular Session of the 122nd General Assembly (2022)
3420 PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
3521 Constitution) is being amended, the text of the existing provision will appear in this style type,
3622 additions will appear in this style type, and deletions will appear in this style type.
3723 Additions: Whenever a new statutory provision is being enacted (or a new constitutional
3824 provision adopted), the text of the new provision will appear in this style type. Also, the
3925 word NEW will appear in that style type in the introductory clause of each SECTION that adds
4026 a new provision to the Indiana Code or the Indiana Constitution.
4127 Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts
4228 between statutes enacted by the 2021 Regular Session of the General Assembly.
4329 SENATE BILL No. 88
4430 A BILL FOR AN ACT to amend the Indiana Code concerning
4531 insurance.
4632 Be it enacted by the General Assembly of the State of Indiana:
4733 1 SECTION 1. IC 27-1-48 IS ADDED TO THE INDIANA CODE AS
4834 2 A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE
4935 3 JANUARY 1, 2023]:
50-4 Chapter 48. Individual Prescription Drug Rebates
36+4 Chapter 48. Prescription Drug Rebates
5137 5 Sec. 1. As used in this chapter, "covered individual" means an
5238 6 individual who is entitled to health insurance coverage.
5339 7 Sec. 2. As used in this chapter, "defined cost sharing" means a
5440 8 deductible payment or coinsurance amount imposed on a covered
5541 9 individual for a covered prescription drug under the covered
5642 10 individual's health insurance coverage.
5743 11 Sec. 3. As used in this chapter, "health insurance coverage"
5844 12 includes:
59-13 (1) an individual policy of accident and sickness insurance (as
60-14 defined in IC 27-8-5-1);
61-15 (2) an individual contract (as defined in IC 27-13-1-21) that
62-16 provides coverage for basic health care services (as defined in
63-17 IC 27-13-1-4); and
45+13 (1) a policy of accident and sickness insurance (as defined in
46+14 IC 27-8-5-1);
47+15 (2) an individual contract (as defined in IC 27-13-1-21) or a
48+16 group contract (as defined in IC 27-13-1-16) that provides
49+17 coverage for basic health care services (as defined in
6450 SB 88—LS 6449/DI 137 2
65-1 (3) any other health plan that is issued on an individual basis;
66-2 and that is subject to state law regulating insurance and offers
67-3 health insurance coverage (as defined in 42 U.S.C. 300gg-91). The
68-4 term includes coverage of a dependent of the covered individual
69-5 under an individual policy or contract described in subdivisions (1)
70-6 through (3).
71-7 Sec. 4. As used in this chapter, "insurer" means an insurer that
72-8 provides health insurance coverage to a covered individual. The
73-9 term includes a third party administrator, including a pharmacy
74-10 benefit manager (as defined in IC 27-1-24.5-12).
75-11 Sec. 5. As used in this chapter, "price protection rebate" means
76-12 a negotiated price concession that accrues directly or indirectly to
77-13 an insurer, or another party on behalf of an insurer, if there is an
78-14 increase in the wholesale acquisition cost of a prescription drug
79-15 above a specified threshold.
80-16 Sec. 6. As used in this chapter, "rebate" means:
81-17 (1) a discount or other negotiated price concession, including
82-18 but not limited to base price concessions (whether described
83-19 as a rebate or otherwise) and reasonable estimates of price
84-20 protection rebates, and performance based price concessions,
85-21 that may accrue directly or indirectly or are anticipated to be
86-22 passed through to an insurer during the coverage year from
87-23 a manufacturer, dispensing pharmacy, or other party in
88-24 connection with the dispensing or administration of a
89-25 prescription drug; and
90-26 (2) a reasonable estimate of any negotiated price concession,
91-27 fee, or other administrative cost that is passed through, or is
92-28 reasonably anticipated to be passed through, to the insurer
93-29 and serves to reduce the insurer's liability for a prescription
94-30 drug.
95-31 Sec. 7. A covered individual's defined cost sharing for a
96-32 prescription drug must be:
97-33 (1) calculated at the point of sale; and
98-34 (2) based on a price that is reduced by an amount equal to at
99-35 least eighty-five percent (85%) of all rebates received or
100-36 estimated to be received by the insurer in connection with the
101-37 dispensing or administration of the prescription drug.
102-38 Sec. 8. Nothing in this chapter prohibits an insurer from
103-39 decreasing a covered individual's defined cost sharing by an
104-40 amount greater than the amount required under section 7 of this
105-41 chapter.
106-42 Sec. 9. The department may enforce the requirements of this
51+1 IC 27-13-1-4); and
52+2 (3) any other health plan that is subject to state law regulating
53+3 insurance and offers health insurance coverage (as defined in
54+4 42 U.S.C. 300gg-91).
55+5 Sec. 4. As used in this chapter, "insurer" means an insurer that
56+6 provides health insurance coverage to a covered individual.
57+7 Sec. 5. As used in this chapter, "price protection rebate" means
58+8 a negotiated price concession that accrues directly or indirectly to
59+9 an insurer, or another party on behalf of an insurer, if there is an
60+10 increase in the wholesale acquisition cost of a prescription drug
61+11 above a specified threshold.
62+12 Sec. 6. As used in this chapter, "rebate" means:
63+13 (1) a discount or other negotiated price concession, including
64+14 but not limited to base price concessions (whether described
65+15 as a rebate or otherwise) and reasonable estimates of price
66+16 protection rebates, and performance based price concessions,
67+17 that may accrue directly or indirectly or are anticipated to be
68+18 passed through to an insurer during the coverage year from
69+19 a manufacturer, dispensing pharmacy, or other party in
70+20 connection with the dispensing or administration of a
71+21 prescription drug; and
72+22 (2) a reasonable estimate of any negotiated price concession,
73+23 fee, or other administrative cost that is passed through, or is
74+24 reasonably anticipated to be passed through, to the insurer
75+25 and serves to reduce the insurer's liability for a prescription
76+26 drug.
77+27 Sec. 7. A covered individual's defined cost sharing for a
78+28 prescription drug must be:
79+29 (1) calculated at the point of sale; and
80+30 (2) based on a price that is reduced by an amount equal to at
81+31 least eighty-five percent (85%) of all rebates received or
82+32 estimated to be received by the insurer in connection with the
83+33 dispensing or administration of the prescription drug.
84+34 Sec. 8. Nothing in this chapter prohibits an insurer from
85+35 decreasing a covered individual's defined cost sharing by an
86+36 amount greater than the amount required under section 7 of this
87+37 chapter.
88+38 Sec. 9. The department of insurance may enforce the
89+39 requirements of this section to the extent permissible under
90+40 applicable law.
91+41 Sec. 10. The commissioner may take appropriate action to
92+42 enforce this section by imposing a civil penalty not to exceed ten
10793 SB 88—LS 6449/DI 137 3
108-1 section to the extent permissible under applicable law.
109-2 Sec. 10. The commissioner may take appropriate action to
110-3 enforce this chapter by imposing a civil penalty not to exceed ten
111-4 thousand dollars ($10,000) per violation.
112-5 Sec. 11. In complying with the requirements of this chapter, an
113-6 insurer or an insurer's agent may not publish or otherwise reveal
114-7 information regarding the actual amount of rebates the insurer
115-8 receives on a product, manufacturer, or pharmacy specific basis.
116-9 This information is protected as a trade secret (as defined in
117-10 IC 24-2-3-2) and may not be published or otherwise disclosed
118-11 directly or indirectly. An insurer shall impose the confidentiality
119-12 requirements of this section on any vendor or downstream third
120-13 party that performs health care or administrative services on
121-14 behalf of the insurer that may receive or have access to rebate
122-15 information.
123-16 SECTION 2. IC 27-1-49 IS ADDED TO THE INDIANA CODE AS
124-17 A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE JULY
125-18 1, 2022]:
126-19 Chapter 49. Group Prescription Drug Rebates
127-20 Sec. 1. As used in this chapter, "covered individual" means an
128-21 individual who is entitled to health insurance coverage.
129-22 Sec. 2. As used in this chapter, "defined cost sharing" means a
130-23 deductible payment or coinsurance amount imposed on a covered
131-24 individual for a covered prescription drug under the covered
132-25 individual's health insurance coverage.
133-26 Sec. 3. As used in this chapter, "health insurance coverage"
134-27 includes:
135-28 (1) a group policy of accident and sickness insurance (as
136-29 defined in IC 27-8-5-1);
137-30 (2) a group contract (as defined in IC 27-13-1-16) that
138-31 provides coverage for basic health care services (as defined in
139-32 IC 27-13-1-4); and
140-33 (3) any other group health plan that limits eligibility to
141-34 members of a specific group;
142-35 and that is subject to state law regulating insurance and offers
143-36 health insurance coverage (as defined in 42 U.S.C. 300gg-91). The
144-37 term includes coverage of a dependent of the covered individual
145-38 under a group policy or contract described in subdivisions (1)
146-39 through (3).
147-40 Sec. 4. As used in this chapter, "insurer" means an insurer that
148-41 provides health insurance coverage to a covered individual. The
149-42 term includes a third party administrator, including a pharmacy
94+1 thousand dollars ($10,000) per violation.
95+2 Sec. 11. In complying with the requirements of this chapter, an
96+3 insurer or an insurer's agent may not publish or otherwise reveal
97+4 information regarding the actual amount of rebates the insurer
98+5 receives on a product, manufacturer, or pharmacy specific basis.
99+6 This information is protected as a trade secret (as defined in
100+7 IC 24-2-3-2) and may not be published or otherwise disclosed
101+8 directly or indirectly. An insurer shall impose the confidentiality
102+9 requirements of this section on any vendor or downstream third
103+10 party that performs health care or administrative services on
104+11 behalf of the insurer that may receive or have access to rebate
105+12 information.
150106 SB 88—LS 6449/DI 137 4
151-1 benefit manager (as defined in IC 27-1-24.5-12).
152-2 Sec. 5. As used in this chapter, "price protection rebate" means
153-3 a negotiated price concession that accrues directly or indirectly to
154-4 an insurer, or another party on behalf of an insurer, if there is an
155-5 increase in the wholesale acquisition cost of a prescription drug
156-6 above a specified threshold.
157-7 Sec. 6. As used in this chapter, "rebate" means:
158-8 (1) a discount or other negotiated price concession, including
159-9 but not limited to base price concessions (whether described
160-10 as a rebate or otherwise) and reasonable estimates of price
161-11 protection rebates, and performance based price concessions,
162-12 that may accrue directly or indirectly or are anticipated to be
163-13 passed through to an insurer during the coverage year from
164-14 a manufacturer, dispensing pharmacy, or other party in
165-15 connection with the dispensing or administration of a
166-16 prescription drug; and
167-17 (2) a reasonable estimate of any negotiated price concession,
168-18 fee, or other administrative cost that is passed through, or is
169-19 reasonably anticipated to be passed through, to the insurer
170-20 and serves to reduce the insurer's liability for a prescription
171-21 drug.
172-22 Sec. 7. This section applies to a policy of health insurance
173-23 coverage that is issued, delivered, amended, or renewed after
174-24 December 31, 2022. An insurer shall pass through to a plan
175-25 sponsor one hundred percent (100%) of all rebates received or
176-26 estimated to be received by the insurer concerning the dispensing
177-27 or administration of prescription drugs to the covered individuals
178-28 of the plan sponsor.
179-29 Sec. 8. At the time of contracting, an insurer shall provide plan
180-30 sponsors the option of calculating defined cost sharing for covered
181-31 individuals of the plan sponsor at the point of sale based on a price
182-32 that is reduced by some or all of the rebates received or estimated
183-33 to be received by the insurer concerning the dispensing or
184-34 administration of the prescription drug.
185-35 Sec. 9. Nothing in this chapter prohibits an insurer from
186-36 decreasing a covered individual's defined cost sharing by an
187-37 amount greater than the amount required under section 7 of this
188-38 chapter.
189-39 Sec. 10. An insurer shall disclose the following information to a
190-40 plan sponsor on at least an annual basis:
191-41 (1) The approximate amount of rebates expected to be
192-42 received by the insurer concerning the dispensing or
193-SB 88—LS 6449/DI 137 5
194-1 administration of prescription drugs to the covered
195-2 individuals of the plan sponsor.
196-3 (2) An explanation that the plan sponsor may choose to:
197-4 (A) apply the rebates to reduce premiums for all covered
198-5 individuals; or
199-6 (B) calculate defined cost sharing for a covered individual
200-7 at the point of sale based on a price that is reduced by
201-8 rebates received or estimated to be received by the insurer
202-9 concerning the dispensing or administration of the covered
203-10 individual's prescription drugs.
204-11 (3) An explanation that, in the individual market, IC 27-1-48
205-12 requires that covered individual defined cost sharing be
206-13 calculated at the point of sale based on a price that is reduced
207-14 by at least eighty-five percent (85%) of the rebates received
208-15 or estimated to be received by the insurer concerning the
209-16 dispensing or administration of the covered individual's
210-17 prescription drugs.
211-18 Sec. 11. The department may enforce the requirements of this
212-19 chapter to the extent permissible under applicable law.
213-20 Sec. 12. The commissioner may take appropriate action to
214-21 enforce this chapter by imposing a civil penalty not to exceed ten
215-22 thousand dollars ($10,000) per violation.
216-23 Sec. 13. (a) In complying with the requirements of this chapter,
217-24 an insurer may not publish or otherwise reveal information
218-25 regarding the actual amount of rebates the insurer receives on a
219-26 product, manufacturer, or pharmacy specific basis. This
220-27 information is protected as a trade secret (as defined in
221-28 IC 24-2-3-2) and may not be published or otherwise disclosed.
222-29 (b) An insurer shall impose the confidentiality requirements of
223-30 this section on any vendor or third party that performs health care
224-31 or administrative services on behalf of the insurer and that may
225-32 receive or have access to the rebate information.
226-SB 88—LS 6449/DI 137 6
227107 COMMITTEE REPORT
228108 Madam President: The Senate Committee on Health and Provider
229109 Services, to which was referred Senate Bill No. 88, has had the same
230110 under consideration and begs leave to report the same back to the
231111 Senate with the recommendation that said bill DO PASS.
232112 (Reference is to SB 88 as introduced.)
233113
234114 CHARBONNEAU, Chairperson
235115 Committee Vote: Yeas 7, Nays 4
236-_____
237-SENATE MOTION
238-Madam President: I move that Senate Bill 88 be amended to read as
239-follows:
240-Page 1, line 4, after "48." insert "Individual".
241-Page 1, line 13, delete "a" and insert "an individual".
242-Page 1, line 15, delete "or a".
243-Page 1, line 16, delete "group contract (as defined in
244-IC 27-13-1-16)".
245-Page 2, line 2, after "is" insert "issued on an individual basis;
246-and that is".
247-Page 2, line 4, after "300gg-91)." insert "The term includes
248-coverage of a dependent of the covered individual under an
249-individual policy or contract described in subdivisions (1) through
250-(3).".
251-Page 2, line 6, after "individual." insert "The term includes a third
252-party administrator, including a pharmacy benefit manager (as
253-defined in IC 27-1-24.5-12).".
254-Page 2, line 38, delete "of insurance".
255-Page 2, line 42, delete "section" and insert "chapter".
256-Page 3, after line 12, begin a new paragraph and insert:
257-"SECTION 2. IC 27-1-49 IS ADDED TO THE INDIANA CODE
258-AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE
259-JULY 1, 2022]:
260-Chapter 49. Group Prescription Drug Rebates
261-Sec. 1. As used in this chapter, "covered individual" means an
262-individual who is entitled to health insurance coverage.
263-Sec. 2. As used in this chapter, "defined cost sharing" means a
264-deductible payment or coinsurance amount imposed on a covered
265-SB 88—LS 6449/DI 137 7
266-individual for a covered prescription drug under the covered
267-individual's health insurance coverage.
268-Sec. 3. As used in this chapter, "health insurance coverage"
269-includes:
270-(1) a group policy of accident and sickness insurance (as
271-defined in IC 27-8-5-1);
272-(2) a group contract (as defined in IC 27-13-1-16) that
273-provides coverage for basic health care services (as defined in
274-IC 27-13-1-4); and
275-(3) any other group health plan that limits eligibility to
276-members of a specific group;
277-and that is subject to state law regulating insurance and offers
278-health insurance coverage (as defined in 42 U.S.C. 300gg-91). The
279-term includes coverage of a dependent of the covered individual
280-under a group policy or contract described in subdivisions (1)
281-through (3).
282-Sec. 4. As used in this chapter, "insurer" means an insurer that
283-provides health insurance coverage to a covered individual. The
284-term includes a third party administrator, including a pharmacy
285-benefit manager (as defined in IC 27-1-24.5-12).
286-Sec. 5. As used in this chapter, "price protection rebate" means
287-a negotiated price concession that accrues directly or indirectly to
288-an insurer, or another party on behalf of an insurer, if there is an
289-increase in the wholesale acquisition cost of a prescription drug
290-above a specified threshold.
291-Sec. 6. As used in this chapter, "rebate" means:
292-(1) a discount or other negotiated price concession, including
293-but not limited to base price concessions (whether described
294-as a rebate or otherwise) and reasonable estimates of price
295-protection rebates, and performance based price concessions,
296-that may accrue directly or indirectly or are anticipated to be
297-passed through to an insurer during the coverage year from
298-a manufacturer, dispensing pharmacy, or other party in
299-connection with the dispensing or administration of a
300-prescription drug; and
301-(2) a reasonable estimate of any negotiated price concession,
302-fee, or other administrative cost that is passed through, or is
303-reasonably anticipated to be passed through, to the insurer
304-and serves to reduce the insurer's liability for a prescription
305-drug.
306-Sec. 7. This section applies to a policy of health insurance
307-coverage that is issued, delivered, amended, or renewed after
308-SB 88—LS 6449/DI 137 8
309-December 31, 2022. An insurer shall pass through to a plan
310-sponsor one hundred percent (100%) of all rebates received or
311-estimated to be received by the insurer concerning the dispensing
312-or administration of prescription drugs to the covered individuals
313-of the plan sponsor.
314-Sec. 8. At the time of contracting, an insurer shall provide plan
315-sponsors the option of calculating defined cost sharing for covered
316-individuals of the plan sponsor at the point of sale based on a price
317-that is reduced by some or all of the rebates received or estimated
318-to be received by the insurer concerning the dispensing or
319-administration of the prescription drug.
320-Sec. 9. Nothing in this chapter prohibits an insurer from
321-decreasing a covered individual's defined cost sharing by an
322-amount greater than the amount required under section 7 of this
323-chapter.
324-Sec. 10. An insurer shall disclose the following information to a
325-plan sponsor on at least an annual basis:
326-(1) The approximate amount of rebates expected to be
327-received by the insurer concerning the dispensing or
328-administration of prescription drugs to the covered
329-individuals of the plan sponsor.
330-(2) An explanation that the plan sponsor may choose to:
331-(A) apply the rebates to reduce premiums for all covered
332-individuals; or
333-(B) calculate defined cost sharing for a covered individual
334-at the point of sale based on a price that is reduced by
335-rebates received or estimated to be received by the insurer
336-concerning the dispensing or administration of the covered
337-individual's prescription drugs.
338-(3) An explanation that, in the individual market, IC 27-1-48
339-requires that covered individual defined cost sharing be
340-calculated at the point of sale based on a price that is reduced
341-by at least eighty-five percent (85%) of the rebates received
342-or estimated to be received by the insurer concerning the
343-dispensing or administration of the covered individual's
344-prescription drugs.
345-Sec. 11. The department may enforce the requirements of this
346-chapter to the extent permissible under applicable law.
347-Sec. 12. The commissioner may take appropriate action to
348-enforce this chapter by imposing a civil penalty not to exceed ten
349-thousand dollars ($10,000) per violation.
350-Sec. 13. (a) In complying with the requirements of this chapter,
351-SB 88—LS 6449/DI 137 9
352-an insurer may not publish or otherwise reveal information
353-regarding the actual amount of rebates the insurer receives on a
354-product, manufacturer, or pharmacy specific basis. This
355-information is protected as a trade secret (as defined in
356-IC 24-2-3-2) and may not be published or otherwise disclosed.
357-(b) An insurer shall impose the confidentiality requirements of
358-this section on any vendor or third party that performs health care
359-or administrative services on behalf of the insurer and that may
360-receive or have access to the rebate information.".
361-Renumber all SECTIONS consecutively.
362-(Reference is to SB 88 as printed January 21, 2022.)
363-CHARBONNEAU
364116 SB 88—LS 6449/DI 137