*SB0088.2*
Reprinted
January 28, 2022
SENATE BILL No. 88
_____
DIGEST OF SB 88 (Updated January 27, 2022 3:28 pm - DI 104)
Citations Affected: IC 27-1.
Synopsis: Prescription drug rebates and pricing. Provides that, for
individual health insurance coverage, the defined cost sharing for a
prescription drug be calculated at the point of sale and based on a price
that is reduced by an amount equal to at least 85% of all rebates
received by the insurer in connection with the dispensing or
administration of the prescription drug. Requires that, for group health
insurance coverage, an insurer: (1) pass through to a plan sponsor
100% of all rebates received or estimated to be received by the insurer
concerning the dispensing or administration of prescription drugs to the
covered individuals of the plan sponsor; (2) provide a plan sponsor, at
the time of contracting, the option of calculating defined cost sharing
for covered individuals of the plan sponsor at the point of sale based on
a price that is reduced by some or all of the rebates received or
estimated to be received by the insurer concerning the dispensing or
administration of the prescription drug; and (3) disclose specified
information to the plan sponsor. Allows the department of insurance to
enforce the provisions and impose a civil penalty.
Effective: July 1, 2022; January 1, 2023.
Charbonneau, Becker, Ford J.D.
January 4, 2022, read first time and referred to Committee on Health and Provider
Services.
January 20, 2022, reported favorably — Do Pass.
January 27, 2022, read second time, amended, ordered engrossed.
SB 88—LS 6449/DI 137 Reprinted
January 28, 2022
Second Regular Session of the 122nd General Assembly (2022)
PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
Constitution) is being amended, the text of the existing provision will appear in this style type,
additions will appear in this style type, and deletions will appear in this style type.
Additions: Whenever a new statutory provision is being enacted (or a new constitutional
provision adopted), the text of the new provision will appear in this style type. Also, the
word NEW will appear in that style type in the introductory clause of each SECTION that adds
a new provision to the Indiana Code or the Indiana Constitution.
Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts
between statutes enacted by the 2021 Regular Session of the General Assembly.
SENATE BILL No. 88
A BILL FOR AN ACT to amend the Indiana Code concerning
insurance.
Be it enacted by the General Assembly of the State of Indiana:
1 SECTION 1. IC 27-1-48 IS ADDED TO THE INDIANA CODE AS
2 A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE
3 JANUARY 1, 2023]:
4 Chapter 48. Individual Prescription Drug Rebates
5 Sec. 1. As used in this chapter, "covered individual" means an
6 individual who is entitled to health insurance coverage.
7 Sec. 2. As used in this chapter, "defined cost sharing" means a
8 deductible payment or coinsurance amount imposed on a covered
9 individual for a covered prescription drug under the covered
10 individual's health insurance coverage.
11 Sec. 3. As used in this chapter, "health insurance coverage"
12 includes:
13 (1) an individual policy of accident and sickness insurance (as
14 defined in IC 27-8-5-1);
15 (2) an individual contract (as defined in IC 27-13-1-21) that
16 provides coverage for basic health care services (as defined in
17 IC 27-13-1-4); and
SB 88—LS 6449/DI 137 2
1 (3) any other health plan that is issued on an individual basis;
2 and that is subject to state law regulating insurance and offers
3 health insurance coverage (as defined in 42 U.S.C. 300gg-91). The
4 term includes coverage of a dependent of the covered individual
5 under an individual policy or contract described in subdivisions (1)
6 through (3).
7 Sec. 4. As used in this chapter, "insurer" means an insurer that
8 provides health insurance coverage to a covered individual. The
9 term includes a third party administrator, including a pharmacy
10 benefit manager (as defined in IC 27-1-24.5-12).
11 Sec. 5. As used in this chapter, "price protection rebate" means
12 a negotiated price concession that accrues directly or indirectly to
13 an insurer, or another party on behalf of an insurer, if there is an
14 increase in the wholesale acquisition cost of a prescription drug
15 above a specified threshold.
16 Sec. 6. As used in this chapter, "rebate" means:
17 (1) a discount or other negotiated price concession, including
18 but not limited to base price concessions (whether described
19 as a rebate or otherwise) and reasonable estimates of price
20 protection rebates, and performance based price concessions,
21 that may accrue directly or indirectly or are anticipated to be
22 passed through to an insurer during the coverage year from
23 a manufacturer, dispensing pharmacy, or other party in
24 connection with the dispensing or administration of a
25 prescription drug; and
26 (2) a reasonable estimate of any negotiated price concession,
27 fee, or other administrative cost that is passed through, or is
28 reasonably anticipated to be passed through, to the insurer
29 and serves to reduce the insurer's liability for a prescription
30 drug.
31 Sec. 7. A covered individual's defined cost sharing for a
32 prescription drug must be:
33 (1) calculated at the point of sale; and
34 (2) based on a price that is reduced by an amount equal to at
35 least eighty-five percent (85%) of all rebates received or
36 estimated to be received by the insurer in connection with the
37 dispensing or administration of the prescription drug.
38 Sec. 8. Nothing in this chapter prohibits an insurer from
39 decreasing a covered individual's defined cost sharing by an
40 amount greater than the amount required under section 7 of this
41 chapter.
42 Sec. 9. The department may enforce the requirements of this
SB 88—LS 6449/DI 137 3
1 section to the extent permissible under applicable law.
2 Sec. 10. The commissioner may take appropriate action to
3 enforce this chapter by imposing a civil penalty not to exceed ten
4 thousand dollars ($10,000) per violation.
5 Sec. 11. In complying with the requirements of this chapter, an
6 insurer or an insurer's agent may not publish or otherwise reveal
7 information regarding the actual amount of rebates the insurer
8 receives on a product, manufacturer, or pharmacy specific basis.
9 This information is protected as a trade secret (as defined in
10 IC 24-2-3-2) and may not be published or otherwise disclosed
11 directly or indirectly. An insurer shall impose the confidentiality
12 requirements of this section on any vendor or downstream third
13 party that performs health care or administrative services on
14 behalf of the insurer that may receive or have access to rebate
15 information.
16 SECTION 2. IC 27-1-49 IS ADDED TO THE INDIANA CODE AS
17 A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE JULY
18 1, 2022]:
19 Chapter 49. Group Prescription Drug Rebates
20 Sec. 1. As used in this chapter, "covered individual" means an
21 individual who is entitled to health insurance coverage.
22 Sec. 2. As used in this chapter, "defined cost sharing" means a
23 deductible payment or coinsurance amount imposed on a covered
24 individual for a covered prescription drug under the covered
25 individual's health insurance coverage.
26 Sec. 3. As used in this chapter, "health insurance coverage"
27 includes:
28 (1) a group policy of accident and sickness insurance (as
29 defined in IC 27-8-5-1);
30 (2) a group contract (as defined in IC 27-13-1-16) that
31 provides coverage for basic health care services (as defined in
32 IC 27-13-1-4); and
33 (3) any other group health plan that limits eligibility to
34 members of a specific group;
35 and that is subject to state law regulating insurance and offers
36 health insurance coverage (as defined in 42 U.S.C. 300gg-91). The
37 term includes coverage of a dependent of the covered individual
38 under a group policy or contract described in subdivisions (1)
39 through (3).
40 Sec. 4. As used in this chapter, "insurer" means an insurer that
41 provides health insurance coverage to a covered individual. The
42 term includes a third party administrator, including a pharmacy
SB 88—LS 6449/DI 137 4
1 benefit manager (as defined in IC 27-1-24.5-12).
2 Sec. 5. As used in this chapter, "price protection rebate" means
3 a negotiated price concession that accrues directly or indirectly to
4 an insurer, or another party on behalf of an insurer, if there is an
5 increase in the wholesale acquisition cost of a prescription drug
6 above a specified threshold.
7 Sec. 6. As used in this chapter, "rebate" means:
8 (1) a discount or other negotiated price concession, including
9 but not limited to base price concessions (whether described
10 as a rebate or otherwise) and reasonable estimates of price
11 protection rebates, and performance based price concessions,
12 that may accrue directly or indirectly or are anticipated to be
13 passed through to an insurer during the coverage year from
14 a manufacturer, dispensing pharmacy, or other party in
15 connection with the dispensing or administration of a
16 prescription drug; and
17 (2) a reasonable estimate of any negotiated price concession,
18 fee, or other administrative cost that is passed through, or is
19 reasonably anticipated to be passed through, to the insurer
20 and serves to reduce the insurer's liability for a prescription
21 drug.
22 Sec. 7. This section applies to a policy of health insurance
23 coverage that is issued, delivered, amended, or renewed after
24 December 31, 2022. An insurer shall pass through to a plan
25 sponsor one hundred percent (100%) of all rebates received or
26 estimated to be received by the insurer concerning the dispensing
27 or administration of prescription drugs to the covered individuals
28 of the plan sponsor.
29 Sec. 8. At the time of contracting, an insurer shall provide plan
30 sponsors the option of calculating defined cost sharing for covered
31 individuals of the plan sponsor at the point of sale based on a price
32 that is reduced by some or all of the rebates received or estimated
33 to be received by the insurer concerning the dispensing or
34 administration of the prescription drug.
35 Sec. 9. Nothing in this chapter prohibits an insurer from
36 decreasing a covered individual's defined cost sharing by an
37 amount greater than the amount required under section 7 of this
38 chapter.
39 Sec. 10. An insurer shall disclose the following information to a
40 plan sponsor on at least an annual basis:
41 (1) The approximate amount of rebates expected to be
42 received by the insurer concerning the dispensing or
SB 88—LS 6449/DI 137 5
1 administration of prescription drugs to the covered
2 individuals of the plan sponsor.
3 (2) An explanation that the plan sponsor may choose to:
4 (A) apply the rebates to reduce premiums for all covered
5 individuals; or
6 (B) calculate defined cost sharing for a covered individual
7 at the point of sale based on a price that is reduced by
8 rebates received or estimated to be received by the insurer
9 concerning the dispensing or administration of the covered
10 individual's prescription drugs.
11 (3) An explanation that, in the individual market, IC 27-1-48
12 requires that covered individual defined cost sharing be
13 calculated at the point of sale based on a price that is reduced
14 by at least eighty-five percent (85%) of the rebates received
15 or estimated to be received by the insurer concerning the
16 dispensing or administration of the covered individual's
17 prescription drugs.
18 Sec. 11. The department may enforce the requirements of this
19 chapter to the extent permissible under applicable law.
20 Sec. 12. The commissioner may take appropriate action to
21 enforce this chapter by imposing a civil penalty not to exceed ten
22 thousand dollars ($10,000) per violation.
23 Sec. 13. (a) In complying with the requirements of this chapter,
24 an insurer may not publish or otherwise reveal information
25 regarding the actual amount of rebates the insurer receives on a
26 product, manufacturer, or pharmacy specific basis. This
27 information is protected as a trade secret (as defined in
28 IC 24-2-3-2) and may not be published or otherwise disclosed.
29 (b) An insurer shall impose the confidentiality requirements of
30 this section on any vendor or third party that performs health care
31 or administrative services on behalf of the insurer and that may
32 receive or have access to the rebate information.
SB 88—LS 6449/DI 137 6
COMMITTEE REPORT
Madam President: The Senate Committee on Health and Provider
Services, to which was referred Senate Bill No. 88, has had the same
under consideration and begs leave to report the same back to the
Senate with the recommendation that said bill DO PASS.
(Reference is to SB 88 as introduced.)
CHARBONNEAU, Chairperson
Committee Vote: Yeas 7, Nays 4
_____
SENATE MOTION
Madam President: I move that Senate Bill 88 be amended to read as
follows:
Page 1, line 4, after "48." insert "Individual".
Page 1, line 13, delete "a" and insert "an individual".
Page 1, line 15, delete "or a".
Page 1, line 16, delete "group contract (as defined in
IC 27-13-1-16)".
Page 2, line 2, after "is" insert "issued on an individual basis;
and that is".
Page 2, line 4, after "300gg-91)." insert "The term includes
coverage of a dependent of the covered individual under an
individual policy or contract described in subdivisions (1) through
(3).".
Page 2, line 6, after "individual." insert "The term includes a third
party administrator, including a pharmacy benefit manager (as
defined in IC 27-1-24.5-12).".
Page 2, line 38, delete "of insurance".
Page 2, line 42, delete "section" and insert "chapter".
Page 3, after line 12, begin a new paragraph and insert:
"SECTION 2. IC 27-1-49 IS ADDED TO THE INDIANA CODE
AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2022]:
Chapter 49. Group Prescription Drug Rebates
Sec. 1. As used in this chapter, "covered individual" means an
individual who is entitled to health insurance coverage.
Sec. 2. As used in this chapter, "defined cost sharing" means a
deductible payment or coinsurance amount imposed on a covered
SB 88—LS 6449/DI 137 7
individual for a covered prescription drug under the covered
individual's health insurance coverage.
Sec. 3. As used in this chapter, "health insurance coverage"
includes:
(1) a group policy of accident and sickness insurance (as
defined in IC 27-8-5-1);
(2) a group contract (as defined in IC 27-13-1-16) that
provides coverage for basic health care services (as defined in
IC 27-13-1-4); and
(3) any other group health plan that limits eligibility to
members of a specific group;
and that is subject to state law regulating insurance and offers
health insurance coverage (as defined in 42 U.S.C. 300gg-91). The
term includes coverage of a dependent of the covered individual
under a group policy or contract described in subdivisions (1)
through (3).
Sec. 4. As used in this chapter, "insurer" means an insurer that
provides health insurance coverage to a covered individual. The
term includes a third party administrator, including a pharmacy
benefit manager (as defined in IC 27-1-24.5-12).
Sec. 5. As used in this chapter, "price protection rebate" means
a negotiated price concession that accrues directly or indirectly to
an insurer, or another party on behalf of an insurer, if there is an
increase in the wholesale acquisition cost of a prescription drug
above a specified threshold.
Sec. 6. As used in this chapter, "rebate" means:
(1) a discount or other negotiated price concession, including
but not limited to base price concessions (whether described
as a rebate or otherwise) and reasonable estimates of price
protection rebates, and performance based price concessions,
that may accrue directly or indirectly or are anticipated to be
passed through to an insurer during the coverage year from
a manufacturer, dispensing pharmacy, or other party in
connection with the dispensing or administration of a
prescription drug; and
(2) a reasonable estimate of any negotiated price concession,
fee, or other administrative cost that is passed through, or is
reasonably anticipated to be passed through, to the insurer
and serves to reduce the insurer's liability for a prescription
drug.
Sec. 7. This section applies to a policy of health insurance
coverage that is issued, delivered, amended, or renewed after
SB 88—LS 6449/DI 137 8
December 31, 2022. An insurer shall pass through to a plan
sponsor one hundred percent (100%) of all rebates received or
estimated to be received by the insurer concerning the dispensing
or administration of prescription drugs to the covered individuals
of the plan sponsor.
Sec. 8. At the time of contracting, an insurer shall provide plan
sponsors the option of calculating defined cost sharing for covered
individuals of the plan sponsor at the point of sale based on a price
that is reduced by some or all of the rebates received or estimated
to be received by the insurer concerning the dispensing or
administration of the prescription drug.
Sec. 9. Nothing in this chapter prohibits an insurer from
decreasing a covered individual's defined cost sharing by an
amount greater than the amount required under section 7 of this
chapter.
Sec. 10. An insurer shall disclose the following information to a
plan sponsor on at least an annual basis:
(1) The approximate amount of rebates expected to be
received by the insurer concerning the dispensing or
administration of prescription drugs to the covered
individuals of the plan sponsor.
(2) An explanation that the plan sponsor may choose to:
(A) apply the rebates to reduce premiums for all covered
individuals; or
(B) calculate defined cost sharing for a covered individual
at the point of sale based on a price that is reduced by
rebates received or estimated to be received by the insurer
concerning the dispensing or administration of the covered
individual's prescription drugs.
(3) An explanation that, in the individual market, IC 27-1-48
requires that covered individual defined cost sharing be
calculated at the point of sale based on a price that is reduced
by at least eighty-five percent (85%) of the rebates received
or estimated to be received by the insurer concerning the
dispensing or administration of the covered individual's
prescription drugs.
Sec. 11. The department may enforce the requirements of this
chapter to the extent permissible under applicable law.
Sec. 12. The commissioner may take appropriate action to
enforce this chapter by imposing a civil penalty not to exceed ten
thousand dollars ($10,000) per violation.
Sec. 13. (a) In complying with the requirements of this chapter,
SB 88—LS 6449/DI 137 9
an insurer may not publish or otherwise reveal information
regarding the actual amount of rebates the insurer receives on a
product, manufacturer, or pharmacy specific basis. This
information is protected as a trade secret (as defined in
IC 24-2-3-2) and may not be published or otherwise disclosed.
(b) An insurer shall impose the confidentiality requirements of
this section on any vendor or third party that performs health care
or administrative services on behalf of the insurer and that may
receive or have access to the rebate information.".
Renumber all SECTIONS consecutively.
(Reference is to SB 88 as printed January 21, 2022.)
CHARBONNEAU
SB 88—LS 6449/DI 137