HLS 12RS-4709 ORIGINAL
Page 1 of 3
Regular Session, 2012
HOUSE STUDY REQUEST NO. 6
BY REPRESENTATIVE PATRICK WILLIAMS
TAX/SALES & USE: Requests the House Ways and Means Committee to study the impact
of pharmacy benefit management contracts on the collection and payment of local
sales and use tax on prescription drugs and pharmacist services
A STUDY REQUEST1
To the House Committee on Ways and Means to study the impact of pharmacy benefit2
management contracts on the collection and payment of local sales and use tax on3
prescription drugs and pharmacist services and to report study findings and4
recommendations to the legislature prior to the convening of the 2013 Regular5
Session of the Legislature of Louisiana.6
WHEREAS, R.S. 47:337.11.1 requires a pharmacy or pharmacist to be responsible7
for collecting any sales and use tax levied by a political subdivision on prescription drugs8
and pharmacist services; and9
WHEREAS, R.S. 47:337.11.1 further requires a health insurance issuer to reimburse10
the pharmacy or pharmacist the amount of such tax in cases in which health insurance11
coverage for prescription drugs and pharmacist services exists; and12
WHEREAS, all contracts executed by a health insurance issuer after January 1, 2009,13
which includes health insurance coverage for prescription drugs and pharmacist services14
shall clearly define the responsibility of the health insurance issuer or the health insurance15
issuer's member or insured for the payment of local taxes on the sale of prescription drugs16
or pharmacist services; and17
WHEREAS, it is not uncommon for a health insurance issuer to enter into18
agreements or business relationships with entities know as pharmacy benefit managers to19 HLS 12RS-4709 ORIGINAL
HSR NO. 6
Page 2 of 3
administer the prescription drug or device portion of one or more health benefit plans on1
behalf of the insurance issuer; and2
WHEREAS, the relationship between the pharmacy benefit manager and health3
insurance issuer is a complex relationship governed by contracts and agreements making it4
very difficult for pharmacists and local sales and use tax collectors to determine which party5
is responsible for local sales and use taxes levied on prescription drugs and pharmacist6
services; and7
WHEREAS, notwithstanding the law which requires health insurance contracts8
executed after January 1, 2009, to clearly define the responsibility of the health insurance9
issuer to reimburse a pharmacist for the local sales and use taxes remitted by the pharmacist10
to the local sales tax collector; health insurance issuers routinely dispute reimbursing11
pharmacists for local sales and use taxes; and12
WHEREAS, pharmacists have been paying and remitting the local sales and use13
taxes to the local collector; however, pharmacists have not been successful in attempts to get14
reimbursement from health insurance issuers or pharmacy benefit managers; and 15
WHEREAS, pharmacists are not the parties who should be paying and collecting the16
sales and use taxes on prescription drugs and pharmacist services; and17
WHEREAS, sales and use taxes levied by local political subdivisions are a large18
portion of the revenue stream for local political subdivisions in order to provide services for19
its citizens; and20
WHEREAS, local political subdivisions have not actively assisted pharmacists in21
enforcing the laws requiring reimbursement for local sales and use taxes paid by pharmacists22
for prescription drugs and pharmacist services; and23
WHEREAS, because of the need to protect local sales and use tax revenues, it is24
imperative that a study into the complex relationship among pharmacists, insureds, health25
insurers, and pharmacy benefit managers be conducted in order to determine a sound public26
policy regarding which party should collect and remit the local sales and use taxes on27
prescription drugs and pharmacist services; and28
WHEREAS, in order to fully study the issues and the relationships among29
pharmacists, insureds, health insurers, and pharmacy benefit managers, it is imperative that30 HLS 12RS-4709 ORIGINAL
HSR NO. 6
Page 3 of 3
the House Ways and Means Committee seek input from the Louisiana Department of1
Insurance, officials from health insurance issuers and pharmacy benefit managers,2
pharmacists, local government officials, and any other industry representatives involved in3
this issue. 4
THEREFORE, the Legislature of Louisiana requests the House Committee on Ways5
and Means to study the impact of pharmacy benefit management contracts on the collection6
and payment of local sales and use tax on prescription drugs and pharmacist services and to7
report its findings to the legislature prior to the convening of the 2013 Regular Session of8
the Legislature of Louisiana.9
DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part
of the legislative instrument. The keyword, one-liner, abstract, and digest do not constitute
part of the law or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
Patrick Williams HSR No. 6
Requests the House Committee on Ways and Means to study the impact of pharmacy benefit
management contracts on the collection and payment of local sales and use tax on
prescription drugs and pharmacist services and to report its findings to the legislature prior
to the convening of the 2013 R. S.