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words in boldface type and underscored are additions.
Regular Session, 2014
SENATE BILL NO. 410
BY SENATOR MILLS
HEALTH/ACC INSURANCE. Provides for the transparency of Maximum Allowable Cost
Lists for prescription drugs. (8/1/14)
AN ACT1
To enact Subpart C-1 of Part II of Chapter 6 of Title 22 of the Louisiana Revised Statutes2
of 1950, to be comprised of R.S. 22:1863 through 1865, relative to Maximum3
Allowable Cost Lists for prescription drugs; to provide with respect to definitions;4
to provide for the regulation of pharmacy benefit manager's maintenance and use of5
Maximum Allowable Cost Lists for prescription drugs; to provide with respect to an6
appeals process; and to provide for related matters.7
Be it enacted by the Legislature of Louisiana:8
Section 1. Subpart C-1 of Part II of Chapter 6 of Title 22 of the Louisiana Revised9
Statutes of 1950, comprised of R.S. 22:1863 through 1865, is hereby enacted to read as10
follows:11
Subpart C-1. PHARMACY BENEFIT MANAGER'S MAINTENANCE AND USE12
OF "MAXIMUM ALLOWABLE COST LISTS" FOR PRESCRIPTION DRUGS13
§1863. Definitions14
As used in this Subpart, the following definitions shall apply:15
(1) "Maximum Allowable Cost List" means a listing of the National Drug16
Code used by a pharmacy benefits manager setting the maximum allowable cost17 SB NO. 410
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on which reimbursement to a pharmacy or pharmacist may be based.1
(2) "NDC" means the National Drug Code, a numerical identifier2
assigned to all prescription drugs.3
(3) "Pharmacist" means a licensed pharmacist as defined in R.S.4
22:1852(8).5
(4) "Pharmacist services" means products, goods, or services provided6
as a part of the practice of pharmacy as defined in R.S. 22:1852(9).7
(5) "Pharmacy" means any appropriately licensed place where8
prescription drugs are dispensed as defined in R.S. 22:1852(10).9
(6) "Pharmacy benefits manager" means an entity that administers or10
manages a pharmacy benefits plan or program.11
(7) "Pharmacy benefits plan" or "pharmacy benefits program" means12
a plan or program that pays for, reimburses, covers the cost of, or otherwise13
provides for pharmacist services to individuals who reside in or are employed14
in Louisiana.15
§1864. Requirements for use of the NDC by a pharmacy benefits manager16
A. Before a pharmacy benefits manager places or continues a particular17
NDC or Maximum Allowable Cost List, the following requirements shall be18
met:19
(1) The NDC shall be listed as "A" or "B" rated in the most recent20
version of the FDA's Approved Drug Products with Therapeutic Equivalence21
Evaluations, also known as the Orange Book, or have an "NR" or "NA" rating22
or a similar rating by a nationally recognized reference.23
(2) The NDC shall be available for purchase by pharmacies in the state24
from national or regional wholesalers.25
(3) The NDC shall not be obsolete.26
B. A pharmacy benefits manager shall be required to:27
(1) Provide access to its Maximum Allowable Cost List to each pharmacy28
subject to the list.29 SB NO. 410
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(2) Update its Maximum Allowable Cost List on a timely basis, but in no1
event longer than seven calendar days from a change in the methodology on2
which the Maximum Allowable Cost List is based or in the value of a variable3
involved in the methodology.4
(3) Provide a process for each pharmacy subject to the list to review an5
update to the Maximum Allowable Cost List.6
§1865. Appeals7
A. The pharmacy benefits manager shall provide a reasonable8
administrative appeal procedure to allow pharmacies to challenge maximum9
allowable costs for a specific NDC or NDCs as not meeting the requirements of10
this Subpart or being below the cost at which the pharmacy may obtain the11
NDC. Within seven business days after the applicable fill date, a pharmacy may12
file an appeal by following the appeal process as provided for in this Subpart.13
The pharmacy benefits manager shall respond to a challenge within seven14
business days after receipt of the challenge.15
B. If an appeal made pursuant to this Section is upheld, the pharmacy16
benefits manager shall take the following actions:17
(1) Make the change in the Maximum Allowable Cost List.18
(2) Permit the challenging pharmacy or pharmacist to reverse and rebill19
the claim in question.20
(3) Make the change effective for each similarly situated pharmacy as21
defined by the payor subject to the Maximum Allowable Cost List.22
C. If an appeal made pursuant to this Section is denied, the pharmacy23
benefits manager shall provide the challenging pharmacy or pharmacist the24
NDC number from national or regional wholesalers operating in Louisiana.25
D. A violation of this Subpart shall be deemed an unfair or deceptive act26
and practice pursuant to R.S. 22:1961 et seq.27 SB NO. 410
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The original instrument and the following digest, which constitutes no part
of the legislative instrument, were prepared by Cheryl Horne.
DIGEST
Mills (SB 410)
Proposed law provides for definitions of:
(1)Maximum Allowable Cost List
(2)National Drug Code (NDC)
(3)Pharmacist
(4)Pharmacist services
(5)Pharmacy
(6)Pharmacy benefits manager
(7)Pharmacy benefits plan or program
Proposed law allows a pharmacy benefits manager to use the NDC only when the following
conditions have been met:
(1)The NDC is listed as "A" or "B" rated in the most recent version of the FDA's
Orange Book.
(2)The NDC is available for purchase by pharmacies in the state from national or
regional wholesalers.
(3)The NDC is not obsolete.
Proposed law requires a pharmacy benefits manager to:
(1)Provide access to its Maximum Allowable Cost List.
(2)Update its Maximum Allowable Cost List on a timely basis.
(3) Provide a process for each pharmacy to review an update to the Maximum Allowable
Cost List.
Proposed law requires a pharmacy benefits manager to provide a reasonable administrative
appeal procedure. Permits a pharmacy to file an appeal by following the appeal process in
proposed law. Requires the pharmacy benefits manager to respond to a challenge within
seven business days after receipt of a challenge.
Proposed law requires a pharmacy benefits manager to perform the following if an appeal
is upheld:
(1)Make the change in the Maximum Allowable Cost List.
(2)Permit the challenging pharmacy or pharmacist to reverse and rebill the claim.
(3)Make the change effective for each similarly situated pharmacy.
Proposed law requires a pharmacy benefits manager to provide the challenging pharmacy SB NO. 410
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or pharmacist the NDC number if an appeal is denied.
Proposed law deems a violation of proposed law to be an unfair or deceptive act and practice
pursuant to R.S. 22:1961 et seq.
Effective August 1, 2014.
(Adds R.S. 22:1863-1865)
Summary of Amendments Adopted by Senate
Committee Amendments Proposed by Senate Committee on Insurance to the original
bill.
1. Permits a pharmacy to file an appeal within seven business days after the
applicable fill date by following the appeal process in proposed law.
2. Provides that a violation of proposed law shall be deemed an unfair or
deceptive act and practice pursuant to present law.