2019 Regular Session ENROLLED
SENATE BILL NO. 41
BY SENATOR MILLS AND REPRESENTATIVES ADAMS, AMEDEE, ARMES,
BAGNERIS, BERTHELOT, BILLIOT, BISHOP, CHAD BROWN,
TERRY BROWN, ROBBY CARTER, STEVE CARTER, CHANEY,
CONNICK, COX, DAVIS, DEVILLIER, GISCLAIR, GUINN, JIMMY
HARRIS, LANCE HARRIS, HILL, HOFFMANN, HORTON,
HOWARD, JACKSON, JEFFERSON, JENKINS, MIKE JOHNSON,
JONES, MCMAHEN, MIGUEZ, DUSTIN MILLER, GREGORY
MILLER, JAY MORRIS, PIERRE, PUGH, PYLANT,
SCHEXNAYDER, TURNER, W HITE AND ZERINGUE
Prefiled pursuant to Article III, Section 2(A)(4)(b)(i) of the Constitution of Louisiana.
1 AN ACT
2 To amend and reenact R.S. 22:1863(2) and to enact R.S. 22:1863(9) and 1867, Part VII of
3 Chapter 14 of Title 37 of the Louisiana Revised Statutes of 1950, to be comprised
4 of R.S. 37:1252 through 1254, and Chapter 36 of Title 40 of the Louisiana Revised
5 Statutes of 1950, to be comprised of R.S. 40:2861 through 2871, relative to
6 regulation of pharmacy benefit managers; to provide legislative intent and public
7 health policy; to provide for protection of the public; to provide for general
8 applicability; to provide for licensure by the Louisiana Department of Insurance; to
9 provide for permitting by the Louisiana Board of Pharmacy; to provide for minimum
10 licensure and permit criteria; to provide for rulemaking; to provide for penalties; to
11 provide for unfair trade practices; to provide for enforcement; to provide for
12 authority of the attorney general; to provide for written notice; to provide for a
13 hearing; to provide for an appeal; to provide for a cause of action under the Unfair
14 Trade Practices and Consumer Protection Law; to provide for severability; to provide
15 for an effective date; and to provide for related matters.
16 Be it enacted by the Legislature of Louisiana:
17 Section 1. R.S. 22:1863(2) is hereby amended and reenacted and R.S. 22:1863(9)
18 and 1867 are hereby enacted to read as follows:
19 §1863. Definitions
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1 As used in this Subpart, the following definitions apply:
2 * * *
3 (2) "Maximum Allowable Cost List" means a listing of the National Drug
4 Code used by a pharmacy benefit manager setting the maximum allowable cost on
5 which reimbursement to a pharmacy or pharmacist may be based. "Maximum
6 Allowable Cost List" shall include any term that a pharmacy benefit manager
7 or a healthcare insurer may use to establish reimbursement rates for generic
8 and multi-source brand drugs to a pharmacist or pharmacy for pharmacist
9 services. The term "Maximum Allowable Cost List" shall not include any rate
10 mutually agreed to and set forth in writing in the contract between the
11 pharmacy benefit manager and the pharmacy or its agent and shall not include
12 the National Average Drug Acquisition Cost. A pharmacy benefit manager may
13 use effective rate pricing for a pharmacist or pharmacy that is not a local
14 pharmacy or local pharmacist as defined in R.S. 46:460.36(A).
15 * * *
16 (9) "Spread pricing" means any amount a pharmacy benefit manager
17 charges or claims from a health plan provider or managed care organization for
18 payment of a prescription or for pharmacy services that is different than the
19 amount the pharmacy benefit manager paid to the pharmacist or pharmacy
20 who filled the prescription or provided the pharmacy services.
21 * * *
22 §1867. Prohibition on spread pricing; notice exception
23 A. A pharmacy benefit manager is prohibited from conducting or
24 participating in spread pricing in this state unless the pharmacy benefit
25 manager provides written notice as provided in Subsection B of this Section.
26 B. The notice issued by a pharmacy benefit manager, or a health
27 insurance issuer where the health insurance issuer has agreed to issue the
28 notice, that utilizes spread pricing shall be:
29 (1) Required for each health insurance issuer or plan provider in which
30 the pharmacy benefit manager engaged or participated in spread pricing.
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1 (2) Delivered to the policy holder.
2 (3) Provided at least biannually.
3 (4) Indicative of the aggregate amount of spread pricing charged by the
4 pharmacy benefit manager during the period.
5 (5) Written in plain, simple, and understandable English.
6 C. Any violation of this Section that is committed or performed with such
7 frequency as to indicate a general business practice shall be subject to the
8 provisions of the Unfair Trade Practices and Consumer Protection Law, R.S.
9 51:1401 et seq., as provided in R.S. 40:2870(B).
10 * * *
11 Section 2. Part VII of Chapter 14 of Title 37 of the Louisiana Revised Statutes of
12 1950, comprised of R.S. 37:1252 through 1254, is hereby enacted to read as follows:
13 PART VII. PHARMACY BENEF IT MANAGERS
14 §1252. Louisiana Board of Pharmacy; authority to regulate pharmacy benefit
15 managers
16 A. Pursuant to the authority vested in the board in this Chapter and as
17 specifically provided for in the Pharmacy Benefit Manager Licensing Law, R.S.
18 40:2861 et seq., the board shall create and issue a permit for pharmacy benefit
19 managers as defined in R.S. 40:2863.
20 B. A pharmacy benefit manager may be but is not required to be
21 permitted under Part IV of this Chapter if it administers, develops, maintains,
22 performs, or provides one or more pharmacy services in this state or that affects
23 one or more beneficiaries of a pharmacy benefit management plan administered
24 by the pharmacy benefit manager, as set forth in R.S. 40:2868.
25 §1253. Pharmacy benefit managers; permit; annual report; fees
26 A. The board shall promulgate rules and regulations to implement the
27 provisions of this Part and the applicable provisions of the Pharmacy Benefit
28 Manager Licensing Law.
29 B. The board may promulgate rules and regulations to specify the annual
30 reporting requirements for the pharmacy benefit manager.
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1 §1254. Pharmacy benefit managers; enforcement
2 The board shall enforce the provisions of this Part as provided for in this
3 Chapter and R.S. 40:2871.
4 Section 3. Chapter 36 of Title 40 of the Louisiana Revised Statutes of 1950,
5 comprised of R.S. 40:2861 through 2871, is hereby enacted to read as follows:
6 CHAPTER 36. REGULATION OF PHARMACY BENEF IT MANAGERS
7 §2861. Legislative intent and public health policy
8 It is the intent of the legislature that the purpose of this Chapter is to
9 license, permit, and monitor pharmacy benefit managers to provide for the
10 effective control and regulation of their activities, maintain and enforce order
11 regarding the prescribing, dispensing, marketing, selling, managing, and use of
12 prescription drugs in this state, and to protect the health, safety, and general
13 welfare of the citizens and residents of this state.
14 §2862. Short title
15 This Chapter shall be known and may be cited as the "Pharmacy Benefit
16 Manager Licensing Law".
17 §2863. Definitions
18 As used in this Chapter, the following definitions shall apply:
19 (1) "Attorney general" means the Louisiana attorney general.
20 (2) "Beneficiary" means a person who resides or is employed in this state
21 and is covered or is eligible to be covered by a health plan.
22 (3) "Board of Pharmacy" means the Louisiana Board of Pharmacy.
23 (4) "Commissioner of insurance" means the Louisiana commissioner of
24 insurance.
25 (5) "Department of Insurance" means the Louisiana Department of
26 Insurance.
27 (6) "Department of Justice" means the Louisiana Department of Justice.
28 (7) "Health plan" means an individual or group plan or program which
29 is established by contract, certificate, law, plan, policy, subscriber agreement,
30 or by any other method and which is entered into, issued, or offered for the
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1 purpose of arranging for, delivering, paying for, providing, or reimbursing any
2 of the costs of health or medical care, including pharmacy services, drugs, or
3 devices.
4 (8) "Pharmacy benefit management plan" and "pharmacy benefits
5 program" mean a plan or program that pays for, reimburses, covers the cost of,
6 or otherwise provides for pharmacist services, drugs, or devices to individuals
7 who reside in or are employed in Louisiana.
8 (9) "Pharmacy benefit manager" and "PBM" mean any person or
9 business who administers the prescription drug or device program of one or
10 more health plans on behalf of a third party in accordance with a pharmacy
11 benefit program. This term includes any agent or representative of a pharmacy
12 benefit manager hired or contracted by the pharmacy benefit manager to assist
13 in the administering of the drug program and any wholly or partially owned or
14 controlled subsidiary of a pharmacy benefit manager.
15 §2864. Duties of pharmacy benefit managers
16 A. A pharmacy benefit manager shall owe the beneficiaries of any
17 pharmacy benefit management plan administered by the pharmacy benefit
18 manager and to the entities that have entered into a contract with the pharmacy
19 benefit manager the duties of good faith, honesty, trust, confidence, and candor.
20 B. The standard for the fulfillment of a pharmacy benefit manager's
21 duties shall be to act with a high degree of care, skill, prudence, and diligence
22 required of a reasonable and prudent person with substantial experience and
23 expertise in the management of pharmacy benefit management plans and
24 payment of claims.
25 C. Failure of a pharmacy benefit manager to satisfy the duties
26 established in this Section shall not create a separate or independent cause of
27 action nor shall it be construed to prohibit any cause of action established by or
28 recognized in federal or state law.
29 §2865. General licensing and permitting requirements
30 A. Every pharmacy benefit manager that does business in this state or
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1 pays for benefits for a beneficiary through a pharmacy benefit management
2 plan shall be licensed or permitted as required by this Chapter.
3 B. No license or permit shall be issued to a pharmacy benefit manager
4 who has not registered with the Louisiana secretary of state to conduct business
5 within the state.
6 C. Each license and permit shall be valid only for the applicant listed on
7 the application.
8 D.(1) A pharmacy benefit manager license or permit is not transferable.
9 (2) No license or permit shall be subject to sale, assignment or other
10 transfer, voluntary or involuntary.
11 (3) In the event the ownership of the pharmacy benefit manager changes
12 by fifty percent or more after the initial issuance of the license or permit, the
13 ownership shall be deemed sufficiently different as to require a new pharmacy
14 benefit manager license or permit.
15 (4) The continued operation of a pharmacy benefit manager under a
16 license or permit issued pursuant to this Chapter after its ownership has
17 changed by fifty percent or more shall constitute sufficient basis for finding that
18 the pharmacy benefit manager is operating in this state without a valid license
19 or permit in violation of this Chapter.
20 §2866. General applicability
21 A. The licensure and regulation requirements set forth pursuant to this
22 Chapter shall apply generally to any pharmacy benefit manager regardless of
23 plan or benefit financing.
24 B. Nothing in this Chapter shall be construed to require coverage of any
25 specific drug in any health plan, but shall apply once a drug is covered or
26 included on a health plan formulary.
27 §2867. Pharmacy benefit manager; regulation by commissioner of insurance;
28 applicability of the Louisiana Insurance Code
29 A. Every pharmacy benefit manager that does business in this state shall
30 be licensed as required by the Louisiana Insurance Code.
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1 B. Every pharmacy benefit manager licensed by the commissioner of
2 insurance shall abide by the provisions of the Louisiana Insurance Code and the
3 rules and regulations of the Department of Insurance regarding the pharmacy
4 benefit manager's business regulated by the commissioner of insurance.
5 §2868. Pharmacy benefit manager; regulation by Board of Pharmacy;
6 requirements for permitting
7 A. A pharmacy benefit manager may obtain and maintain a permit from
8 the Board of Pharmacy if the pharmacy benefit manager administers, develops,
9 maintains, performs, or provides one or more of the following pharmacy
10 services in this state or that affects one or more beneficiaries of a pharmacy
11 benefit management plan administered by the pharmacy benefit manager:
12 (1) Adjudication of appeals or grievances related to prescription drug
13 coverage.
14 (2) Disease management programs. For purposes of this Subsection,
15 "disease management program" means a program adopted to guide and care
16 for beneficiaries with chronic health problems to improve the quality of health
17 care provided to them and prevent future need for medical resources by using
18 an integrated comprehensive approach.
19 (3) Drug formularies. For purposes of this Subsection, "drug formulary"
20 means a list of prescription medications or pharmaceutical products developed
21 and approved by each health plan that may be dispensed to a beneficiary
22 through participating pharmacies. A drug formulary may also be referred to
23 as a "preferred drug list", "prior authorization list", or "pharmacopeia".
24 (4) Drug regimen reviews. For purposes of this Subsection, "drug
25 regimen review" means third-party review of all medications a beneficiary is
26 currently using, whether prescribed or over-the-counter, and administered by
27 any method.
28 (5) Prescription drug management programs. For purposes of this
29 Subsection, "prescription drug management program" means a program
30 developed and designed to administer the prescription drug benefit as part of
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1 a health plan, and as part of such administration a PBM may contract with
2 pharmacies for implementation and dispensing drugs in accordance with the
3 program.
4 (6) Processing of prior authorization requests. For purposes of this
5 Subsection, "processing of prior authorization requests" means making a
6 determination regarding payment coverage based on an advance approval
7 request submitted by a physician or other healthcare provider before a specific
8 procedure, service, device, supply, or medication is delivered to the beneficiary.
9 (7) Quality care dosing services. For purposes of this Subsection,
10 "quality care dosing services" means electronically checking prescription
11 medications before they are filled at the pharmacy to ensure that the quantity
12 and dosage is consistent with the recommendations of the United States Food
13 and Drug Administration and others.
14 (8) Step therapy procedures. For purposes of this Subsection, "step
15 therapy procedure" means protocols and policies that establish a specific
16 sequence in which prescription drugs for a medical condition are approved for
17 coverage by a health plan for a beneficiary which generally requires cheaper
18 drugs to be used before more costly drugs. Step therapy may also be referred
19 to as "fail first" protocol.
20 (9) Utilization management and utilization reviews. For purposes of this
21 Subsection, "utilization management" and "utilization review" mean
22 third-party review and approval of appropriateness and necessity of care that
23 a healthcare provider has indicated for a beneficiary prior to delivery and
24 coverage of such care.
25 (10) Any other act, service, operation, or transaction incidental to or
26 forming a part of the compounding, filling, dispensing, exchanging, giving,
27 offering for sale, or selling drugs, medicines, poisons, or devices in this state by
28 pharmacists or pharmacies, pursuant to a prescription or an order of
29 physicians, dentists, veterinarians, or other licensed practitioners, requiring,
30 involving, or employing the science or art of any branch of the pharmacy
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1 profession, study, or training.
2 B. Every pharmacy benefit manager permitted by the Board of
3 Pharmacy shall abide by the applicable provisions of the Louisiana Pharmacy
4 Practice Act and the rules and regulations of the Board of Pharmacy.
5 §2869. Pharmacy benefit manager monitoring advisory council; membership;
6 functions
7 A. There is hereby created a pharmacy benefit manager monitoring
8 advisory council, referred to hereafter in this Chapter as the "advisory
9 council", that shall consist of the following members, each of whom may
10 appoint a designee:
11 (1) The commissioner of the Department of Insurance.
12 (2) The president of the Louisiana State Board of Medical Examiners.
13 (3) The president of the Louisiana Board of Pharmacy.
14 (4) The attorney general.
15 (5) The director of the public protection division of the Department of
16 Justice.
17 (6) The secretary of the Louisiana Department of Health.
18 (7) The president of the Louisiana Academy of Physician Assistants.
19 (8) The president of the Louisiana State Medical Society.
20 (9) The president of the Louisiana Association of Nurse Practitioners.
21 (10) The president of the Louisiana Pharmacists Association.
22 (11) The president of the Louisiana Independent Pharmacies Association.
23 (12) The president of the National Association of Chain Drug Stores.
24 (13) The president of the Pharmaceutical Research and Manufacturers
25 of America.
26 (14) The president of the Louisiana Academy of Medical Psychologists.
27 (15) The president of the Louisiana Association of Health Plans.
28 (16) The president of a pharmacy benefit manager licensed by the
29 Louisiana Board of Pharmacy, selected by the Louisiana affiliate of the
30 Pharmaceutical Care Management Association from a list of interested and
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1 qualified individuals.
2 (17) The president of the Louisiana Association of Business and Industry.
3 (18) The chief executive officer of the Louisiana Business Group on
4 Health.
5 (19) The president of the Louisiana AFL-CIO.
6 (20) The president of the Louisiana Association of Health Underwriters.
7 B. The members of the advisory council shall serve at the pleasure of
8 their respective appointing authorities. Seven members shall constitute a
9 quorum for the transaction of all business. The members shall elect a chairman
10 and vice chairman whose duties shall be established by the advisory council.
11 The member elected to serve as chairman shall fix a time and place for regular
12 meetings of the advisory council, which shall meet at least quarterly. The
13 advisory council shall establish policies and procedures necessary to carry out
14 its duties. Expenses for the administrative staffing of the advisory council shall
15 be provided for from the licensing fees paid by pharmacy benefit managers and
16 may be transferred between state agencies by memorandum of understanding
17 or cooperative endeavor agreement.
18 C. The commissioner of insurance and the Board of Pharmacy may
19 utilize the full advisory council or individual member agency expertise for the
20 purpose of investigating a complaint against a pharmacy benefit manager or
21 conducting an audit of a pharmacy benefit manager. In exercising the authority
22 provided for in this Subsection, the same provisions of confidentiality applicable
23 to the Department of Insurance and Louisiana Board of Pharmacy during an
24 investigation shall apply to the advisory council or individual member agencies
25 whose expertise is being utilized. The advisory council may meet in executive
26 session, as necessary, to discuss matters involving an active investigation.
27 D. The advisory council shall provide monitoring of pharmacy benefit
28 managers in Louisiana to advise the legislature, commissioner of insurance, and
29 Board of Pharmacy on the most effective and efficient manner of regulation of
30 pharmacy benefit managers to ensure the protection of the public. Any licensed
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1 pharmacy benefit manager operating in Louisiana shall provide full cooperation
2 with the advisory council on matters including but not limited to those set forth
3 in Subsection E of this Section.
4 E. The advisory council shall advise on matters that include but are not
5 limited to the licensure and regulation of pharmacy benefit managers set forth
6 in Title 22, Title 37, and Title 40 of the Louisiana Revised Statutes of 1950,
7 applicable rules and regulations of state agencies, and federal laws or rules
8 relative to pharmacy benefit managers.
9 §2870. Prohibited acts; unfair and deceptive trade practices
10 A. A pharmacy benefit manager in Louisiana shall not:
11 (1) Commit any unfair and deceptive trade practice prohibited by R.S.
12 22:1964(15).
13 (2) Perform any act that violates the duties, obligations, and
14 responsibilities imposed under the Louisiana Insurance Code on a pharmacy
15 benefit manager.
16 (3) Buy, sell, transfer, or provide personal healthcare or contact
17 information of any beneficiary to any other party for any purpose with one
18 exception. A pharmacy benefit manager may provide such information
19 regarding beneficiaries of a health plan to that health plan provider if requested
20 by the health plan provider.
21 (4) Conduct or participate in spread pricing as defined in R.S. 22:1863(9)
22 without providing the notice required by R.S. 22:1867.
23 (5)(a) Directly or indirectly engage in patient steering to a pharmacy in
24 which the pharmacy benefit manager maintains an ownership interest or
25 control without making a written disclosure and receiving acknowledgment
26 from the patient. The disclosure required by this Paragraph shall provide notice
27 that the pharmacy benefit manager has an ownership interest in or control of
28 the pharmacy, and that the patient has the right under the law to use any
29 alternate pharmacy that they choose. The pharmacy benefit manager is
30 prohibited from retaliation or further attempts to influence the patient, or treat
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1 the patient or the patient's claim any differently if the patient chooses to use the
2 alternate pharmacy.
3 (b) The provisions of this Paragraph shall not apply to employers,
4 unions, associations, or other persons who employ, own, operate, control, or
5 contract directly with a pharmacy or pharmacist for the purpose of managing
6 or controlling prescription costs paid for the benefit of an employee or member
7 or those covered by the employee or member's plan, or when the persons
8 contract with a pharmacy benefit manager to steer employees or members to
9 pharmacists or pharmacies which the person owns, operates, or controls.
10 (6)(a) Penalize a beneficiary or provide an inducement to the beneficiary
11 for the purpose of getting the beneficiary to use specific retail, mail order
12 pharmacy, or another network pharmacy provider in which a pharmacy benefit
13 manager has an ownership or controlling interest or that has an ownership or
14 controlling interest in a pharmacy benefit manager.
15 (b) For purposes of this Paragraph, "inducement" means the providing
16 of financial incentives, including variations in premiums, deductibles,
17 copayments, or coinsurance.
18 (c) The provisions of this Paragraph shall not apply to employers, unions,
19 associations, or other persons who employ, own, operate, control, or contract
20 directly with a pharmacy or pharmacist for the purpose of managing or
21 controlling prescription costs paid for the benefit of an employee or member or
22 those covered by the employee or member's plan, or when the persons contract
23 with a pharmacy benefit manager to steer employees or members to
24 pharmacists or pharmacies which the person owns, operates, or controls.
25 (7) Retroactively deny or reduce a claim of a pharmacist or pharmacy
26 for payment or demand repayment of all or part of a claim after the claim has
27 been approved by the pharmacy benefit manager as authorized by R.S.
28 22:1856.1.
29 (8) Reimburse a local pharmacist or local pharmacy, as defined in R.S.
30 46:460.36(A), less than the amount it reimburses chain pharmacies, mail-order
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1 pharmacies, specialty pharmacies, or affiliates of the pharmacy benefit manager
2 for the same drug or device or for the same pharmacy service in this state.
3 (9) Fail to update prices as required by R.S. 22:1857.
4 (10)(a) Fail to honor maximum allowable cost (MAC) prices as set forth
5 in R.S. 22:1863 et seq.
6 (b) A pharmacy benefit manager shall not require a pharmacist or
7 pharmacy to purchase drugs from any particular wholesaler. However, if a
8 pharmacy benefit manager recommends or provides a wholesaler, then that
9 wholesaler must be willing and able to honor the pharmacy benefit manager's
10 MAC price, ship the order, and have receipt of the order within two business
11 days with no additional charge to the pharmacist.
12 (c) The wholesaler with the lowest price, which is listed as the MAC
13 price, is not obligated to sell or ship to a nonmember pharmacist or pharmacy.
14 If the wholesaler chooses not to sell the drug to the pharmacist or pharmacy,
15 then the MAC price set by the pharmacy benefit manager must be adjusted to
16 the price available to the pharmacist or pharmacy through another wholesaler.
17 (11) Fail to meet the payment standards established in R.S. 22:1856.
18 (12) Fail to provide detailed remittance advice to pharmacists and
19 pharmacies in compliance with R.S. 22:1856.
20 (13)(a) Fail to pay any state or local sales tax imposed on any drug,
21 device, or pharmacy services or to remit the sales tax to the appropriate
22 pharmacist or pharmacy for the tax proceeds to be forwarded to the sales tax
23 authority.
24 (b) A pharmacy benefit manager who does not pay the sales tax shall be
25 liable to the taxing authority for the tax, interest, penalties, and any other fees
26 or costs imposed by law for failure to pay sales taxes.
27 (c) No pharmacy benefit manager shall deduct the taxes from any
28 amount due to a pharmacist or pharmacy for a drug, device, or pharmacy
29 service or charge or pay anyone a fee or surcharge for paying any sales tax or
30 remitting any sales tax proceeds to a pharmacist or pharmacy if that fee or
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1 surcharge would be imposed directly or indirectly on the pharmacist or
2 pharmacy.
3 (d) All pharmacy benefit managers who pay any out-of-state pharmacist
4 or pharmacy for drugs or devices shipped to a beneficiary in this state or for
5 pharmacy services rendered to a beneficiary which is taxable in this state shall
6 remit the tax directly to the appropriate taxing authority.
7 (e) Any pharmacist or pharmacy who does not receive sales tax proceeds
8 from a pharmacy benefit manager for any drug, device, or pharmacy service
9 which is subject to sales taxes shall have no responsibility for payment of the
10 taxes if the pharmacist or pharmacy provides written notification to the
11 appropriate taxing authority, the Department of Insurance, and the Board of
12 Pharmacy of the pharmacy benefit manager's failure to remit the sales taxes at
13 the time the next sales tax return is due to be filed.
14 (f) State or local sales taxes and other applicable state-imposed taxes or
15 fees shall be considered as part of the allowable cost and shall be included in the
16 claim submitted by a pharmacist or pharmacy.
17 (14) Restrict early refills on maintenance drugs to an amount less than
18 seven days for a prescription of at least a thirty-day supply. However, at the
19 direction of the Louisiana Department of Health, for purposes of administering
20 the Medicaid pharmacy benefit program, a pharmacy benefit manager may
21 apply a more restrictive early refill policy without violating the provisions of
22 this Paragraph.
23 (15) Require a beneficiary to follow a plan's step therapy protocol if the
24 prescribed drug is on the health plan's prescription drug formulary, the
25 beneficiary has tried the step therapy required prescription drug while under
26 his current or previous health plan, and the provider has submitted a
27 justification and supporting clinical documentation that such prescription drug
28 was discontinued due to lack of efficacy or effectiveness, diminished effect, or
29 an adverse effect or event.
30 (16) Delay a decision on a request for authorization to dispense a
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1 prescription drug for more than seventy-two hours, or twenty-four hours in
2 exigent circumstances in which the patient, in the opinion of the prescribing
3 provider, pharmacy, or pharmacist submitting the authorization request, is
4 suffering from a health condition that may seriously jeopardize the patient's
5 life, health, or ability to regain maximum function. A request for authorization
6 shall include relevant data or appropriate documentation to render a decision
7 on a request for authorization.
8 (17) Exploit prescription drug information obtained from beneficiaries
9 for monetary gain or economic power over beneficiaries, pharmacists, or
10 pharmacies.
11 (18) Sell, exchange, or use in any manner prescription drug information
12 regarding a beneficiary obtained through a beneficiary's use of a prescription
13 for purposes of marketing, solicitation, consumer steering, referral, or any other
14 practice or act, except as otherwise provided for in this Section, that provides
15 the pharmacy benefit manager or any of its affiliates or subsidiaries economic
16 power or control over pharmacists or pharmacies or interfer in the free choice
17 of a beneficiary.
18 (19) Engage in drug repackaging and markups. A pharmacy benefit
19 manager that owns or controls a mail-order pharmacy shall not allow the
20 mail-order pharmacy to repackage drugs and sell the repackaged items at
21 higher prices than the original average wholesale price unless beneficiaries who
22 may buy the repackaged drugs are informed in writing that the drugs have been
23 repackaged and are being sold at the higher price.
24 (20) Operate in Louisiana without either being registered with and in
25 good standing with the Louisiana secretary of state to do business in Louisiana
26 or being licensed by and in good standing with the commissioner of insurance,
27 as provided by this Chapter.
28 B.(1) The commission of any of the acts or any combination of acts
29 prohibited by this Section shall be considered an unfair method of competition
30 and unfair practice or act in accordance with the Unfair Trade Practices and
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1 Consumer Protection Law, R.S. 51:1401 et seq., if the violations are committed
2 or performed with such frequency as to indicate a general business practice.
3 Notwithstanding any provision of law to the contrary, the private right of action
4 created by R.S. 51:1409 shall not apply to this Section.
5 (2) For purposes of this Section, a violation shall be considered to have
6 occurred each time a prohibited act is committed.
7 (3) Each day that a pharmacy benefit manager operates without being
8 registered with and in good standing with the secretary of state to do business
9 in Louisiana or without being licensed by and in good standing with the
10 commissioner of insurance, as provided by this Chapter, shall be considered a
11 separate violation.
12 C.(1) Nothing in this Section shall be construed to interfere with or
13 violate a consumer's right to know where the consumer may have access to the
14 lowest cost drugs, whether a consumer is utilizing insurance or other
15 third-party reimbursement or not.
16 (2) Nothing in this Section shall be construed to interfere with the
17 requirement that consumers receive notice of changes to pharmacy networks,
18 such as the inclusion of new pharmacies or removal of existing pharmacies from
19 networks.
20 §2871. Enforcement
21 A. Notwithstanding any provision of law to the contrary, enforcement
22 of the Pharmacy Benefit Manager Licensing Law shall be conducted in
23 accordance with the following requirements:
24 (1)(a) The commissioner of insurance shall be responsible for
25 investigation and enforcement of the provisions of the Louisiana Insurance
26 Code, the applicable provisions of this Chapter, and any rules or regulations
27 promulgated by the Department of Insurance relative to pharmacy benefit
28 managers. The commissioner shall refer any complaint he believes to be outside
29 of his jurisdiction to the Board of Pharmacy or the Louisiana Department of
30 Justice.
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1 (b) The commissioner of insurance may suspend or revoke a pharmacy
2 benefit manager's permit, license, or registration in accordance with the
3 Louisiana Insurance Code and the rules and regulations promulgated by the
4 Department of Insurance relative to pharmacy benefit managers.
5 (2)(a) The Board of Pharmacy shall be responsible for investigation and
6 enforcement of the provisions of the Louisiana Pharmacy Practice Act, the
7 applicable provisions of this Chapter, and any rules or regulations promulgated
8 by the Board of Pharmacy relative to pharmacy benefit managers. The Board
9 of Pharmacy shall refer any complaint it believes to be outside of its jurisdiction
10 to the Department of Insurance or the Louisiana Department of Justice.
11 (b) Upon completion of a complaint investigation or compliance audit,
12 and after notice and an opportunity for an adjudicatory hearing held in
13 accordance with the Administrative Procedure Act, the Board of Pharmacy may
14 suspend, revoke, or place on probation a license, permit, or registration issued
15 to the pharmacy benefit manager or any entity in which the pharmacy benefit
16 manager has an ownership or controlling interest, or take any other action
17 authorized by the Louisiana Pharmacy Practice Act or the rules and regulations
18 of the Board of Pharmacy.
19 B.(1) The commissioner of insurance and the Board of Pharmacy shall
20 be responsible for conducting random compliance audits, which may be desk
21 audits based on data provided by the pharmacy benefit manager, to ensure
22 compliance with this Chapter.
23 (2) A pharmacy benefit manager doing business in Louisiana shall make
24 itself open and available to comply with compliance audit data requests.
25 C. On the first day of each month, the Board of Pharmacy shall submit
26 to the attorney general a report of complaints received against pharmacy
27 benefit managers and the date that each complaint was received during the
28 prior calendar month in a format prescribed by the attorney general. The
29 report shall include a cumulative list of all complaints received against
30 pharmacy benefit managers until final disposition.
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1 D. Nothing in this Section shall be construed as a limitation on the
2 attorney general's power to enforce the Unfair Trade Practices and Consumer
3 Protection Law, R.S. 51:1401 et seq., or to limit his authority in any way under
4 that law, or as a limitation on the attorney general's power to negotiate and
5 enter into a stipulation with a pharmacy benefit manager. Furthermore,
6 nothing in this Section shall prohibit the Board of Pharmacy from referring a
7 complaint or audit finding to the Louisiana Department of Justice.
8 Section 4. If any provision or item of this Act, or the application thereof, is held
9 invalid, such invalidity shall not affect other provisions, items, or applications of the act
10 which can be given effect without the invalid provision, item, or application and to this end
11 the provisions of this Act are hereby declared severable in accordance with R.S. 24:175.
12 Section 5. The provisions of R.S. 40:2869, as enacted by this Act, shall become
13 effective on August 1, 2019.
14 Section 6. Except as provided in Section 5 of this Act, the provisions of this Act shall
15 become effective on July 1, 2020.
PRESIDENT OF THE SENATE
SPEAKER OF THE HOUSE OF REPRESENTATIVES
GOVERNOR OF THE STATE OF LOUISIANA
APPROVED:
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