S.B. 389
- *SB389*
SENATE BILL NO. 389–SENATORS SCHEIBLE, STONE; AND DALY
MARCH 17, 2025
____________
Referred to Committee on Health and Human Services
SUMMARY—Revises provisions relating to the administration of
pharmacy benefits under Medicaid and certain other
health plans. (BDR 38-240)
FISCAL NOTE: Effect on Local Government: No.
Effect on the State: Yes.
~
EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted.
AN ACT relating to prescription drugs; requiring the Department of
Health and Human Services to select and contract with a
state pharmacy benefit manager to manage pharmacy
benefits for Medicaid and certain other health benefit
plans; prescribing certain duties of the state pharmacy
benefit manager; requiring that the Department approve
certain contracts entered into by the state pharmacy
benefit manager; prohibiting the state pharmacy benefit
manager from engaging in certain activities; requiring a
Medicaid managed care organization to contract with and
utilize the state pharmacy benefit manager to manage
pharmacy benefits; requiring a Medicaid managed care
organization to provide certain information to the
Department upon request; and providing other matters
properly relating thereto.
Legislative Counsel’s Digest:
Existing law authorizes the Department of Health and Human Services to enter 1
into a contract with a pharmacy benefit manager or a health maintenance 2
organization to manage coverage of prescription drugs under the State Plan for 3
Medicaid, the Children’s Health Insurance Program and certain other health benefit 4
plans that elect to use the list of preferred prescription drugs established for 5
Medicaid as their formulary. (NRS 422.4025, 422.4053) 6
Sections 12 and 15 of this bill instead require the Department to, not later than 7
January 1, 2030, select and enter into a contract with one pharmacy benefit 8
manager, known as the state pharmacy benefit manager, to manage all such 9
coverage of prescription drugs. Sections 12 and 13 of this bill prescribe certain 10
required terms of such a contract. Section 4 of this bill prescribes the required 11
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contents of an application to serve as the state pharmacy benefit manager. Section 5 12
of this bill requires the Department to adopt regulations establishing: (1) the criteria 13
that a pharmacy benefit manager must meet in order to serve as the state pharmacy 14
benefit manager; and (2) certain requirements relating to the payment of 15
pharmacies for services rendered under the contract between the Department and 16
the state pharmacy benefit manager. Section 8 of this bill requires each Medicaid 17
managed care organization to contract with and utilize the state pharmacy benefit 18
manager to administer all pharmacy benefits for recipients of Medicaid who receive 19
such benefits through the Medicaid managed care organization. Section 8 also 20
requires each Medicaid managed care organization to, upon request of the 21
Department, disclose the expenditures of the Medicaid managed care organization 22
associated with providing pharmacy benefits to recipients of Medicaid. 23
Section 6 of this bill requires that the Department approve any contract 24
between the state pharmacy benefit manager and a pharmacy or an entity that 25
contracts on behalf of a pharmacy if the contract is for the provision of benefits 26
under the contract between the state pharmacy benefit manager and the 27
Department, or any revision, suspension or termination of such a contract between 28
the state pharmacy benefit manager and a pharmacy, in order for the contract, 29
revision, suspension or termination to become effective. Section 6 also authorizes 30
the Department to change certain payment arrangements as necessary to comply 31
with federal requirements. Finally, section 6 prohibits the state pharmacy benefit 32
manager from entering into, renewing or amending a contract that conflicts with the 33
obligations of the state pharmacy benefit manager under the provisions of this bill. 34
Sections 2 and 3 of this bill define certain terms, and section 7 of this bill 35
establishes the applicability of those definitions. Section 9 of this bill applies 36
certain other definitions in existing law to sections 4-6. Sections 10, 11, 13 and 14 37
of this bill make conforming changes to transfer certain duties to the state pharmacy 38
benefit manager and revise certain references in accordance with the provisions of 39
this bill. 40
THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN
SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:
Section 1. Chapter 422 of NRS is hereby amended by adding 1
thereto the provisions set forth as sections 2 to 6, inclusive, of this 2
act. 3
Sec. 2. “Medicaid managed care organization” means a 4
health maintenance organization with which the Department 5
enters into a contract pursuant to NRS 422.273 to provide health 6
care services through managed care to recipients of Medicaid. 7
Sec. 3. “State pharmacy benefit manager” means the 8
pharmacy benefit manager that enters into a contract with the 9
Department pursuant to NRS 422.4053. 10
Sec. 4. 1. A pharmacy benefit manager that meets the 11
eligibility requirements established pursuant to section 5 of this 12
act may apply to become the state pharmacy benefit manager by 13
submitting an application to the Department on a form prescribed 14
by the Department. The application must include, without 15
limitation, disclosures of: 16
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(a) Any activity, policy, practice, contract or agreement of the 1
applicant that may directly or indirectly present a conflict of 2
interest in the relationship between the applicant and the 3
Department or a Medicaid managed care organization, including, 4
without limitation, any such activity, policy, practice, contract or 5
agreement that operates solely or partially outside this State; 6
(b) Any direct or indirect fees, charges or assessments that the 7
applicant imposes on any pharmacy in this State: 8
(1) With which the applicant shares common ownership, 9
management or control; 10
(2) Which is owned, managed or controlled by any 11
management, parent or subsidiary of the applicant, any company 12
jointly held by the applicant or any company otherwise affiliated 13
with the applicant by a common owner, manager or holding 14
company; 15
(3) For which the board of directors of the pharmacy 16
shares any members in common with the board of directors of the 17
applicant; or 18
(4) Which shares any manager in common with the 19
applicant; 20
(c) All common ownership, common management, common 21
members of a board of directors, shared managers or shared 22
control between: 23
(1) The applicant, or any management, parent, subsidiary 24
or jointly held company of the applicant or any company otherwise 25
affiliated by a common owner, manager or holding company with 26
the applicant; and 27
(2) Any of the following entities: 28
(I) A Medicaid managed care organization or a 29
company affiliated with a Medicaid managed care organization; 30
(II) A pharmacy services administrative organization, 31
any other entity that contracts on behalf of a pharmacy or any 32
company affiliated with a pharmacy services administrative 33
organization or such an entity; 34
(III) A wholesaler, as defined in NRS 639.016, or any 35
company affiliated with a wholesaler; 36
(IV) A third party, other than a Medicaid managed care 37
organization, or any company affiliated with such a third party; 38
and 39
(V) A pharmacy or any company affiliated with a 40
pharmacy; and 41
(d) All financial arrangements, including the terms of each 42
such arrangement, currently in effect between the applicant and a 43
manufacturer or labeler of prescription drugs, including without 44
limitation, an arrangement for: 45
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(1) The management of a formulary; 1
(2) Fees relating to data sales; and 2
(3) Education and support for claims processing. 3
2. As used in this section, “third party” means any insurer or 4
organization providing health coverage or benefits in accordance 5
with state or federal law. 6
Sec. 5. 1. The Department shall adopt regulations 7
establishing: 8
(a) The criteria that a pharmacy benefit manager must meet in 9
order to be eligible to enter into a contract with the Department 10
pursuant to NRS 422.4053 to serve as the state pharmacy benefit 11
manager. 12
(b) The methodology for reimbursement to the pharmacies for 13
providing benefits under the contract entered into pursuant to 14
NRS 422.4053. 15
(c) Dispensing fees paid to pharmacies and pharmacists for 16
providing benefits under the contract entered into pursuant to 17
NRS 422.4053. In establishing those dispensing fees, the 18
Department may consider applicable guidance promulgated by the 19
Centers for Medicare and Medicaid Services of the United States 20
Department of Health and Human Services. 21
2. To the extent authorized by federal law, the dispensing fees 22
established pursuant to paragraph (c) of subsection 1 may vary by 23
pharmacy type, including, without limitation, rural and 24
independently owned pharmacies, pharmacies owned by a 25
corporation operating in multiple states and pharmacies owned 26
and contracted by a health care facility that is registered as a 27
covered entity pursuant to 42 U.S.C. § 256b. 28
Sec. 6. 1. The state pharmacy benefit manager shall submit 29
to the Department for review: 30
(a) Each contract for the provision of benefits under the 31
contract entered into pursuant to NRS 422.4053 between the state 32
pharmacy benefit manager and a pharmacy or an entity that 33
contracts on behalf of such a pharmacy; 34
(b) Each revision to the terms and conditions of a contract 35
described in paragraph (a); and 36
(c) Each suspension or termination of a contract described in 37
paragraph (a). 38
2. The Department shall review each submission received 39
pursuant to subsection 1 and approve or deny the contract, 40
revision, suspension or termination, as applicable. A contract, 41
revision, suspension or termination is not effective until the 42
contract, revision, suspension or termination, as applicable, is 43
approved by the Department. 44
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3. The Department may change a payment arrangement 1
between the Department and a Medicaid managed care 2
organization, the Department and the state pharmacy benefit 3
manager or a Medicaid managed care organization and the state 4
pharmacy benefit manager in order to comply with federal or state 5
law or regulations or any other agreement between the 6
Department and the Federal Government. 7
4. The state pharmacy benefit manager shall not enter into, 8
renew or amend any contract that is inconsistent with: 9
(a) The terms and conditions of the contract entered into by 10
the state pharmacy benefit manager with the Department pursuant 11
to NRS 422.4053; or 12
(b) The reimbursement methodologies and dispensing fees 13
established by the Department pursuant to subsection 1 of section 14
5 of this act. 15
5. Any contract entered into by the state pharmacy benefit 16
manager in violation of subsection 4 is void and unenforceable. 17
Sec. 7. NRS 422.001 is hereby amended to read as follows: 18
422.001 As used in this chapter, unless the context otherwise 19
requires, the words and terms defined in NRS 422.003 to 422.054, 20
inclusive, and sections 2 and 3 of this act have the meanings 21
ascribed to them in those sections. 22
Sec. 8. NRS 422.273 is hereby amended to read as follows: 23
422.273 1. For any Medicaid managed care program 24
established in the State of Nevada, the Department shall contract 25
only with a health maintenance organization that has: 26
(a) Negotiated in good faith with a federally-qualified health 27
center to provide health care services for the health maintenance 28
organization; 29
(b) Negotiated in good faith with the University Medical Center 30
of Southern Nevada to provide inpatient and ambulatory services to 31
recipients of Medicaid; and 32
(c) Negotiated in good faith with the University of Nevada 33
School of Medicine to provide health care services to recipients of 34
Medicaid. 35
Nothing in this section shall be construed as exempting a 36
federally-qualified health center, the University Medical Center of 37
Southern Nevada or the University of Nevada School of Medicine 38
from the requirements for contracting with the health maintenance 39
organization. 40
2. During the development and implementation of any 41
Medicaid managed care program, the Department shall cooperate 42
with the University of Nevada School of Medicine by assisting in 43
the provision of an adequate and diverse group of patients upon 44
which the school may base its educational programs. 45
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3. The University of Nevada School of Medicine may establish 1
a nonprofit organization to assist in any research necessary for the 2
development of a Medicaid managed care program, receive and 3
accept gifts, grants and donations to support such a program and 4
assist in establishing educational services about the program for 5
recipients of Medicaid. 6
4. For the purpose of contracting with a Medicaid managed 7
care program pursuant to this section, a health maintenance 8
organization is exempt from the provisions of NRS 695C.123. 9
5. A Medicaid managed care program must require each 10
health maintenance organization that enters into a contract with 11
the Department pursuant to this section to contract with and 12
utilize the state pharmacy benefit manager for the purpose of 13
administering all pharmacy benefits for recipients of Medicaid 14
who receive pharmacy benefits through the health maintenance 15
organization. 16
6. Each health maintenance organization that enters into a 17
contract with the Department pursuant to this section shall, upon 18
the request of the Department and in the form prescribed by the 19
Department, disclose the expenditures of the health maintenance 20
organization associated with providing pharmacy benefits for 21
recipients of Medicaid. 22
7. The provisions of this section apply to any managed care 23
organization, including a health maintenance organization, that 24
provides health care services to recipients of Medicaid under the 25
State Plan for Medicaid or the Children’s Health Insurance Program 26
pursuant to a contract with the Division. Such a managed care 27
organization or health maintenance organization is not required to 28
establish a system for conducting external reviews of adverse 29
determinations in accordance with chapter 695B, 695C or 695G of 30
NRS. This subsection does not exempt such a managed care 31
organization or health maintenance organization for services 32
provided pursuant to any other contract. 33
[6.] 8. As used in this section, unless the context otherwise 34
requires: 35
(a) “Federally-qualified health center” has the meaning ascribed 36
to it in 42 U.S.C. § 1396d(l)(2)(B). 37
(b) “Health maintenance organization” has the meaning ascribed 38
to it in NRS 695C.030. 39
(c) “Managed care organization” has the meaning ascribed to it 40
in NRS 695G.050. 41
Sec. 9. NRS 422.401 is hereby amended to read as follows: 42
422.401 As used in NRS 422.401 to 422.406, inclusive, and 43
sections 4, 5 and 6 of this act, unless the context otherwise requires, 44
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the words and terms defined in NRS 422.4015 to 422.4024, 1
inclusive, have the meanings ascribed to them in those sections. 2
Sec. 10. NRS 422.4025 is hereby amended to read as follows: 3
422.4025 1. The Department shall [: 4
(a) By] , by regulation, develop a list of preferred prescription 5
drugs to be used for the Medicaid program and the Children’s 6
Health Insurance Program, and each public or nonprofit health 7
benefit plan that elects to use the list of preferred prescription drugs 8
as its formulary pursuant to NRS 287.012, 287.0433 or 687B.407 . 9
[; and 10
(b) Negotiate and enter into agreements to purchase the drugs 11
included on the list of preferred prescription drugs on behalf of the 12
health benefit plans described in paragraph (a) or enter into a 13
contract pursuant to NRS 422.4053 with a pharmacy benefit 14
manager, health maintenance organization or one or more public or 15
private entities in this State, the District of Columbia or other states 16
or territories of the United States, as appropriate, to negotiate such 17
agreements.] 18
2. The Department shall, by regulation, establish a list of 19
prescription drugs which must be excluded from any restrictions that 20
are imposed by the Medicaid program on drugs that are on the list of 21
preferred prescription drugs established pursuant to subsection 1. 22
The list established pursuant to this subsection must include, 23
without limitation: 24
(a) Prescription drugs that are prescribed for the treatment of the 25
human immunodeficiency virus, including, without limitation, 26
antiretroviral medications; 27
(b) Antirejection medications for organ transplants; 28
(c) Antihemophilic medications; and 29
(d) Any prescription drug which the Board identifies as 30
appropriate for exclusion from any restrictions that are imposed by 31
the Medicaid program on drugs that are on the list of preferred 32
prescription drugs. 33
3. The regulations must provide that the Board makes the final 34
determination of: 35
(a) Whether a class of therapeutic prescription drugs is included 36
on the list of preferred prescription drugs and is excluded from any 37
restrictions that are imposed by the Medicaid program on drugs that 38
are on the list of preferred prescription drugs; 39
(b) Which therapeutically equivalent prescription drugs will be 40
reviewed for inclusion on the list of preferred prescription drugs and 41
for exclusion from any restrictions that are imposed by the Medicaid 42
program on drugs that are on the list of preferred prescription drugs; 43
and 44
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(c) Which prescription drugs should be excluded from any 1
restrictions that are imposed by the Medicaid program on drugs that 2
are on the list of preferred prescription drugs based on continuity of 3
care concerning a specific diagnosis, condition, class of therapeutic 4
prescription drugs or medical specialty. 5
4. The list of preferred prescription drugs established pursuant 6
to subsection 1 must include, without limitation: 7
(a) Any prescription drug determined by the Board to be 8
essential for treating sickle cell disease and its variants; and 9
(b) Prescription drugs to prevent the acquisition of human 10
immunodeficiency virus. 11
5. The regulations must provide that each new pharmaceutical 12
product and each existing pharmaceutical product for which there is 13
new clinical evidence supporting its inclusion on the list of preferred 14
prescription drugs must be made available pursuant to the Medicaid 15
program with prior authorization until the Board reviews the product 16
or the evidence. 17
6. The Medicaid program must cover a prescription drug that is 18
not included on the list of preferred prescription drugs as if the drug 19
were included on that list if: 20
(a) The drug is: 21
(1) Used to treat hepatitis C; 22
(2) Used to provide medication-assisted treatment for opioid 23
use disorder; 24
(3) Used to support safe withdrawal from substance use 25
disorder; or 26
(4) In the same class as a drug on the list of preferred 27
prescription drugs; and 28
(b) All preferred prescription drugs within the same class as the 29
drug are unsuitable for a recipient of Medicaid because: 30
(1) The recipient is allergic to all preferred prescription drugs 31
within the same class as the drug; 32
(2) All preferred prescription drugs within the same class as 33
the drug are contraindicated for the recipient or are likely to interact 34
in a harmful manner with another drug that the recipient is taking; 35
(3) The recipient has a history of adverse reactions to all 36
preferred prescription drugs within the same class as the drug; or 37
(4) The drug has a unique indication that is supported by 38
peer-reviewed clinical evidence or approved by the United States 39
Food and Drug Administration. 40
7. The Medicaid program must automatically cover any typical 41
or atypical antipsychotic medication or anticonvulsant medication 42
that is not on the list of preferred prescription drugs upon the 43
demonstrated therapeutic failure of one drug on that list to 44
adequately treat the condition of a recipient of Medicaid. 45
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8. On or before February 1 of each year, the Department shall: 1
(a) Compile a report concerning the [agreements negotiated 2
pursuant to paragraph (b) of subsection 1 and contracts] contract 3
entered into pursuant to subsection 1 of NRS 422.4053 with the 4
state pharmacy benefit manager and any contracts entered into 5
pursuant to subsection 2 of NRS 422.4053, which must include, 6
without limitation, the financial effects of obtaining prescription 7
drugs through [those agreements and contracts, in total and 8
aggregated separately for agreements negotiated by the Department, 9
contracts with a pharmacy benefit manager, contracts with a health 10
maintenance organization and contracts with public and private 11
entities from this State, the District of Columbia and other states and 12
territories of the United States;] each such contract; and 13
(b) Post the report on an Internet website maintained by the 14
Department and submit the report to the Director of the Legislative 15
Counsel Bureau for transmittal to: 16
(1) In odd-numbered years, the Legislature; or 17
(2) In even-numbered years, the Legislative Commission. 18
Sec. 11. NRS 422.4032 is hereby amended to read as follows: 19
422.4032 1. The [Department or a] state pharmacy benefit 20
manager [or health maintenance organization with which the 21
Department contracts pursuant to NRS 422.4053 to manage 22
prescription drug benefits] shall allow a recipient of Medicaid who 23
has been diagnosed with stage 3 or 4 cancer or the attending 24
practitioner of the recipient to apply for an exemption from step 25
therapy that would otherwise be required pursuant to NRS 422.403 26
to instead use a prescription drug prescribed by the attending 27
practitioner to treat the cancer or any symptom thereof of the 28
recipient of Medicaid. The application process must: 29
(a) Allow the recipient or attending practitioner, or a designated 30
advocate for the recipient or attending practitioner, to present to the 31
[Department,] state pharmacy benefit manager [or health 32
maintenance organization, as applicable,] the clinical rationale for 33
the exemption and any relevant medical information. 34
(b) Clearly prescribe the information and supporting documents 35
that must be submitted with the application, the criteria that will be 36
used to evaluate the request and the conditions under which an 37
expedited determination pursuant to subsection 4 is warranted. 38
(c) Require the review of each application by at least one 39
physician, registered nurse or pharmacist. 40
2. The information and supporting documentation required 41
pursuant to paragraph (b) of subsection 1: 42
(a) May include, without limitation: 43
(1) The medical history or other health records of the 44
recipient demonstrating that the recipient has: 45
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(I) Tried other drugs included in the pharmacological 1
class of drugs for which the exemption is requested without success; 2
or 3
(II) Taken the requested drug for a clinically appropriate 4
amount of time to establish stability in relation to the cancer and the 5
guidelines of the prescribing practitioner; and 6
(2) Any other relevant clinical information. 7
(b) Must not include any information or supporting 8
documentation that is not necessary to make a determination about 9
the application. 10
3. Except as otherwise provided in subsection 4, the 11
[Department,] state pharmacy benefit manager [or health 12
maintenance organization, as applicable, that receives] , upon 13
receiving an application for an exemption pursuant to subsection 1 , 14
shall: 15
(a) Make a determination concerning the application if the 16
application is complete, or request additional information or 17
documentation necessary to complete the application not later than 18
72 hours after receiving the application; and 19
(b) If [it] the state pharmacy benefit manager requests 20
additional information or documentation, make a determination 21
concerning the application not later than 72 hours after receiving the 22
requested information or documentation. 23
4. If, in the opinion of the attending practitioner, step therapy 24
may seriously jeopardize the life or health of the recipient, the 25
[Department,] state pharmacy benefit manager [or health 26
maintenance organization that receives an application for an 27
exemption pursuant to subsection 1, as applicable,] must make a 28
determination concerning the application as expeditiously as 29
necessary to avoid serious jeopardy to the life or health of the 30
recipient. 31
5. The [Department,] state pharmacy benefit manager [or 32
health maintenance organization, as applicable,] shall disclose to a 33
recipient or attending practitioner who submits an application for an 34
exemption from step therapy pursuant to subsection 1 the 35
qualifications of each person who will review the application. 36
6. The [Department,] state pharmacy benefit manager [or 37
health maintenance organization, as applicable,] must grant an 38
exemption from step therapy in response to an application submitted 39
pursuant to subsection 1 if: 40
(a) Any treatment otherwise required under the step therapy or 41
any drug in the same pharmacological class or having the same 42
mechanism of action as the drug for which the exemption is 43
requested has not been effective at treating the cancer or symptom 44
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of the recipient when prescribed in accordance with clinical 1
indications, clinical guidelines or other peer-reviewed evidence; 2
(b) Delay of effective treatment would have severe or 3
irreversible consequences for the recipient and the treatment 4
otherwise required under the step therapy is not reasonably expected 5
to be effective based on the physical or mental characteristics of the 6
recipient and the known characteristics of the treatment; 7
(c) Each treatment otherwise required under the step therapy: 8
(1) Is contraindicated for the recipient or has caused or is 9
likely, based on peer-reviewed clinical evidence, to cause an adverse 10
reaction or other physical harm to the recipient; or 11
(2) Has prevented or is likely to prevent the recipient from 12
performing the responsibilities of his or her occupation or engaging 13
in activities of daily living, as defined in 42 C.F.R. § 441.505; or 14
(d) The condition of the recipient is stable while being treated 15
with the prescription drug for which the exemption is requested and 16
the recipient has previously received approval for coverage of that 17
drug. 18
7. If the [Department,] state pharmacy benefit manager [or 19
health maintenance organization, as applicable,] approves an 20
application for an exemption from step therapy pursuant to this 21
section, the State must pay the nonfederal share of the cost of the 22
prescription drug to which the exemption applies. The 23
[Department,] state pharmacy benefit manager [or health 24
maintenance organization] may initially limit the coverage to a 1-25
week supply of the drug for which the exemption is granted. If the 26
attending practitioner determines after 1 week that the drug is 27
effective at treating the cancer or symptom for which it was 28
prescribed, the State must continue to pay the nonfederal share of 29
the cost of the drug for as long as it is necessary to treat the recipient 30
for the cancer or symptom. The [Department,] state pharmacy 31
benefit manager [or health maintenance organization, as applicable,] 32
may conduct a review not more frequently than once each quarter to 33
determine, in accordance with available medical evidence, whether 34
the drug remains necessary to treat the recipient for the cancer or 35
symptom. The [Department,] state pharmacy benefit manager [or 36
health maintenance organization, as applicable,] shall provide a 37
report of the review to the recipient. 38
8. The Department and [any] the state pharmacy benefit 39
manager [or health maintenance organization with which the 40
Department contracts pursuant to NRS 422.4053 to manage 41
prescription drug benefits] shall post in an easily accessible location 42
on an Internet website maintained by the Department [,] or state 43
pharmacy benefit manager , [or health maintenance organization,] as 44
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applicable, a form for requesting an exemption pursuant to this 1
section. 2
9. As used in this section, “attending practitioner” means the 3
practitioner, as defined in NRS 639.0125, who has primary 4
responsibility for the treatment of the cancer or any symptom of 5
such cancer of a recipient. 6
Sec. 12. NRS 422.4053 is hereby amended to read as follows: 7
422.4053 1. [Except as otherwise provided in subsection 2, 8
the] The Department shall [directly] : 9
(a) Evaluate applications received pursuant to section 4 of this 10
act and choose an applicant to serve as the state pharmacy benefit 11
manager; and 12
(b) Enter into a contract with the state pharmacy benefit 13
manager chosen pursuant to paragraph (a) to, except as otherwise 14
provided in subsection 2, manage, direct and coordinate all 15
payments and rebates for prescription drugs and all other services 16
and payments relating to the provision of prescription drugs under 17
the State Plan for Medicaid , [and] the Children’s Health Insurance 18
Program [.] and the other health benefit plans described in 19
subsection 1 of NRS 422.4025. 20
2. The Department may enter into a contract with [: 21
(a) A pharmacy benefit manager for the provision of any 22
services described in subsection 1. 23
(b) A health maintenance organization pursuant to NRS 422.273 24
for the provision of any of the services described in subsection 1 for 25
recipients of Medicaid or recipients of insurance through the 26
Children’s Health Insurance Program who receive coverage through 27
a Medicaid managed care program. 28
(c) One] one or more public or private entities from this State, 29
the District of Columbia or other states or territories of the United 30
States for the collaborative purchasing of prescription drugs in 31
accordance with subsection 3 of NRS 277.110. 32
3. [A] The contract entered into pursuant to [paragraph (a) or 33
(b) of] subsection [2] 1 must: 34
(a) Include the provisions required by NRS 422.4056; 35
(b) Require the state pharmacy benefit manager [or health 36
maintenance organization, as applicable,] to disclose to the 37
Department any information relating to the services covered by the 38
contract, including, without limitation, information concerning 39
dispensing fees, measures for the control of costs, rebates collected 40
and paid , [and] any fees and charges imposed by the state pharmacy 41
benefit manager [or health maintenance organization] pursuant to 42
the contract [;] and any other sources of payment received by the 43
pharmacy benefit manager for prescription drugs covered by the 44
contract; 45
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(c) Require the state pharmacy benefit manager [or health 1
maintenance organization] to comply with the provisions of this 2
chapter regarding the provision of prescription drugs under the State 3
Plan for Medicaid and the Children’s Health Insurance Program to 4
the same extent as the Department [. 5
4. In addition to meeting the requirements of subsection 3, a 6
contract entered into pursuant to: 7
(a) Paragraph (a) of subsection 2 may require] ; 8
(d) Require the state pharmacy benefit manager to comply 9
with all other applicable state and federal laws; 10
(e) Require the state pharmacy benefit manager to negotiate 11
and enter into agreements to purchase the drugs included on the 12
list of preferred prescription drugs developed pursuant to NRS 13
422.4025, except where those drugs are purchased through a 14
contract entered into pursuant to subsection 2; 15
(f) Require the state pharmacy benefit manager to provide the 16
entire amount of any rebates received for the purchase of 17
prescription drugs, including, without limitation, rebates for the 18
purchase of prescription drugs by an entity other than the 19
Department, to the Department [. 20
(b) Paragraph (b) of subsection 2 must require the health 21
maintenance organization to provide to the Department the entire 22
amount of any rebates received for the purchase of prescription 23
drugs, including, without limitation, rebates for the purchase of 24
prescription drugs by an entity other than the Department, less an 25
administrative fee in an amount prescribed by the contract. The 26
Department shall adopt policies prescribing the maximum amount 27
of such an administrative fee.] ; and 28
(g) Establish a fiduciary duty between the Department and the 29
state pharmacy benefit manager. 30
4. In addition to meeting the requirements of subsection 3, a 31
contract entered into pursuant to subsection 1 must prohibit the 32
state pharmacy benefit manager from: 33
(a) Using spread pricing; 34
(b) Creating, modifying, implementing or indirectly 35
establishing any fee to be imposed upon a pharmacy, a pharmacist 36
or a recipient of benefits under the contract without first seeking 37
and obtaining written approval from the Department; 38
(c) Requiring a recipient of benefits under the contract to 39
obtain a specialty drug from a specialty pharmacy owned by or 40
otherwise associated with the state pharmacy benefit manager; 41
(d) Requiring or incentivizing a recipient of benefits under the 42
contract to use a specific pharmacy; and 43
(e) Requiring a recipient of benefits under the contract to use 44
a mail order pharmacy or Internet pharmacy. 45
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5. As used in this section: 1
(a) “Internet pharmacy” has the meaning ascribed to it in 2
NRS 639.00865. 3
(b) “Spread pricing” means any technique by which a 4
pharmacy benefit manager charges or claims an amount from an 5
insurer for drugs or services provided by a pharmacy or 6
pharmacist that is different from the amount the pharmacy benefit 7
manager pays the pharmacy or pharmacist, as applicable, for 8
those drugs or services. 9
Sec. 13. NRS 422.4056 is hereby amended to read as follows: 10
422.4056 1. [Any] The contract between the Department and 11
[a] the state pharmacy benefit manager [or health maintenance 12
organization entered into pursuant to NRS 422.4053] must require 13
the state pharmacy benefit manager [or health maintenance 14
organization, as applicable,] to: 15
(a) Submit to and cooperate with an annual audit by the 16
Department to evaluate the compliance of the state pharmacy 17
benefit manager [or health maintenance organization] with the 18
agreement and generally accepted accounting and business 19
practices. The audit must analyze all claims processed by the state 20
pharmacy benefit manager [or health maintenance organization] 21
pursuant to the agreement. 22
(b) Obtain from an independent accountant, at the expense of the 23
state pharmacy benefit manager , [or health maintenance 24
organization, as applicable,] an annual audit of internal controls to 25
ensure the integrity of financial transactions and claims processing. 26
2. The Department shall post the results of any audit conducted 27
pursuant to paragraph (a) of subsection 1 on an Internet website 28
maintained by the Department. 29
Sec. 14. NRS 683A.1785 is hereby amended to read as 30
follows: 31
683A.1785 1. A pharmacy benefit manager shall not: 32
(a) Discriminate against a covered entity, a contract pharmacy or 33
a 340B drug in the amount of reimbursement for any item or service 34
or the procedures for obtaining such reimbursement; 35
(b) Assess any fee, chargeback, clawback or adjustment against 36
a covered entity or contract pharmacy on the basis that the covered 37
entity or contract pharmacy dispenses a 340B drug or otherwise 38
limit the ability of a covered entity or contract pharmacy to receive 39
the full benefit of purchasing the 340B drug at or below the ceiling 40
price, as calculated pursuant to 42 U.S.C. § 256b(a)(1); 41
(c) Exclude a covered entity or contract pharmacy from any 42
network because the covered entity or contract pharmacy dispenses 43
a 340B drug; 44
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(d) Restrict the ability of a person to receive a 340B drug, 1
including, without limitation, by imposing a copayment, 2
coinsurance, deductible or other cost-sharing obligation on the drug 3
that is different from a similar drug on the basis that the drug is a 4
340B drug; 5
(e) Restrict the methods by which a covered entity or contract 6
pharmacy may dispense or deliver a 340B drug or the entity through 7
which a covered entity may dispense or deliver such a drug in a 8
manner that does not apply to drugs that are not 340B drugs; or 9
(f) Prohibit a covered entity or contract pharmacy from 10
purchasing a 340B drug or interfere with the ability of a covered 11
entity or contract pharmacy to purchase a 340B drug. 12
2. This section does not: 13
(a) Apply to [a] the state pharmacy benefit manager [that has 14
entered into a contract with the Department of Health and Human 15
Services pursuant to NRS 422.4053] when the state pharmacy 16
benefit manager is managing prescription drug benefits under 17
Medicaid, including, without limitation, where such benefits are 18
delivered through a Medicaid managed care organization. 19
(b) Prohibit the Department of Health and Human Services, the 20
Division of Health Care Financing and Policy of the Department of 21
Health and Human Services or a Medicaid managed care 22
organization from taking such actions as are necessary to: 23
(1) Prevent duplicate discounts or rebates where prohibited 24
by 42 U.S.C. § 256b(a)(5)(A); or 25
(2) Ensure the financial stability of the Medicaid program, 26
including, without limitation, by including or enforcing provisions 27
in [any] the contract with [a] the state pharmacy benefit manager . 28
[entered into pursuant to NRS 422.4053.] 29
3. As used in this section: 30
(a) “340B drug” means a prescription drug that is purchased by 31
a covered entity under the 340B Program. 32
(b) “340B Program” means the drug pricing program established 33
by the United States Secretary of Health and Human Services 34
pursuant to section 340B of the Public Health Service Act, 42 35
U.S.C. § 256b, as amended. 36
(c) “Contract pharmacy” means a pharmacy that enters into a 37
contract with a covered entity to dispense 340B drugs and provide 38
related pharmacy services to the patients of the covered entity. 39
(d) “Covered entity” has the meaning ascribed to it in 42 U.S.C. 40
§ 256b(a)(4). 41
(e) “Medicaid managed care organization” has the meaning 42
ascribed to it in 42 U.S.C. § 1396b(m). 43
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(f) “Network” means a defined set of providers of health care 1
who are under contract with a pharmacy benefit manager or third 2
party to provide health care services to covered persons. 3
(g) “State pharmacy benefit manager” has the meaning 4
ascribed to it in section 3 of this act. 5
Sec. 15. 1. The initial contract between the Department of 6
Health and Human Services and the state pharmacy benefit manager 7
entered into pursuant to NRS 422.4053, as amended by section 12 8
of this act, must become effective on or before January 1, 2030. 9
2. As used in this section, “state pharmacy benefit manager” 10
has the meaning ascribed to it in section 3 of this act. 11
Sec. 16. The provisions of NRS 218D.380 do not apply to any 12
provision of this act which adds or revises a requirement to submit a 13
report to the Legislature. 14
Sec. 17. 1. This section becomes effective upon passage and 15
approval. 16
2. Sections 1 to 16, inclusive, of this act become effective: 17
(a) Upon passage and approval for the purpose of adopting any 18
regulations and performing any preparatory administrative tasks that 19
are necessary to carry out the provisions of this act; and 20
(b) On the effective date of the initial contract entered into 21
between the Department of Health and Human Services and the 22
state pharmacy benefit manager pursuant to NRS 422.4053, as 23
amended by section 12 of this act, for all other purposes. 24
H