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SENATE FLOOR VERSION
February 21, 2022
COMMITTEE SUBSTITUTE
FOR
SENATE BILL NO. 1324 By: McCortney
An Act relating to pharmacy benefits managers;
amending 36 O.S. 2021, Sections 6960 and 6962, which
relate to definitions and complia nce review; adding
and modifying definitions; updating statutory
reference; prohibiting certain contractual
provisions; requiring pu blication of certain
formulary information; requiring pharmacy benefits
managers to provide certain reports; requiring
certain publication of certain monies received by
pharmacy benefits managers; providing confidentiality
of certain records; providing certain provisions and
compliance measures for defined cost sharing ;
amending 36 O.S. 2021, Section 6964, which relates to
formulary decisions to identify drugs that offer
greatest value; modifying requirements and duties for
pharmacy and therapeutics committee members; amending
51 O.S. 2021, Section 24A.3, which relates to open
records; exempting certain infor mation from open
records; amending 59 O.S. 2021, Sections 357 and 358,
which relate to definitions and pharmacy benefits
management licensure; modifying def initions;
modifying required information for certa in
application forms; providing for codification; and
providing an effective date.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 36 O.S. 2021, Section 6960, is
amended to read as follows:
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Section 6960. For purposes of the Patient's Right to Pharmacy
Choice Act:
1. "Administrative fees" means fees or payments from
pharmaceutical manufacturers to, or otherwise retained by, a
pharmacy benefits manager (PBM) or its designee pursuant to a
contract between a PBM or affiliate and the manufacturer in
connection with the PBM's administering, invoicing, allocating, and
collecting the rebat es;
2. "Aggregate retained rebate percentage " means the percentage
of all rebates received by a PBM from all pharmaceutical
manufacturers which is not passed on to the PBM's health plan or
health insurer clients. The aggregate retained rebate percentage
shall be expressed without disclosing any identifying information
regarding any health plan, prescription drug, or therapeutic class,
and shall be calculated by dividing:
a. the aggregate dollar amount of all rebates that the
PBM received during the prior calendar year from all
pharmaceutical manufacturers that did not pass through
to the pharmacy benefits manager 's health plan or
health insurer clients, by
b. the aggregate dollar amount of all rebates that the
pharmacy benefits manager received during the prior
calendar year from all pharmaceutical manufacturers ;
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3. "Defined cost sharing" means a deductible payment or
coinsurance amount imposed on an enrollee for a covered prescription
drug under the enrollee's health plan;
4. "Formulary" means a list of prescription drugs, any
prescription drug accompanying tiering, and other coverage
information that has been developed by a health insurer or its
designee that is referenced in determining applicable coverage and
benefit levels;
5. "Generic equivalent" means a drug that is designated as
therapeutically equivalent by the United States Food and Drug
Administration's "Approved Drug Products with Therapeutic
Equivalence Evaluations"; provided, however, a drug shall not be
considered a generic equivalent until the drug becomes nationally
available;
6. "Health insurer" means any corporation, association, benefit
society, exchange, pa rtnership or individual licensed by t he
Oklahoma Insurance Code;
7. "Health insurer administrative service fees" means fees or
payments from a health insurer or its designee to, or otherwise
retained by, a PBM or its designee p ursuant to a contract between a
PBM or affiliate and the health insurer or its designee in
connection with the PBM's managing or administering the pharmacy
benefit and administering, invoicing, allocating , and collecting
rebates;
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8. "Health plan" means a policy, contract, certification, or
agreement offered or issued by a health insurer to provide, deliver,
arrange for, pay for, or reimburse any of the costs of health
services;
9. "Insurer" means a health insurer as defined pursu ant to
paragraph 6 of this section;
2. 10. "Mail-order pharmacy" means a pharmacy licensed by this
state that primarily dispenses and delivers covered drugs via common
carrier;
3. 11. "Pharmacy benefits manager " or "PBM" means a person
that, either directly or through an intermediar y, performs pharmacy
benefits management, as defined by paragraph 6 of Section 357 of
Title 59 of the Oklahoma Statutes, and any other person acting for
such person under a contractual or employment relationship in the
performance of pharmacy benefits management for a managed -care
company, nonprofit hospital, medical service organization, insurance
company, third-party payor or a health program administered by a
department of this state;
4. 12. "Pharmacy and therapeutics committee" or "P&T committee"
means a committee at a hospital or a health insurance plan that
decides which drugs will appear on that entity's drug formulary;
13. "Price protection rebate" means a negotiated price
concession that accrues directly or indirectly to the health insurer
or other party on behalf o f the health insurer in the event of an
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increase in the wholesale acquisition cost of a drug above a
specified cost threshold;
14. "Rebates" means:
a. negotiated price concessions including but not limited
to base price concessions , whether described as a
rebate or otherwise, and reasonable estimates of any
price protection rebates and performance-based price
concessions that may accrue directly or indirectly to
the PBM during the coverage year from a manufacturer,
dispensing pharmacy, or other party in connection with
the dispensing or administration of a prescription
drug, and
b. reasonable estimates of any price concessions, fees,
and other administrative costs that are passed
through, or are reasonably anticipated to be passed
through, to the PBM and serve to reduce the PBM's
liabilities for a prescription drug;
5. 15. "Retail pharmacy network" means retail pharmacy
providers contracted with a PBM in which the pharmacy primarily
fills and sells prescriptions via a retail, storefront location;
6. 16. "Rural service area" means a five-digit ZIP code in
which the population density is less than one thousand (1,000)
individuals per square mile;
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7. 17. "Suburban service area " means a five-digit ZIP code in
which the population density is between one thousand (1,000) and
three thousand (3,000) individuals per square mile; and
8. 18. "Urban service area" means a five-digit ZIP code in
which the population density is greater than three thousand (3,000)
individuals per square mile.
SECTION 2. AMENDATORY 36 O.S. 2021, Section 6962, is
amended to read as follows:
Section 6962. A. The Oklahoma Insurance Department shall
review and approve retail p harmacy network access for all pharmacy
benefits managers (PBMs) t o ensure compliance with Section 4 6961 of
this act title.
B. A PBM, or an agent of a PBM, shall not:
1. Cause or knowingly permit the use of advertisemen t,
promotion, solicitation, representation, p roposal or offer that is
untrue, deceptive or misleading;
2. Charge a pharmacist or pharma cy a fee related to the
adjudication of a claim, including without limitation a fee for:
a. the submission of a claim,
b. enrollment or participation in a retail pha rmacy
network, or
c. the development or management of claims proce ssing
services or claims payment services related to
participation in a retail pharmacy network;
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3. Reimburse a pharmacy or pharmacist in the st ate an amount
less than the amount that the P BM reimburses a pharmacy owned by or
under common ownership with a PBM for providing the sa me covered
services. The reimbursement amount paid to the pharmacy shall be
equal to the reimbursement amount calculate d on a per-unit basis
using the same generic product identifier or generic code number
paid to the PBM-owned or PBM-affiliated pharmacy;
4. Deny a pharmacy the opportunity to participate in any
pharmacy network at preferred participation status if the pha rmacy
is willing to accept the terms and cond itions that the PBM has
established for other pharmacies as a cond ition of preferred networ k
participation status;
5. Deny, limit or terminate a pharmacy's contract based on
employment status of any employee wh o has an active license to
dispense, despite probation status, with the State Board of
Pharmacy;
6. Retroactively deny or reduce reimbu rsement for a covered
service claim after returning a paid claim response as part of the
adjudication of the claim, unle ss:
a. the original claim was submitted fraud ulently, or
b. to correct errors identified in an audit, so long a s
the audit was conducted in compliance with Sections
356.2 and 356.3 of Title 59 of the Oklahoma Statutes;
or
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7. Fail to make any payment due t o a pharmacy or pharmacist for
covered services properly rendered in the event a PBM terminates a
pharmacy or pharmacist from a pharmacy benefits manager network.
C. The prohibitions under this section shall apply to contracts
between pharmacy benefits managers an d pharmacists or pharmacies for
participation in retail pharmacy networks.
1. A PBM contract shall:
a. not restrict, directly or indirectly, any pharmacy
that dispenses a prescription drug from informing, or
penalize such pharmacy for informing, an indivi dual of
any differential between the individual 's out-of-
pocket cost or coverage with respect to acqui sition of
the drug and the amount an individual would pay to
purchase the drug directly, and
b. ensure that any entity that provides pharmacy benefits
management services under a contract with any such
health plan or health insurance coverage does not,
with respect to such plan or coverage, restrict,
directly or indirectly, a pharmacy that dispenses a
prescription drug from informing, or penalize such
pharmacy for informing, a covered individual of any
differential between the individual 's out-of-pocket
cost under the plan or cover age with respect to
acquisition of the drug and the amount an individual
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would pay for acquisition of the drug without using
any health plan or health insurance coverage ,
c. not prohibit from or penalize for a pharmacy or
pharmacist disclosing to an individual information
regarding the existence and clinical efficacy of a
generic equivalent that would be less expensive to the
enrollee under his or her health plan prescript ion
drug benefit or outside his or her heal th plan
prescription drug benefit, without requesting any
health plan reimbursement, than the drug that was
originally prescribed, and
d. not prohibit from or penalize for a pharmacy or
pharmacist selling to an individual, instead of a
particular prescribed dru g, therapeutically equivalent
drug that would be less expensive to the enrollee
under his or her health plan prescription drug benefit
or outside his or her health plan prescription drug
benefit, without requesting any health plan
reimbursement, than the drug that was originally
prescribed.
2. A pharmacy benefits manager's contract with a participating
pharmacist or pharmacy shall not prohibit, restrict or limit
disclosure of informati on to the Insurance C ommissioner, law
enforcement or state and fed eral governmental officials
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investigating or examining a complaint or conducting a review of a
pharmacy benefits manager's compliance with the requirements under
the Patient's Right to Pharmacy Choice Act.
3. A pharmacy benefits manager shall establish an d maintain an
electronic claim inquiry processing system using the National
Council for Prescription Drug Programs' current standards to
communicate information to pharmacies submitting clai m inquiries.
D. For each of the PBM's contracts or other relation ships with
a health plan, a PBM shall publish on an easily accessible website
the health plan formulary and timely notification of formulary
changes and product exclusions.
SECTION 3. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Sect ion 6962.1 of Title 36, unless there
is created a duplication in numbering, reads as follows:
A. Beginning on November 1, 2022, and on an annual basis
thereafter, a pharmacy benefits manager (PBM) shall provide the
Insurance Department with a report containing the following
information from the prior calendar year as it pertains to pharmacy
benefits provided by health insurers to enrollees in the stat e:
1. The aggregate dollar amount of all rebates that the PBM
received from all pharmace utical manufacturers;
2. The aggregate dollar amount of all administrative fees that
the PBM received;
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3. The aggregate dollar amount of all issuer administrative
service fees that the PBM received;
4. The aggregate dollar amount of all rebates t hat the PBM
received from all pharmaceutical manufac turers and did not pass
through to health plans or health insurers;
5. The aggregate dollar amount of all administrative fees that
the PBM received from all pharmaceutical ma nufacturers and did not
pass through to health plans or health insurers;
6. The aggregate retained rebate percentage; and
7. Across all of the pharmacy benefits manager's contractual or
other relationships wit h all health plans or health insurers, the
highest aggregate retained rebate percentage, the lowest aggregate
retained rebate percentage, and the mean aggregate retained rebate
percentage.
B. The Department shall publish in a timely manner the
information that it receives under subsection A of this section on a
publicly available website ; provided, that such information shall be
made available in a form that does not disclose the identity of a
specific health plan or the identity of a specific manufacturer, the
prices charged for specific drugs or classes of drugs, or t he amount
of any rebates provided for specific drugs or classes of drugs.
C. The PBM and the Department shall not publish or otherwise
disclose any information that would disclose the identity of a
specific health plan, any prices charged for a specific d rug or
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class of drugs, the amount of any rebates provided for a specific
drug or class of drugs, the manufacturer, or information that would
otherwise have the potential to compromise the financ ial,
competitive, or proprietary nature of the information. The
information shall be protected from direct or indirect disclosure as
confidential and proprietary information and shall not be deemed a
public record as defined pursuant to Section 24A.3 of Title 51 of
the Oklahoma Statutes. A PBM shall impose the confident iality
protections of this section on any vendor or downst ream third party
that performs health care or administrative services on behalf of
the PBM that may receive or have access to rebate information.
SECTION 4. NEW LAW A new sec tion of law to be codified
in the Oklahoma Statutes as Sec tion 6962.2 of Title 36, unless there
is created a duplication in numbering, reads as follows:
A. An enrollee's defined cost sharing , as defined pursuant to
Section 1 of this act, for each prescription d rug shall be
calculated at the point of sale based on a price that is reduced by
an amount equal to one hundred percent (100%) of all rebates
received, or to be received, in connection with the dispensing or
administration of the prescription drug.
B. For any violation of this section, the Insurance
Commissioner may subject a pharmacy benefits manager (PBM) to an
administrative penalty not less than One Hundred Dollars ( $100.00),
nor more than Five Thousand Dollars ($5,000.00) for each occurrence.
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Such administrative penalt y may be enforced in the same manner in
which civil judgments may be enforced.
C. Nothing in this section shall preclude a PBM from decreasing
an enrollee's defined cost sharing by an amount greater than that
required under subsection A of this section.
D. In complying with the pr ovisions of this section, a PBM or
its agents shall not publish or otherwise disclose information
regarding the actual amount of rebates a PBM receives on a product
or therapeutic class of products , manufacturer, or p harmacy-specific
basis. Such information is protected as a trade secret, is not a
public record as defined pursuant to Section 24A.3 of Title 51 of
the Oklahoma Statutes, and shall not be disclosed directly or
indirectly, or in a manner that would allow for the identification
of an individual product, therapeutic class of products, or
manufacturer, or in a manner that would have the potential to
compromise the financial, competitive, or proprietary nature of the
information. A PBM shall impose the confidenti ality protections of
this section on any vendor or downstream third party that performs
health care or administrative services on behalf of the insurer that
may receive or have access to rebate information.
SECTION 5. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 6962.3 of Title 36, unless there
is created a duplication in numbering, reads as follows:
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A. An enrollee's defined cost sharing, as defined pursuant to
Section 1 of this act, for each prescription drug s hall be
calculated at the point of sale based on a price that is reduced by
an amount equal to one hundred percent (100%) of all rebates
received or to be received in connection with the dispensing or
administration of the prescription drug.
B. For any violation of this section, the Insurance
Commissioner may subject an insurer to an administrative penalty not
less than One Hundred Dollars ( $100.00), nor more than Five Thousand
Dollars ($5,000.00) for each occurrence. Such administrative
penalty may be enforced in the same manner in which civil judgments
may be enforced.
C. Nothing in this section shall preclude an insurer from
decreasing an enrollee 's defined cost sharing by an amount greater
than that required under subsection B of this section.
D. An insurer or its agents shall not publish or otherwise
disclose information regarding the actual amount of rebates an
insurer receives on a product or therapeutic class of produc ts,
manufacturer, or pharmacy-specific basis. Such information is
protected as a trade secret, is not a public record pursuant to
Section 24A.3 of Title 51 of the Oklahoma Statutes, and shall not be
disclosed directly or indirectly or in a manner that woul d allow for
the identification of an individual product, therapeutic class of
products, or manufacturer, or in a manner that would have the
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potential to compromise the financial, competitive, or proprietary
nature of the information. The confidentiality pr otections provided
in this section shall apply to any vendor or downstream third pa rty
that performs healthcare or administrative services on behalf of the
insurer that may receive or have access to rebate information.
SECTION 6. AMENDATORY 36 O.S. 2021, Section 6964, is
amended to read as follows:
Section 6964. A. A health insurer's pharmacy and therapeutics
committee (P&T committee) of a health insurer or its agent including
pharmacy benefits managers, shall establish a formulary, which shall
be a list of prescription drugs, both generic and brand name , used
by practitioners to identify drugs that offer the greatest overall
value. The P&T committee shall review the formulary annually.
B. A health insurer shall prohibit confl icts of interest for
members of the P&T committee. The P&T committee shall meet the
following requirements:
1. A person may not serve on a P&T committee if the person is
currently employed or was employed within the preceding year by a
pharmaceutical manufacturer, deve loper, labeler, wholesaler or
distributor.;
2. A majority of P&T committee members shall be practicing
physicians, practicing pharmacists, or both, and shall be licensed
in this state;
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2. 3. A health insurer shall require any member of the P&T
committee to disclose any compensation or funding from a
pharmaceutical manufacturer, developer, labeler, wholesaler or
distributor. Such P&T committee member shall be recused from voting
on any product manufactured or so ld by such pharmaceutical
manufacturer, developer, la beler, wholesaler or distributor.;
4. P&T committee members shall practice in various clinical
specialties that adequately represent the needs of the health plan
enrollees and there shall be an adequate numbe r of high-volume
specialists and specialist s treating rare or orphan diseases ;
5. The P&T committee shall meet at least on a quarterly basis;
6. P&T committee formulary development shall be conducted
pursuant to a transparent process, and formulary decisions and
rationale shall be documented in writing. Upon request, the records
and documents shall be made available to the health plan, subject to
the conditions in subsection C of this section;
7. If the P&T committee relies upon any third party to provide
cost-effectiveness analysis or research for a Medicaid Managed Care
organization's prescription drug policy , the P&T committee shall:
a. disclose to the health benefit plan, the President Pro
Tempore of the Senate, the Speaker of the House of
Representatives, and the Governor, the name of a
relevant third party, and
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b. provide a process through which patients and providers
potentially impacted by the third party's analysis or
research may provide input to the P&T committee;
8. P&T committee members who are s pecialists with current
clinical expertise and actively treat patients in a specifi c
therapeutic area, and the specific conditions within a therapeutic
area, shall participate in formulary decisions regarding each
therapeutic area and specific condit ion;
9. The P&T committee shall base its clinical dec isions on the
strength of scientifi c evidence, standards of practice, and
nationally accepted treatment guidelines;
10. The P&T committee shall consider whether a particular drug
has a clinically meaningful therapeutic advantage over other drugs
in terms of safety, effectiveness, or clinica l outcome for patient
populations who may be treated with the drug;
11. The P&T committee shall evaluate and analyze treatment
protocols and procedures related to the health p lan's formulary at
least annually;
12. The P&T committee shall review formulary management
activities including exceptions and appeals processes, prior
authorization, step therapy, quantity limits, generic substitutions,
therapeutic interchange, and other drug utilization management
activities for clinical appropriateness and consistency with
industry standards and patient and provider organization guidelines;
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13. The P&T committee shall annually review and provide a
written report to the pharmacy benefits manager on:
a. the percentage of prescription drugs on a formulary
subject to each of the types of utilization management
described in paragraph 10 of this subsection,
b. rates of adherence and nonadherence to medicines by
therapeutic area,
c. rates of abandonment of medicines by therapeutic area,
d. recommendations for improved adherence and reduced
abandonment, and
e. recommendations for improvement in formulary
management practices consistent with patient and
provider organization and other clinical g uidelines,
provided that the report shall be su bject to the
conditions in subsect ion C of this section; and
14. The P&T committee shall review and make a formulary
decision on a new U.S. Food and Drug Administration-approved drug
within ninety (90) days of the drug's approval, or shall provide a
clinical justification if this timeframe is not met.
C. The health insurer, its agents including pharmacy benefits
managers, and the Insurance Department shall not publish or
otherwise disclose any confident ial, proprietary information
including but not limited to any information that w ould disclose the
identity of a specific health plan , the price or prices charged for
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a specific drug or class of drugs, the amount of any rebates
provided for a specific drug or class of drugs, the manufacturer, or
that would otherwise have the potential to compromise the financial,
competitive, or proprietary nature of the information. The
information shall be protected from direct or indirect disclosure as
confidential and proprietary information and shall not be deemed a
public record as defined pursuant to Section 24A .3 of Title 51 of
the Oklahoma Statutes. The confidentiality protections provided in
this section shall apply to any vendor or third party that performs
health care or administrative services on behalf of the pharmacy
benefits manager that may receive or have access to rebate
information.
SECTION 7. AMENDATORY 51 O.S. 2021, Section 24A.3, is
amended to read as follows:
Section 24A.3. As used in the Oklahoma Open Records Act:
1. "Record" means all documents, including, but not limited to,
any book, paper, photogra ph, microfilm, data files created by or
used with computer software, computer tape, disk, record, sound
recording, film recording, video record or other material regardless
of physical form or characteristic, created by, received by , under
the authority of, or coming into the custody, control or possession
of public officials, public bodies, or their r epresentatives in
connection with the transaction of public business, the expenditure
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of public funds or the administering of public p roperty. "Record"
Record does not mean:
a. computer software,
b. nongovernment personal effects,
c. unless public disclosure is required by other laws or
regulations, vehicle movement records of the Okl ahoma
Transportation Authority obtained in connection with
the Authority's electronic toll collection system,
d. personal financial information, credit reports or
other financial data obtained by or submitted to a
public body for the purpose of evaluating credit
worthiness, obtaining a license, permit, or for the
purpose of becoming quali fied to contract with a
public body,
e. any digital audio/video recordings of the toll
collection and safeguarding activities of the Oklahoma
Transportation Authority,
f. any personal information provided by a guest at any
facility owned or operated by the Oklahoma Tourism and
Recreation Department or the Board of Trustees of for
the Quartz Mountain Arts a nd Conference Center and
Nature Park to obtain any service at the facility or
by a purchaser of a product sold by or through the
Oklahoma Tourism and Recr eation Department or the
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Quartz Mountain Arts and Conference Center and Nature
Park,
g. a Department of Defense Form 214 (DD Form 214) filed
with a county clerk, including any DD Form 214 filed
before July 1, 2002, or
h. except as provided for in Section 2 -110 of Title 47 of
the Oklahoma Statutes,
(1) any record in connection with a Motor Vehicle
Report issued by the Department of Public Safety,
as prescribed in Section 6 -117 of Title 47 of the
Oklahoma Statutes, or
(2) personal information within driver re cords, as
defined by the Driver's Privacy Protection Act,
18 United States Code, Sections 2721 through
2725, which are stored and maintained by the
Department of Public Safety , or
i. for the purposes of the Patient's Right to Pharmacy
Choice Act, any information or record that would have
the potential to compromise the financial,
competitive, or proprietary nature of information
about a specific drug or class of drugs, or a specific
product or therapeutic class of products. Additional
information that shall not be disclosed includes but
is not limited to:
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(1) any information relating to specific drugs or
classes of drugs that would disclose the identity
of a specific health plan, drug prices, the
rebate amount received by a pharmacy benefits
manager, the rebate amount received by the
insurer, or the identity of the manufacturer, and
(2) any information relating to a product or
therapeutic class of products that would disclose
the rebate received by a pharmacy benefits
manager, the rebate amount received by an
insurer, or the identity of the manufacturer;
2. "Public body" shall include, but not be limited to, any
office, department, board, bureau, commission, agency, trusteeship,
authority, council, committee, tr ust or any entity created by a
trust, county, city, village, town, township, district, school
district, fair board, court, executive office, advisory group, task
force, study group, or any subdivision thereof, supported in whole
or in part by public funds or entrusted with the expenditure of
public funds or administering or operating public property, and all
committees, or subcommittees thereof. Except for the records
required by Section 24A.4 of this title, "public body" public body
does not mean judges, justices, th e Council on Judicial Complaints,
the Legislature, or legislators;
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3. "Public office" means the physical location where public
bodies conduct business or keep records;
4. "Public official" means any official or employee of any
public body as defined here in; and
5. "Law enforcement agency" means any public body charged with
enforcing state or local criminal laws and initiating cr iminal
prosecutions, including, but not limited to, police departments,
county sheriffs, the Department of Public Safety, the Ok lahoma State
Bureau of Narcotics and Dangerous Dru gs Control, the Alcoholic
Beverage Laws Enforcement Commission, and the Oklaho ma State Bureau
of Investigation.
SECTION 8. AMENDATORY 59 O.S. 2021, Section 357, is
amended to read as follows:
Section 357. As used in this act:
1. "Covered entity" means a nonprofit hospital or medical
service organization, in surer, health coverage plan or health
maintenance organization; a health program administered by the st ate
in the capacity of provider of health coverage; or an empl oyer,
labor union, or other entity organized in the state that provides
health coverage to covered individuals who are employed or reside in
the state. This term does not include a health plan that provides
coverage only for accidental injury, specified d isease, hospital
indemnity, disability income, or other limited benefit health
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insurance policies and contracts th at do not include prescription
drug coverage;
2. "Covered individual" means a member, participant, enrollee,
contract holder or policy holder or beneficiary of a covered entity
who is provided health coverage by the covered entity. A covered
individual includes any dependent or other person provided health
coverage through a policy, contract or plan for a covered
individual;
3. "Department" means the Oklahoma Insurance Department;
4. "Maximum allowable cost" or "MAC" means the list of drug
products delineating the maximum per-unit reimbursement for
multiple-source prescription drug s, medical product or device;
5. "Multisource drug product re imbursement" (reimbursement)
means the total amount paid to a pharmacy inclusive of any red uction
in payment to the pharmacy, excluding prescription dispense fees;
6. "Pharmacy benefits managem ent" means a service provided to
covered entities to facilitat e the provision of prescription drug
benefits to covered individuals within the state, including
negotiating pricing and other terms with drug manufacturers and
providers. Pharmacy benefits man agement may include any or all of
the following services:
a. claims processing, performance of drug utilization
review, processing of prior authorization requests,
retail network management and payment of claims to
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pharmacies for prescription drugs dispens ed to covered
individuals,
b. clinical formulary development a nd management
services,
c. rebate contracting and administration,
d. certain patient compli ance, therapeutic inter vention
and generic substitution programs, or
e. disease management programs,
f. adjudication of appeals and gri evances related to the
prescription drug benefit, and
g. oversight of prescription drug costs;
7. "Pharmacy benefits man ager" or "PBM" means a person,
business or other entity that, either directly or through an
intermediary, performs pharmacy benefit s management. The term
includes a person or entity acting for a PBM in a contractual or
employment relationship in the perfo rmance of pharmacy benefits
management for a managed care company, nonprofit hospital, medical
service organization, insurance comp any, third-party payor, or a
health program administered by an agency of this state;
8. "Plan sponsor" means the employers, insurance companies,
unions and health maintenance organizations or any other entity
responsible for establishing, maintaining, or administering a health
benefit plan on behalf of covered individuals; and
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9. "Provider" means a pharmacy licensed by the Sta te Board of
Pharmacy, or an agent or representative of a pharmacy, including,
but not limited to, t he pharmacy's contracting agent, which
dispenses prescription drugs or devices to covered individuals.
SECTION 9. AMENDATORY 59 O.S. 2021, Section 358, is
amended to read as follows:
Section 358. A. In order to provide pharmacy benefits
management or any of the service s included under the definition of
pharmacy benefits management in this state, a pharmacy benefits
manager or any entity acting as one in a contractual or employment
relationship for a covered entity shall first obtain a license from
the Oklahoma Insurance Department, and the Department may charge a
fee for such licensure.
B. The Department shall establish, by regulation, licensure
procedures, required disclosures for pharmacy be nefits managers
(PBMs) and other rules as may be necessary for carrying out an d
enforcing the provisions of this act section. The licensure
procedures shall, at a minimum, include the completion of an
application form that shall include the name and address of an agent
for service of process, the payment of a requisite fee, and evidence
of the procurement of a surety bond:
1. The name, address, and telephone contact number of the PBM;
2. The name and address of the PBM's agent for service of
process in the state;
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3. The name and address of each person with management or
control over the PBM;
4. Evidence of the procurement of a su rety bond;
5. The name and address of each person with a benefici al
ownership interest in the PBM;
6. In the case of a PBM applicant that is a partnership or
other unincorporated association, limited liability company, or
corporation, and has five or more partners, members, or
stockholders, the applicant shall:
a. specify its legal structure and the total number of
its partners, members, or stockholders,
b. specify the name, address, usual occupation, and
professional qualifications of the five partners,
members, or stockholders with the five largest
ownership interests in the PBM, and
c. upon request by the Department, furnish the Department
with information regardi ng the name, address, usual
occupation, and professional qualification s of any
other partners, members, or stockholders; and
7. A signed statement indicating that the PBM has not been
convicted of a felony and ha s not violated any of the requirements
of the Oklahoma Pharmacy Act and the Patient 's Right to Pharmacy
Choice Act, or, if the applicant cannot provide such a statement, a
signed statement describing any relevant conviction or violation.
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C. The Department may subpoena witnesses and information. Its
compliance officers may take and copy records for investigative use
and prosecutions. Nothing in this subsection shall limit the Office
of the Attorney General from using its investigative demand
authority to investigate and prosecute violations of the law.
D. The Department may suspend, revoke, or refuse to issue or
renew a license for nonc ompliance with any of the provisions hereby
established or with the rules promulgated by the Department; for
conduct likely to mislead, deceive or defraud the public or the
Department; for unfair or deceptive business practices or for
nonpayment of a renew al fee or fine. The Department may also levy
administrative fines for each count of which a PBM has been
convicted in a Department hearing.
SECTION 10. This act shall become effective November 1, 2022.
COMMITTEE REPORT BY: COMMITTEE ON RETIREMENT AND INSURANCE
February 21, 2022 - DO PASS AS AMENDED