Oklahoma 2022 Regular Session

Oklahoma Senate Bill SB1633 Compare Versions

Version 1 (Old)

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3		-	SB1633 HFLR Page 1
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	3	+	ENGR. S. B. NO. 1633 Page 1 1
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29		-	HOUSE OF REPRESENTATIVES - FLOOR VERSION
30		-
31		-	STATE OF OKLAHOMA
32		-
33		-	2nd Session of the 58th Legislature (2022)
34		-
35	28		ENGROSSED SENATE
36	29		BILL NO. 1633 By: Jett and Stephens of the
37	30		Senate
38	31
39	32		and
40	33
41	34		McEntire of the House
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47	38		An Act relating to pharmacy benefits mana gers;
48	39		amending 36 O.S. 2021, Sections 6960 and 6962, which
49	40		relate to definitions and compli ance review;
50	41		providing definitions; updating statutory reference;
51	42		prohibiting pharmacy benefits managers from imposing
52	43		certain charges on pharmacist and pharmacy;
53	44		prohibiting pharmacy benefits managers from imposing
54	45		clawbacks; prohibiting pharmacy benefits managers
55	46		from engaging in spread pricing; providing that
56	47		pharmacy benefits manag er contracts protect
57	48		healthcare access; requiring pharmacy benefits
58	49		managers to provide certain reports; requiring
59	50		certain reports be published by Insurance Departmen t;
60	51		establishing certain fiduciary duties for pharmacy
61	52		benefits managers to their clients; requiring
62	53		notification of certain conflicts by pharmacy
63	54		benefits manager to health carrier client; providing
64	55		for codification; and providing an effective date.
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69	60		BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
70	61		SECTION 1. AMENDATORY 36 O.S. 2021, Section 6960, is
71	62		amended to read as fo llows:
	63	+	Section 6960. For purposes of the Patient 's Right to Pharmacy
	64	+	Choice Act:
	65	+	1. "Aggregate retained rebate percen tage" means the percentage
	66	+	of all rebates received by a pharmacy benefits manager (PBM) from
	67	+	all pharmaceutical manufacturers which is not passed on to the PBM 's
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73		-	SB1633 HFLR Page 2
74		-	BOLD FACE denotes Committee Amendments. 1
	69	+	ENGR. S. B. NO. 1633 Page 2 1
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99		-	Section 6960. For purposes of the Patient 's Right to Pharmacy
100		-	Choice Act:
101		-	1. "Aggregate retained rebate percen tage" means the percentage
102		-	of all rebates received by a pharmacy benefits manager (PBM) from
103		-	all pharmaceutical manufacturers which is not passed on to the PBM 's
104	94		health plan or health insur er clients. Aggregate retained rebate
105	95		percentage shall be expressed without disclosing any identifying
106	96		information regarding any health plan , prescription drug, or
107	97		therapeutic class, and shall be calculated by dividing:
108	98		a. the aggregate dollar amount of a ll rebates that the
109	99		PBM received during the prior calendar year from all
110	100		pharmaceutical manufacturers and that did not pass
111	101		through to the pharmacy benefits manager 's health plan
112	102		or health insurer clients , by
113	103		b. the aggregate dollar amount of all rebates t hat the
114	104		pharmacy benefits manager received during the prior
115	105		calendar year from all pharmaceutical manufacturers;
116	106		2. "Carrier" means a carrier as defined pursuant to Section
117	107		6902 of this title;
118	108		3. "Clawback" means the act of recove ring from the dispensing
119	109		pharmacy and keeping as revenue the difference between a patient's
120	110		co-payment and the pharmacy drug cost when the co-payment exceeds
121	111		the pharmacy drug cost ;
	112	+	1. 4. "Health insurer" means any corporation, association,
	113	+	benefit society, exchange, partnership or individual licensed by the
	114	+	Oklahoma Insurance Code;
	115	+	2. 5. "Mail-order pharmacy" means a pharmacy licensed by this
	116	+	state that primarily dispenses and delivers covered drug s via common
	117	+	carrier;
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123		-	SB1633 HFLR Page 3
124		-	BOLD FACE denotes Committee Amendments. 1
	119	+	ENGR. S. B. NO. 1633 Page 3 1
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149		-	1. 4. "Health insurer" means any corporation, association,
150		-	benefit society, exchange, partnership or individual licensed by the
151		-	Oklahoma Insurance Code;
152		-	2. 5. "Mail-order pharmacy" means a pharmacy licensed by this
153		-	state that primarily dispenses and delivers covered drug s via common
154		-	carrier;
155	144		3. 6. "Pharmacy benefits manager " or "PBM" means a person that
156	145		performs pharmacy benefits management and any other person acting
157	146		for such person under a contractual or employment relationship in
158	147		the performance of pharmacy benefits ma nagement for a managed -care
159	148		company, nonprofit hospital, medical service organiz ation, insurance
160	149		company, third-party payor or a health program administered by a
161	150		department of this state;
162	151		4. 7. "Pharmacy and therapeutics committee " or "P&T committee"
163	152		means a committee at a hospital or a health insurance plan t hat
164	153		decides which drugs will appear on that entity's drug formulary;
165	154		8. "Rebate administrative fees" means fees or payments from
166	155		pharmaceutical manufacturers to, or otherwise retained by, a
167	156		pharmacy benefits manager or its designee pursuant to a con tract
168	157		between a PBM or affilia te, and the manufactur er in connection with
169	158		the PBM's administering, invoicing, allocating, and collecting the
170	159		rebates;
171	160		9. "Rebate" means negotiated price concessions including but
172	161		not limited to base price concessions, wheth er described as a rebate
	162	+	or otherwise, and reasonabl e estimates of any price protection
	163	+	rebates and performance-based price concessions that may accrue,
	164	+	directly or indirectly, to the PBM during th e coverage year from a
	165	+	manufacturer;
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174		-	SB1633 HFLR Page 4
175		-	BOLD FACE denotes Committee Amendments. 1
	167	+	ENGR. S. B. NO. 1633 Page 4 1
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200		-	or otherwise, and reasonabl e estimates of any price protection
201		-	rebates and performance-based price concessions that may accrue,
202		-	directly or indirectly, to the PBM during th e coverage year from a
203		-	manufacturer;
204	192		5. 10. "Retail pharmacy network" means retail pharmacy
205	193		providers contracted with a PBM in which the pharmacy primari ly
206	194		fills and sells prescriptions via a retail, storefront location;
207	195		6. 11. "Rural service area" means a five-digit ZIP code in
208	196		which the population density is l ess than one thousand (1,000)
209	197		individuals per square mile;
210	198		12. "Spread pricing" means the act by a PBM of keeping as
211	199		revenue the difference between the amount paid to the PBM by a
212	200		health plan for prescription drugs and the amount the P BM reimburses
213	201		the pharmacy dispensing the drug;
214	202		7. 13. "Suburban service area" means a five-digit ZIP code in
215	203		which the population density is between one thousand (1,000) and
216	204		three thousand (3,000) i ndividuals per square mile; and
217	205		8. 14. "Urban service area" means a five-digit ZIP code in
218	206		which the population density is greater than three thousand (3,000)
219	207		individuals per square mile.
220	208		SECTION 2. AMENDATORY 36 O.S. 2021, Section 6962, is
221	209		amended to read as follows:
222	210		Section 6962. A. The Oklahoma Insurance Department shall
223	211		review and approve retail pharmacy network access for all pharmacy
	212	+	benefits managers (PBMs) to ensure compliance with Section 4 6961 of
	213	+	this act title.
	214	+	B. A PBM, or an agent of a PBM, shall n ot:
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225		-	SB1633 HFLR Page 5
226		-	BOLD FACE denotes Committee Amendments. 1
	216	+	ENGR. S. B. NO. 1633 Page 5 1
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251		-	benefits managers (PBMs) to ensure compliance with Section 4 6961 of
252		-	this act title.
253		-	B. A PBM, or an agent of a PBM, shall n ot:
254	241		1. Cause or knowingly p ermit the use of advertisement,
255	242		promotion, solicitation, representation, proposal or offer that is
256	243		untrue, deceptive or misleading;
257	244		2. Charge a pharmacist or pharmacy a fee related to the
258	245		adjudication or submission of a claim, including without limitation
259	246		a fee for:
260	247		a. the submission of a claim,
261	248		b. enrollment or particip ation in a retail pharmacy
262	249		network, or
263	250		c. the development or management of claims processing
264	251		services or claims payment services related to
265	252		participation in a retail pharmacy network;
266	253		3. Charge a pharmacist or pharmacy a fee related to the
267	254		credentialing of a pharmacy or pharmacist;
268	255		4. Charge a pharmacist or pharmacy a fee related to the
269	256		application, enrollment , or participation in a retail pharmacy
270	257		network;
271	258		5. Charge a pharmacist or pharmacy a fee relat ed to the
272	259		development or manage ment of claims processing services or claims
273	260		payment services rela ted to participation in a retail pharmacy
274	261		network;
	262	+	6. Reimburse a pharmacy or pharmacist in the sta te an amount
	263	+	less than the amount that the PBM reim burses a pharmacy owned by or
	264	+	under common ownership with a PBM for providing the same covered
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276		-	SB1633 HFLR Page 6
277		-	BOLD FACE denotes Committee Amendments. 1
	266	+	ENGR. S. B. NO. 1633 Page 6 1
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302		-	6. Reimburse a pharmacy or pharmacist in the sta te an amount
303		-	less than the amount that the PBM reim burses a pharmacy owned by or
304		-	under common ownership with a PBM for providing the same covered
305	291		services. The reimbursement amount paid to the phar macy shall be
306	292		equal to the reimbursement amount calculated on a per-unit basis
307	293		using the same generic product identifier or generic code number
308	294		paid to the PBM-owned or PBM-affiliated pharmacy;
309	295		4. 7. Deny a pharmacy the opportunity to participate in any
310	296		pharmacy network at preferred pa rticipation status if the phar macy
311	297		is willing to accept the terms and conditions that the PBM has
312	298		established for other pharmacies as a condition of preferred network
313	299		participation status;
314	300		5. 8. Deny, limit or terminate a pharmacy 's contract based on
315	301		employment status of any employee who has an active license to
316	302		dispense, despite probati on status, with the State Bo ard of
317	303		Pharmacy;
318	304		6. 9. Retroactively deny or reduce reimbursement for a covered
319	305		service claim after returning a paid clai m response as part of the
320	306		adjudication of the claim, unles s:
321	307		a. the original claim was submitted fraudulentl y, or
322	308		b. to correct errors id entified in an audit, so long as
323	309		the audit was conducted in complian ce with Sections
324	310		356.2 and 356.3 of Title 59 of the Oklahoma Statutes;
325	311		or
	312	+	7. 10. Fail to make any payment due to a pharmacy or pharmaci st
	313	+	for covered services properly rendered in the event a PBM terminates
	314	+	a pharmacy or pharmacist from a pharmacy benefit s manager network;
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327		-	SB1633 HFLR Page 7
328		-	BOLD FACE denotes Committee Amendments. 1
	316	+	ENGR. S. B. NO. 1633 Page 7 1
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353		-	7. 10. Fail to make any payment due to a pharmacy or pharmaci st
354		-	for covered services properly rendered in the event a PBM terminates
355		-	a pharmacy or pharmacist from a pharmacy benefit s manager network;
356	341		11. Directly or indirectly p articipate in a clawback as defined
357	342		in paragraph 3 of Section 6960 of this title; or
358	343		12. Directly or indirectly engage in spread pricing as defined
359	344		in paragraph 12 of Section 6960 of this title.
360	345		C. The prohibitions under this section shall apply to contracts
361	346		between pharmacy bene fits managers and pharmacists or pharmacies for
362	347		participation in retail pharmacy netw orks.
363	348		1. A PBM contract shall:
364	349		a. not restrict, directly or indirectly, any pharmacy
365	350		that dispenses a prescription drug from informing, or
366	351		penalize such pharmacy for info rming, an individual of
367	352		any differential between the individual 's out-of-
368	353		pocket cost or coverage with respect to acq uisition of
369	354		the drug and the amount an individual would pay t o
370	355		purchase the drug directly, and
371	356		b. ensure that any entity that provides pharm acy benefits
372	357		management services under a contract with any such
373	358		health plan or health insurance coverage does not,
374	359		with respect to such plan or coverage, restrict,
375	360		directly or indirectly, a pharmacy that dispenses a
376	361		prescription drug from informing, or pen alize such
	362	+	pharmacy for informing, a covered individual of any
	363	+	differential between t he individual's out-of-pocket
	364	+	cost under the plan or coverage with respect to
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378		-	SB1633 HFLR Page 8
379		-	BOLD FACE denotes Committee Amendments. 1
	366	+	ENGR. S. B. NO. 1633 Page 8 1
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404		-	pharmacy for informing, a covered individual of any
405		-	differential between t he individual's out-of-pocket
406		-	cost under the plan or coverage with respect to
407	391		acquisition of the drug and the amount an individual
408	392		would pay for acquisition of the drug wi thout using
409	393		any health plan or health insurance coverage , and
410	394		c. ensure that access to lo cal healthcare is not
411	395		jeopardized by immediately modifying any rates or
412	396		provisions that would result in a reimbursement below
413	397		the pharmacy's cost to acquire and dispense the
414	398		medication or product.
415	399		2. A pharmacy benefits manager 's contract with a participa ting
416	400		pharmacist or pharmacy shall not prohibit, restrict or limit
417	401		disclosure of information to the Insurance Commissioner, law
418	402		enforcement or state and federal governmental officials
419	403		investigating or examining a complaint or conducting a review of a
420	404		pharmacy benefits manager's compliance with the requirements under
421	405		the Patient's Right to Pharmacy Choice Act.
422	406		3. A pharmacy benefits manager sh all establish and maintain an
423	407		electronic claim inquiry processing system using the National
424	408		Council for Prescription Drug Programs' current standards to
425	409		communicate information to pharmacies submitting claim inquiries.
	410	+	SECTION 3. NEW LAW A new section of law to be codified
	411	+	in the Oklahoma Statutes as Section 6962.1 of Title 36, unless there
	412	+	is created a duplication in numbering, reads as follows:
	413	+	A. Beginning on November 1, 2022, and on an annual basis
	414	+	thereafter, a pharmacy benefit s manager (PBM) shall provide the
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427		-	SB1633 HFLR Page 9
428		-	BOLD FACE denotes Committee Amendments. 1
	416	+	ENGR. S. B. NO. 1633 Page 9 1
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453		-	SECTION 3. NEW LAW A new section of law to be codified
454		-	in the Oklahoma Statutes as Section 6962.1 of Title 36, unless there
455		-	is created a duplication in numbering, reads as follows:
456		-	A. Beginning on November 1, 2022, and on an annual basis
457		-	thereafter, a pharmacy benefit s manager (PBM) shall provide the
458	441		Insurance Department with a report containing the following
459	442		information from the pr ior calendar year as it per tains to pharmacy
460	443		benefits provided by health insurers to enrollees in the state:
461	444		1. The aggregate dollar am ount of all rebates that the PBM
462	445		received from all pharmaceutic al manufacturers;
463	446		2. The aggregate dollar amount of all rebate administrative
464	447		fees that the PBM received;
465	448		3. The aggregate dollar amount of all issuer administrative
466	449		service fees that the PBM received ;
467	450		4. The aggregate dollar amount of all rebates that the PBM
468	451		received from all pharmaceutical manufacturers an d did not pass
469	452		through to health plans or health insurers;
470	453		5. The aggregate dollar amount of all rebate administrative
471	454		fees that the PBM received from a ll pharmaceutical manufacturers and
472	455		did not pass through to heal th plans or health insurers;
473	456		6. The aggregate retained rebate per centage; and
474	457		7. Across all of the pharmacy benefits manager's contractual or
475	458		other relationships with all health plans or hea lth insurers, the
476	459		highest aggregate retained rebate percentage, the lowest aggregate
	460	+	retained rebate percentage, and the mean aggr egate retained rebate
	461	+	percentage.
	462	+	B. The Department shall publish in a timely manner the
	463	+	information that it receives under s ubsection A of this section on a
	464	+	publicly available website, provid ed that such information shall be
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478		-	SB1633 HFLR Page 10
479		-	BOLD FACE denotes Committee Amendments. 1
	466	+	ENGR. S. B. NO. 1633 Page 10 1
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504		-	retained rebate percentage, and the mean aggr egate retained rebate
505		-	percentage.
506		-	B. The Department shall publish in a timely manner the
507		-	information that it receives under s ubsection A of this section on a
508		-	publicly available website, provid ed that such information shall be
509	491		made available in a form that does not disclose the identity of a
510	492		specific health plan or the identity of a specific manufacturer, the
511	493		prices charged for s pecific drugs or classes of drugs, or the amount
512	494		of any rebates provided for specific drugs or classes of drugs.
513	495		SECTION 4. NEW LAW A new section of law to be codified
514	496		in the Oklahoma Statutes as Section 6962.2 of Title 36, unless there
515	497		is created a duplication in numb ering, reads as follows:
516	498		A. A pharmacy benefits manager (PBM) shall have a fiduciary
517	499		duty to any health carrier and health insurer clients and shall
518	500		discharge that duty in accordance with the provisions of state and
519	501		federal law.
520	502		B. A PBM shall perform its duties with care, skill, prudence,
521	503		diligence, and professionalism.
522	504		C. A PBM shall notify a health carrier client in writing of any
523	505		activity, policy, or practice of the pharmacy benefits manager that
524	506		directly or indirectly presents any conflict of interest with the
525	507		duties imposed in this section.
	508	+	SECTION 5. This act shall become effective November 1, 2022.
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527		-	SB1633 HFLR Page 11
528		-	BOLD FACE denotes Committee Amendments. 1
	510	+	ENGR. S. B. NO. 1633 Page 11 1
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553		-	~~SECTION 5.~~ ~~This act shall become effective November 1~~, 2022.
	535	+	Passed the Senate the 22nd day of March, 2022.
554	536
555		-	COMMITTEE REPORT BY: COMMITTEE ON PUBLIC HEALTH, dated 04/13/2022 -
556		-	DO PASS.
	537	+
	538	+
	539	+	Presiding Officer of the Senate
	540	+
	541	+
	542	+	Passed the House of Representatives the ____ day of __________,
	543	+	2022.
	544	+
	545	+
	546	+
	547	+	Presiding Officer of the House
	548	+	of Representatives
	549	+