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HOUSE OF REPRESENTATIVES - FLOOR VERSION
STATE OF OKLAHOMA
2nd Session of the 58th Legislature (2022)
ENGROSSED SENATE
BILL NO. 1633 By: Jett and Stephens of the
Senate
and
McEntire of the House
An Act relating to pharmacy benefits mana gers;
amending 36 O.S. 2021, Sections 6960 and 6962, which
relate to definitions and compli ance review;
providing definitions; updating statutory reference;
prohibiting pharmacy benefits managers from imposing
certain charges on pharmacist and pharmacy;
prohibiting pharmacy benefits managers from imposing
clawbacks; prohibiting pharmacy benefits managers
from engaging in spread pricing; providing that
pharmacy benefits manag er contracts protect
healthcare access; requiring pharmacy benefits
managers to provide c ertain reports; requiring
certain reports be published by Insurance Departmen t;
establishing certain fiduciary duties for pharmacy
benefits managers to their clients; requiring
notification of certain conflicts by pharmacy
benefits manager to health carrie r client; 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 fo llows:
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Section 6960. For purposes of the Patient 's Right to Pharmacy
Choice Act:
1. "Aggregate retained rebate percen tage" means the percentage
of all rebates received by a pharmacy benefits manager (PBM) from
all pharmaceutical manufacturers which is not passed on to the PBM 's
health plan or health insur er clients. 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 a ll rebates that the
PBM received during the prior calendar year from all
pharmaceutical manufacturers and 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 t hat the
pharmacy benefits manager received during the prior
calendar year from all pharmaceutical manufacturers;
2. "Carrier" means a carrier as defined pursuant to Section
6902 of this title;
3. "Clawback" means the act of recove ring from the dispensing
pharmacy and keeping as revenue the difference between a patient's
co-payment and the pharmacy drug cost when the co-payment exceeds
the pharmacy drug cost ;
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1. 4. "Health insurer" means any corporation, association,
benefit society, exchange, partnership or individual licensed by the
Oklahoma Insurance Code;
2. 5. "Mail-order pharmacy" means a pharmacy licensed by this
state that primarily dispenses and delivers covered drug s via common
carrier;
3. 6. "Pharmacy benefits manager " or "PBM" means a person that
performs pharmacy benefits management and any other person acting
for such person under a contractual or employment relationship in
the performance of pharmacy benefits ma nagement for a managed -care
company, nonprofit hospital, medical service organiz ation, insurance
company, third-party payor or a health program administered by a
department of this state;
4. 7. "Pharmacy and therapeutics committee " or "P&T committee"
means a committee at a hospital or a health insurance plan t hat
decides which drugs will appear on that entity's drug formulary;
8. "Rebate administrative fees" means fees or payments from
pharmaceutical manufacturers to, or otherwise retained by, a
pharmacy benefits manager or its designee pursuant to a con tract
between a PBM or affilia te, and the manufactur er in connection with
the PBM's administering, invoicing, allocating, and collecting the
rebates;
9. "Rebate" means negotiated price concessions including but
not limited to base price concessions, wheth er described as a rebate
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or otherwise, and reasonabl e estimates of any price protection
rebates and performance-based price concessions that may accrue,
directly or indirectly, to the PBM during th e coverage year from a
manufacturer;
5. 10. "Retail pharmacy network" means retail pharmacy
providers contracted with a PBM in which the pharmacy primari ly
fills and sells prescriptions via a retail, storefront location;
6. 11. "Rural service area" means a five-digit ZIP code in
which the population density is l ess than one thousand (1,000)
individuals per square mile;
12. "Spread pricing" means the act by a PBM of keeping as
revenue the difference between the amount paid to the PBM by a
health plan for prescription drugs and the amount the P BM reimburses
the pharmacy dispensing the drug;
7. 13. "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) i ndividuals per square mile; and
8. 14. "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 pharmacy network access for all pharmacy
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benefits managers (PBMs) to ensure compliance with Section 4 6961 of
this act title.
B. A PBM, or an agent of a PBM, shall n ot:
1. Cause or knowingly p ermit the use of advertisement,
promotion, solicitation, representation, proposal or offer that is
untrue, deceptive or misleading;
2. Charge a pharmacist or pharmacy a fee related to the
adjudication or submission of a claim, including without limitation
a fee for:
a. the submission of a claim,
b. enrollment or particip ation in a retail pharmacy
network, or
c. the development or management of claims processing
services or claims payment services related to
participation in a retail pharmacy network;
3. Charge a pharmacist or pharmacy a fee related to the
credentialing of a pharmacy or pharmacist;
4. Charge a pharmacist or pharmacy a fee related to the
application, enrollment , or participation in a retail pharmacy
network;
5. Charge a pharmacist or pharmacy a fee relat ed to the
development or manage ment of claims processing services or claims
payment services rela ted to participation in a retail pharmacy
network;
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6. Reimburse a pharmacy or pharmacist in the sta te an amount
less than the amount that the PBM reim burses a pharmacy owned by or
under common ownership with a PBM for providing the same covered
services. The reimbursement amount paid to the phar macy shall be
equal to the reimbursement amount calculated 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. 7. Deny a pharmacy the opportunity to participate in any
pharmacy network at preferred pa rticipation status if the phar macy
is willing to accept the terms and conditions that the PBM has
established for other pharmacies as a condition of preferred network
participation status;
5. 8. Deny, limit or terminate a pharmacy 's contract based on
employment status of any employee who has an active license to
dispense, despite probati on status, with the State Board of
Pharmacy;
6. 9. Retroactively deny or reduce reimbursement for a covered
service claim after returning a paid clai m response as part of the
adjudication of the claim, unles s:
a. the original claim was submitted fraudulentl y, or
b. to correct errors id entified in an audit, so long as
the audit was conducted in complian ce with Sections
356.2 and 356.3 of Title 59 of the Oklahoma Statutes;
or
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7. 10. Fail to make any payment due to a pharmacy or pharmaci st
for covered services properly rendered in the event a PBM terminates
a pharmacy or pharmacist from a pharmacy benefit s manager network;
11. Directly or indirectly p articipate in a clawback as defined
in paragraph 3 of Section 6960 of this title; or
12. Directly or indirectly engage in spread pricing as defined
in paragraph 12 of Section 6960 of this title.
C. The prohibitions under this section shall apply to contracts
between pharmacy bene fits managers and pharmacists or pharmacies for
participation in retail pharmacy netw orks.
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 info rming, an individual of
any differential between the individual 's out-of-
pocket cost or coverage with respect to acq uisition of
the drug and the amount an individual would pay t o
purchase the drug directly, and
b. ensure that any entity that provides pharm acy 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 pen alize such
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pharmacy for informing, a covered individual of any
differential between t he individual's out-of-pocket
cost under the plan or coverage with respect to
acquisition of the drug and the amount an individual
would pay for acquisition of the drug wi thout using
any health plan or health insurance coverage , and
c. ensure that access to lo cal healthcare is not
jeopardized by immediately modifying any rates or
provisions that would result in a reimbursement below
the pharmacy's cost to acquire and dispense the
medication or product.
2. A pharmacy benefits manager 's contract with a participa ting
pharmacist or pharmacy shall not prohibit, restrict or limit
disclosure of information to the Insurance Commissioner, law
enforcement or state and federal governmental officials
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 sh all establish and maintain an
electronic claim inquiry processing system using the National
Council for Prescription Drug Programs' current standards to
communicate information to pharmacies submitting claim inquiries.
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SECTION 3. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 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 benefit s manager (PBM) shall provide the
Insurance Department with a report containing the following
information from the pr ior calendar year as it per tains to pharmacy
benefits provided by health insurers to enrollees in the state:
1. The aggregate dollar am ount of all rebates that the PBM
received from all pharmaceutic al manufacturers;
2. The aggregate dollar amount of all rebate administrative
fees that the PBM received;
3. The aggregate dollar amount of all issuer administrative
service fees that the PBM received ;
4. The aggregate dollar amount of all rebates that the PBM
received from all pharmaceutical manufacturers an d did not pass
through to health plans or health insurers;
5. The aggregate dollar amount of all rebate administrative
fees that the PBM received from a ll pharmaceutical manufacturers and
did not pass through to heal th plans or health insurers;
6. The aggregate retained rebate per centage; and
7. Across all of the pharmacy benefits manager's contractual or
other relationships with all health plans or hea lth insurers, the
highest aggregate retained rebate percentage, the lowest aggregate
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retained rebate percentage, and the mean aggr egate retained rebate
percentage.
B. The Department shall publish in a timely manner the
information that it receives under s ubsection A of this section on a
publicly available website, provid ed 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 s pecific drugs or classes of drugs, or the amount
of any rebates provided for specific drugs or classes of drugs.
SECTION 4. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 6962.2 of Title 36, unless there
is created a duplication in numb ering, reads as follows:
A. A pharmacy benefits manager (PBM) shall have a fiduciary
duty to any health carrier and health insurer clients and shall
discharge that duty in accordance with the provisions of state and
federal law.
B. A PBM shall perform its duties with care, skill, prudence,
diligence, and professionalism.
C. A PBM shall notify a health carrier client in writing of any
activity, policy, or practice of the pharmacy benefits manager that
directly or indirectly presents any conflict of interest with the
duties imposed in this section.
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SECTION 5. This act shall become effective November 1, 2022.
COMMITTEE REPORT BY: COMMITTEE ON PUBLIC HEALTH, dated 04/13/2022 -
DO PASS.