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HOUSE OF REPRESENTATIVES - FLOOR VERSION
STATE OF OKLAHOMA
2nd Session of the 58th Legislature (2022)
ENGROSSED SENATE
BILL NO. 1635 By: Jett and Stephens of the
Senate
and
McEntire of the House
An Act relating to pharmacy benefits managers;
amending 36 O.S. 2021, Sections 6960 and 6962, which
relate to definitions and compliance review;
modifying definitions; prohibiting certain actions by
pharmacy benefits managers; providing enforcement
measures for certain violations of the Patient ’s
Right to Pharmacy Choice Act; directing deposit of
certain attorney fees; updating statutory language;
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:
Section 6960. For purposes of the Patient’s Right to Pharmacy
Choice Act:
1. “Clawback” means an act by the pharmacy benefits manager
(PBM) of recovering from the dispensing pharmac y and keeping as
revenue the difference between a patient’s co-payment and the
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pharmacy drug cost when the co-payment exceeds the pharmacy drug
cost;
1. 2. “Health insurer” means any corporation, association,
benefit society, exchange, partnership or individual licensed by the
Oklahoma Insurance Code;
2. 3. “Mail-order pharmacy” means a pharmacy licensed by this
state that primarily dispen ses and delivers covered drugs via common
carrier;
3. 4. “Pharmacy benefits manager ” or “PBM” means a person that
performs pharmacy benefits management and any other person acting
for such person under a contractu al or employment relationship in
the performance of pharmacy benefits management for a mana ged-care
company, nonprofit hospital, medical service organization, insuran ce
company, third-party payor or a health program administered by a
department of this sta te;
4. 5. “Pharmacy and therapeutics commit tee” or “P&T committee”
means a committee at a h ospital or a health insurance plan that
decides which drugs will appear on that entity’s drug formulary;
5. 6. “Retail pharmacy network” means retail pharmacy providers
contracted with a PBM in which the phar macy primarily fills and
sells prescriptions via a retail, storefront location;
6. 7. “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. 8. “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. 9. “Urban service area” means a five-digit ZIP code in which
the population density is greater th an 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 Depart ment shall
review and approve retail pharmacy network access for all pharmacy
benefits managers (PBMs) to ensure compliance with Section 4 of this
act Section 6961 et seq. of this title.
B. A PBM, or an agent of a PBM, shall not:
1. Cause or knowingly pe rmit 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
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c. the development or management of claims processing
services or claims payment service s related to
participation in a retail pharmacy network;
3. Charge a pharmacist or pharmacy a fee related to the
credentialing of a p harmacy 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 pharma cy a fee related to the
development or management of claims processing s ervices or claims
payment services related to participation in a retail pharmacy
network;
6. Reimburse a pharmacy or pharmacist in the state an amount
less than the amount that the PBM reimburses 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 participation status if the pharmacy
is willing to accept the terms and conditions that the PBM has
established for other pharmacies as a condition of preferred network
participation status;
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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 probation status, with the State Bo ard 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, unless:
a. the original claim was submitted fraudulently, or
b. to correct errors id entified in an audit, so long as
the audit was conducted in compliance with Sections
356.2 and 356.3 of Title 59 of the Oklahoma Statutes;
or
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 benefits manager network ;
or
11. Participate in a clawback as defined in Section 1 of this
act.
C. The prohibitions under this section shall apply to contracts
between pharmacy benefits managers and pharmacists or pharmacies for
participation in retail pharmacy networks.
1. A PBM contract shall:
a. not restrict, directly or indirectly, any pha rmacy
that dispenses a prescription drug from informing, or
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penalize such pharmacy for informing, an individual of
any differential between the ind ividual’s out-of-
pocket cost or coverage with re spect to acquisition 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 a ny 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 coverage with respect to
acquisition of the drug and the amount an individual
would pay for acquisition of the drug without using
any health plan or health insurance coverage , and
c. ensure that access to local healthca re is not
jeopardized by immediate ly 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 participating
pharmacist or pharmacy shall not prohibit , restrict or limit
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disclosure of information to the Insurance Commissioner, law
enforcement or state and federal governmental officials
investigating or examining a complaint or conducting a revie w of a
pharmacy benefits manager’s compliance with the requ irements under
the Patient’s Right to Pharmacy Choice Act.
3. A pharmacy benefits manager shall establish and maintain an
electronic claim inquiry p rocessing system using the National
Council for Prescription Drug Programs’ current standards to
communicate information to pharmacies submit ting claim inquiries.
SECTION 3. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 6966.1 of Title 36, unless there
is created a duplication in numbering, reads as follows:
A. Notwithstanding any other provisions of law, the Insurance
Commissioner, upon finding a pharmacy benefits manager in violat ion
of Section 6962 of Title 36 of the Oklahoma Statu tes, shall issue a
cease and desist order to the PBM directing it to stop the unlawful
practice. If the PBM fails or refuses to comply with the order, the
Commissioner shall have the authority to revoke or suspend the PBM’s
license. The Commissioner shall use his or her authority to the
extent necessary to obtain the PBM’s compliance with the order. If
requested by the Commissioner, the Att orney General shall offer his
or her assistance to enforce the order of the Commissioner.
B. Reasonable attorney fees shall be awarded the Commissioner
if judicial action is necessary for the enforcement of the order.
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Fees collected by the Commissioner without assistance of the Office
of the Attorney General shall be credited to the Insurance
Commissioner’s Revolving Fund. Fees collected by the Attorney
General shall be credited to the Attorney General’s Revolving Fund.
SECTION 4. This act shall become effective November 1, 2022.
COMMITTEE REPORT BY: COMMITTEE ON PUBLIC HEALTH, dated 04/13/2022 -
DO PASS.