2015 -- H 5602 SUBSTITUTE A

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LC001431/SUB A/4

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2015

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A N   A C T

RELATING TO INSURANCE - PRESCRIPTION DRUG BENEFITS

     Introduced By: Representatives Kennedy, Azzinaro, Keable, Winfield, and Shekarchi

     Date Introduced: February 25, 2015

     Referred To: House Corporations

     It is enacted by the General Assembly as follows:

     SECTION 1. Chapter 27-18 of the General Laws entitled "Accident and Sickness

Insurance Policies" is hereby amended by adding thereto the following section:

     27-18-33.2. Pharmacy benefit manager requirements with respect to multi-source

generic pricing updates to pharmacies. – (a) Definitions. As used herein:

     (1) "Maximum allowable cost" means the maximum amount that a pharmacy benefits

manager will pay toward the cost of a drug;

     (2) "Nationally available" means that all pharmacies in this state can purchase the drug

from regional or national wholesalers and that the product is not obsolete or temporarily

unavailable;

     (3) "Therapeutically equivalent" means the equivalent determined by the United States

Food and Drug Administration.

     (b) "Pharmacy benefit manager" (PBM) means and refers to all requirements with respect

to multi-source generic pricing updates to pharmacies:

     (1) Upon each contract execution or renewal, a PBM shall, with respect to contracts

between PBM and a pharmacy or, alternatively, a PBM and a pharmacy's contracting

representative or agent such as a pharmacy services administrative organization (PSAO):

     (i) Include in such contracts a requirement that the PBM update such maximum allowable

costs (MAC) pricing information on such contracts at least every ten (10) calendar days, and

establish a reasonable process for the prompt notification of such pricing updates to network

pharmacies.

     SECTION 2. Chapter 27-19 of the General Laws entitled "Nonprofit Hospital Service

Corporations" is hereby amended by adding thereto the following section:

     27-19-42.1. Pharmacy benefit manager requirements with respect to multi-source

generic pricing updates to pharmacies. -- (a) Definitions. As used herein:

     (1) "Maximum allowable cost" means the maximum amount that a pharmacy benefits

manager will pay toward the cost of a drug;

     (2) "Nationally available" means that all pharmacies in this state can purchase the drug

from regional or national wholesalers and that the product is not obsolete or temporarily

unavailable;

     (3) "Therapeutically equivalent" means the equivalent determined by the United States

Food and Drug Administration.

     (b) "Pharmacy benefit manager" (PBM) means and refers to all requirements with respect

to multi-source generic pricing updates to pharmacies:

     (1) Upon each contract execution or renewal, a PBM shall, with respect to contracts

between PBM and a pharmacy or, alternatively, a PBM and a pharmacy's contracting

representative or agent such as a pharmacy services administrative organization (PSAO):

     (i) Include in such contracts a requirement that the PBM update such maximum allowable

costs (MAC) pricing information on such contracts at least every ten (10) calendar days, and

establish a reasonable process for the prompt notification of such pricing updates to network

pharmacies.

     SECTION 3. Chapter 27-19.2 of the General Laws entitled "Nonprofit Hospital and

Medical Service Corporations" is hereby amended by adding thereto the following section:

     27-19.2-12. Pharmacy benefit manager requirements with respect to multi-source

generic pricing updates to pharmacies. -- (a) Definitions. As used herein:

     (1) "Maximum allowable cost" means the maximum amount that a pharmacy benefits

manager will pay toward the cost of a drug;

     (2) "Nationally available" means that all pharmacies in this state can purchase the drug

from regional or national wholesalers and that the product is not obsolete or temporarily

unavailable;

     (3) "Therapeutically equivalent" means the equivalent determined by the United States

Food and Drug Administration.

     (b) "Pharmacy benefit manager" (PBM) means and refers to all requirements with respect

to multi-source generic pricing updates to pharmacies:

LC001431/SUB A/4 - Page 2 of 5

     (1) Upon each contract execution or renewal, a PBM shall, with respect to contracts

between PBM and a pharmacy or, alternatively, a PBM and a pharmacy's contracting

representative or agent such as a pharmacy services administrative organization (PSAO):

     (i) Include in such contracts a requirement that the PBM update such maximum allowable

costs (MAC) pricing information on such contracts at least every ten (10) calendar days, and

establish a reasonable process for the prompt notification of such pricing updates to network

pharmacies.

     SECTION 4. Chapter 27-20.1 of the General Laws entitled "Nonprofit Dental Service

Corporations" is hereby amended by adding thereto the following section:

     27-20.1-15.1. Pharmacy benefit manager requirements with respect to multi-source

generic pricing updates to pharmacies. -- (a) Definitions. As used herein:

     (1) "Maximum allowable cost" means the maximum amount that a pharmacy benefits

manager will pay toward the cost of a drug;

     (2) "Nationally available" means that all pharmacies in this state can purchase the drug

from regional or national wholesalers and that the product is not obsolete or temporarily

unavailable;

     (3) "Therapeutically equivalent" means the equivalent determined by the United States

Food and Drug Administration.

     (b) "Pharmacy benefit manager" (PBM) means and refers to all requirements with respect

to multi-source generic pricing updates to pharmacies:

     (1) Upon each contract execution or renewal, a PBM shall, with respect to contracts

between PBM and a pharmacy or, alternatively, a PBM and a pharmacy's contracting

representative or agent such as a pharmacy services administrative organization (PSAO):

     (i) Include in such contracts a requirement that the PBM update such maximum allowable

costs (MAC) pricing information on such contracts at least every ten (10) calendar days, and

establish a reasonable process for the prompt notification of such pricing updates to network

pharmacies.

     SECTION 5. Chapter 27-41 of the General Laws entitled "Health Maintenance

Organizations" is hereby amended by adding thereto the following section:

     27-41-38.1. Pharmacy benefit manager requirements with respect to multi-source

generic pricing updates to pharmacies. -- (a) Definitions. As used herein:

     (1) "Maximum allowable cost" means the maximum amount that a pharmacy benefits

manager will pay toward the cost of a drug;

     (2) "Nationally available" means that all pharmacies in this state can purchase the drug

LC001431/SUB A/4 - Page 3 of 5

from regional or national wholesalers and that the product is not obsolete or temporarily

unavailable;

     (3) "Therapeutically equivalent" means the equivalent determined by the United States

Food and Drug Administration.

     (b) "Pharmacy benefit manager" (PBM) means and refers to all requirements with respect

to multi-source generic pricing updates to pharmacies:

     (1) Upon each contract execution or renewal, a PBM shall, with respect to contracts

between PBM and a pharmacy or, alternatively, a PBM and a pharmacy's contracting

representative or agent such as a pharmacy services administrative organization (PSAO):

     (i) Include in such contracts a requirement that the PBM update such maximum allowable

costs (MAC) pricing information on such contracts at least every ten (10) calendar days, and

establish a reasonable process for the prompt notification of such pricing updates to network

pharmacies.

     SECTION 6. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO INSURANCE - PRESCRIPTION DRUG BENEFITS

***

     This act would require that pharmacy benefit managers (PBM) include in each contract a

requirement that the PBM would update maximum allowable cost (MAC) pricing information

every ten (10) calendar days pertaining to policies relating to accident and sickness, nonprofit

hospital service corporations, nonprofit medical service corporations, nonprofit dental service

corporations and health maintenance organizations.

     This act would take effect upon passage.

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