Nonprofit Medical Service Corporations

SECTION 27-20-23.2

§ 27-20-23.2 Pharmacy benefit manager requirements with respect to multi-source generic pricing updates to pharmacies.

(a) Definitions. As used herein:

(1) "Maximum-allowable cost" or "MAC" means the maximum amount that a pharmacy benefits manager will reimburse toward the cost of a drug;

(2) "Nationally available" means that there is an adequate supply available from regional or national wholesalers and that the product is not obsolete or temporarily unavailable;

(3) "Pharmacy-benefit manager" or "PBM" means an entity doing business in this state that contracts to administer or manage prescription-drug benefits on behalf of any carrier that provides prescription-drug benefits to residents of this state.

(b) Upon each contract execution or renewal, a PBM shall, with respect to contracts between a PBM and a pharmacy or, alternatively, a PBM and a pharmacy's contracting representative or agent such as a pharmacy services administrative organization (PSAO):

(1) Include in such contracts a requirement to update pricing information on the MAC list at least every ten (10) calendar days;

(2) Maintain a procedure to eliminate products from the list of drugs subject to such pricing, or modify MAC rates when such drugs do not meet the standards and requirements of this section as set forth in order to remain consistent with pricing changes in the marketplace.

(c) PBM requirements for inclusion of products on a list of drugs subject to MAC pricing. In order to place a particular prescription drug on a MAC list, the PBM must, at a minimum, ensure that:

(1) The product must be listed as "A", "AB", or "B" rated in the most recent version of the United States Food and Drug Administration's approved drug products with therapeutic equivalence evaluations, also known as the orange book, or has an "NR" or "NA" rating or similar rating by a nationally recognized reference; and

(2) The product must be nationally available.

(d) Standards for pharmacy appeals. All contracts between a PBM, a contracted pharmacy or, alternatively, a PBM and a pharmacy's contracting representative or agent, such as a pharmacy services administrative organization (PSAO), shall include a process to appeal, investigate, and resolve disputes regarding MAC pricing. The process shall include the following provisions:

(1) The right to appeal shall be limited to fifteen (15) days following the initial claim;

(2) The appeal shall be investigated and resolved within fifteen (15) days following receipt of the appeal;

(3) A process by which a network pharmacy may contact the PBM regarding the appeals process;

(4) If the appeal is denied, the PBM shall provide the reason for the denial and identify the national drug code of a drug product that is available in adequate supply;

(5) If an appeal is upheld, the PBM shall make an adjustment to the list effective no later than one day after the date of determination; and

(6) The department of health shall exercise oversight and enforcement of this section.

History of Section.
(P.L. 2016, ch. 166, § 3; P.L. 2016, ch. 168, § 3.)