Bill Text: CT SB01052 | 2015 | General Assembly | Comm Sub

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Bill Title: An Act Concerning Maximum Allowable Cost Lists And Disclosures By Pharmacy Benefit Managers.

Spectrum: Committee Bill

Status: (Introduced - Dead) 2015-05-07 - Referred by Senate to Committee on Appropriations [SB01052 Detail]

Download: Connecticut-2015-SB01052-Comm_Sub.html

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General Assembly		Raised Bill No. 1052
January Session, 2015		LCO No. 4527
		*_____SB01052GL____041315____*
Referred to Committee on INSURANCE AND REAL ESTATE
Introduced by:
(INS)

AN ACT CONCERNING MAXIMUM ALLOWABLE COST LISTS AND DISCLOSURES BY PHARMACY BENEFIT MANAGERS.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. (NEW) (Effective October 1, 2015) (a) As used in this section, (1) "maximum allowable cost" means the maximum amount a pharmacy benefits manager will reimburse a pharmacy for a prescription drug, and (2) "maximum allowable cost list" means a list of prescription drugs for which a maximum allowable cost has been established by a pharmacy benefits manager.

(b) (1) Each pharmacy benefits manager shall, prior to placing a prescription drug on a maximum allowable cost list, determine that (A) there are at least three nationally available generic drugs that are therapeutically equivalent to such drug, (B) such drug has been designated as therapeutically equivalent to other pharmaceutically equivalent products with an "A" code or as "AB" in the most recent edition or supplement of the federal Food and Drug Administration's Approved Drug Products With Therapeutic Equivalence Evaluations, and (C) such drug is available for purchase by pharmacies in this state from national or regional wholesalers and is not obsolete or temporarily unavailable. As used in this subparagraph, "obsolete" means a prescription drug that may be listed in national drug pricing compendia but is no longer actively marketed by the manufacturer or labeler.

(2) Each pharmacy benefits manager shall remove a prescription drug from a maximum allowable cost list not later than three business days after such drug no longer meets or the pharmacy benefits manager becomes aware that such drug no longer meets a requirement under subdivision (1) of this subsection.

(c) Each contract entered into, renewed or amended on or after October 1, 2015, between a pharmacy benefits manager and a pharmacy or a pharmacy's contracting representative or agent shall disclose (1) the methodology and sources used by such pharmacy benefits manager to determine the maximum allowable costs for prescription drugs on each maximum allowable cost list for such pharmacy, (2) the process used by the pharmacy benefits manager to notify such pharmacy of any updates to the maximum allowable cost lists for such pharmacy, and (3) the procedures for the pharmacy to contest the maximum allowable cost of a prescription drug.

(d) Each contract entered into, renewed or amended on or after October 1, 2015, between a pharmacy benefits manager and a plan sponsor shall disclose (1) the methodology and sources used by such pharmacy benefits manager to determine the maximum allowable costs for prescription drugs on each maximum allowable cost list for such plan, and (2) if the pharmacy benefits manager uses a maximum allowable cost list for prescription drugs dispensed at retail but not for prescription drugs dispensed through a mail order pharmacy, such fact.

(e) Each pharmacy benefits manager shall:

(1) Provide an updated maximum allowable cost list to a plan sponsor whenever there is a change to any such list under such plan;

(2) Disclose to a plan sponsor in writing, if a pharmacy benefits manager implements the use of a maximum allowable cost list other than as was disclosed to such plan sponsor under subdivision (2) of subsection (d) of this section, the implementation of such use not later than twenty-one business days after such implementation;

(3) Disclose to a plan sponsor whether such pharmacy benefits manager uses the identical maximum allowable cost list to bill the plan sponsor as when such manager reimburses in-network pharmacies. If the pharmacy benefits manager uses multiple maximum allowable cost lists for such purposes, such manager shall disclose to a plan sponsor any difference between the amount such manager bills the plan sponsor for a prescription drug and the amount such manager reimburses to any pharmacy for such drug;

(4) Update each maximum allowable cost list at least every seven calendar days and promptly notify and make available to each in-network pharmacy any updated list applicable to such pharmacy; and

(5) Establish an appeals process for a pharmacy to contest the maximum allowable cost of a prescription drug in accordance with the provisions of subsection (f) of this section. Each pharmacy benefits manager shall provide to each in-network pharmacy information concerning the appeals process, including the telephone number and other contact information of an individual who is responsible for processing such appeals for such manager.

(f) (1) A pharmacy may contest the maximum allowable cost of a prescription drug based on one or both of the following grounds:

(A) The prescription drug does not meet a requirement under subdivision (1) of subsection (b) of this section; or

(B) The maximum allowable cost established by the pharmacy benefits manager for the prescription drug is below the cost at which such drug is available for purchase from national or regional wholesalers.

(2) A pharmacy contesting the maximum allowable cost of a prescription drug shall file an appeal with the pharmacy benefits manager not later than sixty calendar days after filing its submission for the initial claim for reimbursement for such drug. The pharmacy benefits manager shall investigate and issue a determination of such appeal not later than seven calendar days after such manager receives such appeal.

(A) If the pharmacy benefits manager determines the appeal is denied, such manager shall provide to the pharmacy the reason for the denial and the national drug code of a therapeutically equivalent prescription drug that is available for purchase by pharmacies in this state from national or regional wholesalers at a price that is equal to or less than the maximum allowable cost for the prescription drug that is the subject of the appeal.

(B) If the pharmacy benefits manager determines the appeal is valid, such manager shall (i) adjust the maximum allowable cost for such prescription drug retroactively to the date of the initial claim submission, and (ii) adjust such maximum allowable cost for all similarly situated in-network pharmacies not later than five business days after making such determination.

(g) In addition to any other penalty provided by law, a pharmacy benefits manager that violates any provision of this section may be fined not less than one thousand dollars for each violation.

Sec. 2. Section 38a-479aaa of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2015):

As used in this section and sections 38a-479bbb to 38a-479iii, inclusive, and section 1 of this act:

(1) "Commissioner" means the Insurance Commissioner;

(2) "Department" means the Insurance Department;

(3) "Drug" means drug, as defined in section 21a-92;

(4) "Person" means person, as defined in section 38a-1;

(5) "Pharmacist services" includes (A) drug therapy and other patient care services provided by a licensed pharmacist intended to achieve outcomes related to the cure or prevention of a disease, elimination or reduction of a patient's symptoms, and (B) education or intervention by a licensed pharmacist intended to arrest or slow a disease process;

(6) "Pharmacist" means an individual licensed to practice pharmacy under section 20-590, 20-591, 20-592 or 20-593, and who is thereby recognized as a health care provider by the state of Connecticut;

(7) "Pharmacy" means a place of business where drugs may be sold at retail and for which a pharmacy license has been issued to an applicant pursuant to section 20-594; and

(8) "Pharmacy benefits manager" or "manager" means any person that administers the prescription drug, prescription device, pharmacist services or prescription drug and device and pharmacist services portion of a health benefit plan on behalf of plan sponsors such as self-insured employers, insurance companies, labor unions and health care centers.

Sec. 3. Section 38a-479hhh of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2015):

(a) The commissioner may conduct investigations and hold hearings on any matter under the provisions of sections 38a-479aaa to 38a-479iii, inclusive, as amended by this act, and section 1 of this act. The commissioner may issue subpoenas, administer oaths, compel testimony and order the production of books, records and documents. If any person refuses to appear, to testify or to produce any book, record, paper or document when so ordered, upon application of the commissioner, a judge of the Superior Court may make such order as may be appropriate to aid in the enforcement of this section.

(b) Any person aggrieved by an order or decision of the commissioner under sections 38a-479aaa to 38a-479iii, inclusive, as amended by this act, and section 1 of this act may appeal therefrom in accordance with the provisions of section 4-183.

This act shall take effect as follows and shall amend the following sections:
Section 1	October 1, 2015	New section
Sec. 2	October 1, 2015	38a-479aaa
Sec. 3	October 1, 2015	38a-479hhh

INS	Joint Favorable
GL	Joint Favorable