Bill Text: FL S1550 | 2023 | Regular Session | Enrolled
Bill Title: Prescription Drugs
Spectrum: Slight Partisan Bill (Republican 4-2)
Status: (Passed) 2023-05-04 - Chapter No. 2023-29, companion bill(s) passed, see CS/SB 1552 (Ch. 2023-30) [S1550 Detail]
Download: Florida-2023-S1550-Enrolled.html
ENROLLED 2023 Legislature CS for CS for SB 1550, 2nd Engrossed 20231550er 1 2 An act relating to prescription drugs; providing a 3 short title; amending s. 499.005, F.S.; specifying 4 additional prohibited acts related to the Florida Drug 5 and Cosmetic Act; amending s. 499.012, F.S.; providing 6 that prescription drug manufacturer and nonresident 7 prescription drug manufacturer permitholders are 8 subject to specified requirements; creating s. 9 499.026, F.S.; defining terms; requiring certain drug 10 manufacturers to notify the Department of Business and 11 Professional Regulation of reportable drug price 12 increases on a specified form on the effective date of 13 such increase; providing requirements for the form; 14 providing construction; requiring such manufacturers 15 to submit certain reports to the department by a 16 specified date each year; providing requirements for 17 the reports; authorizing the department to request 18 certain additional information from the manufacturer 19 before approving the report; requiring the department 20 to submit the forms and reports to the Agency for 21 Health Care Administration to be posted on the 22 agency’s website; prohibiting the agency from posting 23 on its website certain submitted information that is 24 marked as a trade secret; requiring the agency to 25 compile all information from the submitted forms and 26 reports and make it available to the Governor and the 27 Legislature upon request; prohibiting manufacturers 28 from claiming a public records exemption for trade 29 secrets for certain information provided in such forms 30 or reports; providing that department employees remain 31 protected from liability for releasing the forms and 32 reports as public records; authorizing the department, 33 in consultation with the agency, to adopt rules; 34 providing for emergency rulemaking; amending s. 35 624.307, F.S.; requiring the Division of Consumer 36 Services of the Department of Financial Services to 37 designate an employee as the primary contact for 38 consumer complaints involving pharmacy benefit 39 managers; requiring the division to refer certain 40 complaints to the Office of Insurance Regulation; 41 amending s. 624.490, F.S.; revising the definition of 42 the term “pharmacy benefit manager”; amending s. 43 624.491, F.S.; revising provisions related to pharmacy 44 audits; amending s. 626.88, F.S.; revising the 45 definition of the term “administrator”; defining the 46 term “pharmacy benefit manager”; amending s. 626.8805, 47 F.S.; providing a grandfathering provision for certain 48 pharmacy benefit managers operating as administrators; 49 providing a penalty for certain persons who do not 50 hold a certificate of authority to act as an 51 administrator on or after a specified date; requiring 52 the office to submit a report detailing specified 53 information to the Governor and the Legislature by a 54 specified date; providing additional requirements for 55 pharmacy benefit managers applying for a certificate 56 of authority to act as an administrator; exempting 57 pharmacy benefit managers from certain fees; amending 58 s. 626.8814, F.S.; requiring pharmacy benefit managers 59 to identify certain ownership affiliations to the 60 office; requiring pharmacy benefit managers to report 61 any change in such information to the office within a 62 specified timeframe; creating s. 626.8825, F.S.; 63 defining terms; providing requirements for certain 64 contracts between a pharmacy benefit manager and a 65 pharmacy benefits plan or program; requiring pharmacy 66 benefits plans and programs, beginning on a specified 67 date, to annually submit a certain attestation to the 68 office; providing requirements for certain contracts 69 between a pharmacy benefit manager and a participating 70 pharmacy; requiring the Financial Services Commission 71 to adopt rules; specifying requirements for certain 72 administrative appeal procedures that such contracts 73 with participating pharmacies must include; requiring 74 pharmacy benefit managers to submit reports on 75 submitted appeals to the office every 90 days; 76 creating s. 626.8827, F.S.; specifying prohibited 77 practices for pharmacy benefit managers; creating s. 78 626.8828, F.S.; authorizing the office to investigate 79 administrators that are pharmacy benefit managers and 80 certain applicants; requiring the office to review 81 certain referrals and investigate them under certain 82 circumstances; providing for biennial reviews of 83 pharmacy benefit managers; requiring the office to 84 submit an annual report of its examinations to the 85 Governor and the Legislature by a specified date; 86 providing requirements for the report, including 87 specified additional requirements for the biennial 88 reports; authorizing the office to conduct additional 89 examinations; requiring the office to conduct an 90 examination under certain circumstances; providing 91 procedures and requirements for such examinations; 92 defining the terms “contracts” and “knowing and 93 willful”; providing that independent professional 94 examiners under contract with the office may conduct 95 examinations of pharmacy benefit managers; requiring 96 the commission to adopt specified rules; specifying 97 provisions that apply to such investigations and 98 examinations; providing recordkeeping requirements for 99 pharmacy benefit managers; authorizing the office to 100 order the production of such records and other 101 specified information; authorizing the office to take 102 statements under oath; requiring pharmacy benefit 103 managers and applicants subjected to an investigation 104 or examination to pay the associated expenses; 105 specifying covered expenses; providing for collection 106 of such expenses; providing for the deposit of certain 107 moneys into the Insurance Regulatory Trust Fund; 108 authorizing the office to pay examiners, 109 investigators, and other persons from such fund; 110 providing administrative penalties; providing grounds 111 for administrative action against a certificate of 112 authority; amending s. 626.89, F.S.; requiring 113 pharmacy benefit managers to notify the office of 114 specified complaints, settlements, or discipline 115 within a specified timeframe; requiring pharmacy 116 benefit managers to annually submit a certain 117 attestation statement to the office; amending s. 118 627.42393, F.S.; providing that certain step-therapy 119 protocol requirements apply to a pharmacy benefit 120 manager acting on behalf of a health insurer; amending 121 ss. 627.64741 and 627.6572, F.S.; conforming 122 provisions to changes made by the act; amending s. 123 641.31, F.S.; providing that certain step-therapy 124 protocol requirements apply to a pharmacy benefit 125 manager acting on behalf of a health maintenance 126 organization; amending s. 641.314, F.S.; conforming a 127 provision to changes made by the act; providing 128 legislative intent, construction, and severability; 129 providing appropriations and authorizing positions; 130 providing an effective date. 131 132 Be It Enacted by the Legislature of the State of Florida: 133 134 Section 1. This act may be cited as the “Prescription Drug 135 Reform Act.” 136 Section 2. Subsection (29) is added to section 499.005, 137 Florida Statutes, to read: 138 499.005 Prohibited acts.—It is unlawful for a person to 139 perform or cause the performance of any of the following acts in 140 this state: 141 (29) Failure to accurately complete and timely submit 142 reportable drug price increase forms, reports, and documents as 143 required by s. 499.026 and rules adopted thereunder. 144 Section 3. Subsection (16) is added to section 499.012, 145 Florida Statutes, to read: 146 499.012 Permit application requirements.— 147 (16) A permit for a prescription drug manufacturer or a 148 nonresident prescription drug manufacturer is subject to the 149 requirements of s. 499.026. 150 Section 4. Section 499.026, Florida Statutes, is created to 151 read: 152 499.026 Notification of manufacturer prescription drug 153 price increases.— 154 (1) As used in this section, the term: 155 (a) “Course of therapy” means the recommended daily dose 156 units of a prescription drug pursuant to its prescribing label 157 for 30 days or the recommended daily dose units of a 158 prescription drug pursuant to its prescribing label for a normal 159 course of treatment which is less than 30 days. 160 (b) “Manufacturer” means a person holding a prescription 161 drug manufacturer permit or a nonresident prescription drug 162 manufacturer permit under s. 499.01. 163 (c) “Prescription drug” has the same meaning as in s. 164 499.003 and includes biological products but is limited to those 165 prescription drugs and biological products intended for human 166 use. 167 (d) “Reportable drug price increase” means, for a 168 prescription drug with a wholesale acquisition cost of at least 169 $100 for a course of therapy before the effective date of an 170 increase: 171 1. Any increase of 15 percent or more of the wholesale 172 acquisition cost during the preceding 12-month period; or 173 2. Any cumulative increase of 30 percent or more of the 174 wholesale acquisition cost during the preceding 3 calendar 175 years. In calculating the 30 percent threshold, the manufacturer 176 must base the calculation on the wholesale acquisition cost in 177 effect at the end of the 3-year period as compared to the 178 wholesale acquisition cost in effect at the beginning of the 179 same 3-year period. 180 (e) “Wholesale acquisition cost” means, with respect to a 181 prescription drug or biological product, the manufacturer’s list 182 price for the prescription drug or biological product to 183 wholesalers or direct purchasers in the United States, not 184 including prompt pay or other discounts, rebates, or reductions 185 in price, for the most recent month for which the information is 186 available, as reported in wholesale price guides or other 187 publications of drug or biological product pricing data. 188 (2) On the effective date of a manufacturer’s reportable 189 drug price increase, the manufacturer must provide notification 190 of each reportable drug price increase to the department on a 191 form prescribed by the department. The form must require the 192 manufacturer to specify all of the following: 193 (a) The proprietary and nonproprietary names of the 194 prescription drug, as applicable. 195 (b) The wholesale acquisition cost before the reportable 196 drug price increase. 197 (c) The dollar amount of the reportable drug price 198 increase. 199 (d) The percentage amount of the reportable drug price 200 increase from the wholesale acquisition cost before the 201 reportable drug price increase. 202 (e) Whether a change or an improvement in the prescription 203 drug necessitates the reportable drug price increase. 204 (f) If a change or an improvement in the prescription drug 205 necessitates the reportable drug price increase as reported in 206 paragraph (e), the manufacturer must describe the change or 207 improvement. 208 (g) The intended uses of the prescription drug. 209 210 This subsection does not prohibit a manufacturer from notifying 211 other parties, such as pharmacy benefit managers, of a drug 212 price increase before the effective date of the drug price 213 increase. 214 (3) By April 1 of each year, each manufacturer shall submit 215 a report to the department on a form prescribed by the 216 department. The report must include all of the following: 217 (a) A list of all prescription drugs affected by a 218 reportable drug price increase during the previous calendar year 219 and both the dollar amount of each reportable drug price 220 increase and the percentage increase of each reportable drug 221 price increase relative to the previous wholesale acquisition 222 cost of the prescription drug. The prescription drugs must be 223 identified using their proprietary names and nonproprietary 224 names, as applicable. 225 (b) If more than one form has been filed under this section 226 for previous reportable drug price increases, the percentage 227 increase of the prescription drug from the earliest form filed 228 to the most recent form filed. 229 (c) The intended uses of each prescription drug listed in 230 the report and whether the prescription drug manufacturer 231 benefits from market exclusivity for such drug. 232 (d) The length of time the prescription drug has been 233 available for purchase. 234 (e) A listing of the factors contributing to each 235 reportable drug price increase. As used in this section, the 236 term “factors” means any of the following: research and 237 development; manufacturing costs; advertising and marketing; 238 whether the drug has more competitive value; an increased rate 239 of inflation or other economic dynamics; changes in market 240 dynamics; supporting regulatory and safety commitments; 241 operating patient assistance and educational programs; rebate 242 increases, including any rebate increase requested by a pharmacy 243 benefit manager; Medicaid, Medicare, or 340B Drug Pricing 244 Program offsets; profit; or other factors. An estimated 245 percentage of the influence of each listed factor must be 246 provided to equal 100 percent. 247 (f) A description of the justification for each factor 248 referenced in paragraph (e) must be provided with such 249 specificity as to explain the need or justification for each 250 reportable drug price increase. The department may request 251 additional information from a manufacturer relating to the need 252 or justification for any reportable drug price increase before 253 approving the manufacturer’s report. 254 (g) Any action that the manufacturer has filed to extend a 255 patent report after the first extension has been granted. 256 (4)(a) The department shall submit all forms and reports 257 submitted by manufacturers to the Agency for Health Care 258 Administration, to be posted on the agency’s website pursuant to 259 s. 408.062. The agency may not post on its website any of the 260 information provided pursuant to paragraph (2)(f), paragraph 261 (3)(f), or paragraph (3)(g) which is marked as a trade secret. 262 The agency shall compile all information from the forms and 263 reports submitted by manufacturers and make it available upon 264 request to the Governor, the President of the Senate, and the 265 Speaker of the House of Representatives. 266 (b) Except for information provided pursuant to paragraph 267 (2)(f), paragraph (3)(f), or paragraph (3)(g), a manufacturer 268 may not claim a public records exemption for a trade secret 269 under s. 119.0715 for any information required by the department 270 under this section. Department employees remain protected from 271 liability for release of forms and reports pursuant to s. 272 119.0715(4). 273 (5) The department, in consultation with the Agency for 274 Health Care Administration, shall adopt rules to implement this 275 section. 276 (a) The department shall adopt necessary emergency rules 277 pursuant to s. 120.54(4) to implement this section. If an 278 emergency rule adopted under this section is held to be 279 unconstitutional or an invalid exercise of delegated legislative 280 authority and becomes void, the department may adopt an 281 emergency rule pursuant to this section to replace the rule that 282 has become void. If the emergency rule adopted to replace the 283 void emergency rule is also held to be unconstitutional or an 284 invalid exercise of delegated legislative authority and becomes 285 void, the department must follow the nonemergency rulemaking 286 procedures of the Administrative Procedure Act to replace the 287 rule that has become void. 288 (b) For emergency rules adopted under this section, the 289 department need not make the findings required under s. 290 120.54(4)(a). Emergency rules adopted under this section are 291 also exempt from: 292 1. Sections 120.54(3)(b) and 120.541. Challenges to 293 emergency rules adopted under this section are subject to the 294 time schedules provided in s. 120.56(5). 295 2. Section 120.54(4)(c) and remain in effect until replaced 296 by rules adopted under the nonemergency rulemaking procedures of 297 the Administrative Procedure Act. 298 Section 5. Paragraph (a) of subsection (10) of section 299 624.307, Florida Statutes, is amended, and paragraph (b) of that 300 subsection is republished, to read: 301 624.307 General powers; duties.— 302 (10)(a) The Division of Consumer Services shall perform the 303 following functions concerning products or services regulated by 304 the department or office: 305 1. Receive inquiries and complaints from consumers. 306 2. Prepare and disseminate information that the department 307 deems appropriate to inform or assist consumers. 308 3. Provide direct assistance to and advocacy for consumers 309 who request such assistance or advocacy. 310 4. With respect to apparent or potential violations of law 311 or applicable rules committed by a person or an entity licensed 312 by the department or office, report apparent or potential 313 violations to the office or to the appropriate division of the 314 department, which may take any additional action it deems 315 appropriate. 316 5. Designate an employee of the division as the primary 317 contact for consumers on issues relating to sinkholes. 318 6. Designate an employee of the division as the primary 319 contact for consumers and pharmacies on issues relating to 320 pharmacy benefit managers. The division must refer to the office 321 any consumer complaint that alleges conduct that may constitute 322 a violation of part VII of chapter 626 or for which a pharmacy 323 benefit manager does not respond in accordance with paragraph 324 (b). 325 (b) Any person licensed or issued a certificate of 326 authority by the department or the office shall respond, in 327 writing, to the division within 20 days after receipt of a 328 written request for documents and information from the division 329 concerning a consumer complaint. The response must address the 330 issues and allegations raised in the complaint and include any 331 requested documents concerning the consumer complaint not 332 subject to attorney-client or work-product privilege. The 333 division may impose an administrative penalty for failure to 334 comply with this paragraph of up to $2,500 per violation upon 335 any entity licensed by the department or the office and $250 for 336 the first violation, $500 for the second violation, and up to 337 $1,000 for the third or subsequent violation upon any individual 338 licensed by the department or the office. 339 Section 6. Subsection (1) of section 624.490, Florida 340 Statutes, is amended to read: 341 624.490 Registration of pharmacy benefit managers.— 342 (1) As used in this section, the term “pharmacy benefit 343 manager” has the same meaning as in s. 626.88means a person or344entity doing business in this state which contracts to345administer prescription drug benefits on behalf of a health346insurer or a health maintenance organization to residents of347this state. 348 Section 7. Subsections (1) and (5) of section 624.491, 349 Florida Statutes, are amended to read: 350 624.491 Pharmacy audits.— 351 (1) A pharmacy benefits plan or program as defined in s. 352 626.8825health insurer or health maintenance organization353 providing pharmacy benefitsthrough a major medical individual354or group health insurance policy or a health maintenance355contract, respectively,must comply with the requirements of 356 this section when the pharmacy benefits plan or programhealth357insurer or health maintenance organizationor any person or 358 entity acting on behalf of the pharmacy benefits plan or program 359health insurer or health maintenance organization, including, 360 but not limited to, a pharmacy benefit manager as defined in s. 361 626.88s. 624.490(1), audits the records of a pharmacy licensed 362 under chapter 465. The person or entity conducting such audit 363 must: 364 (a) Except as provided in subsection (3), notify the 365 pharmacy at least 7 calendar days before the initial onsite 366 audit for each audit cycle. 367 (b) Not schedule an onsite audit during the first 3 368 calendar days of a month unless the pharmacist consents 369 otherwise. 370 (c) Limit the duration of the audit period to 24 months 371 after the date a claim is submitted to or adjudicated by the 372 entity. 373 (d) In the case of an audit that requires clinical or 374 professional judgment, conduct the audit in consultation with, 375 or allow the audit to be conducted by, a pharmacist. 376 (e) Allow the pharmacy to use the written and verifiable 377 records of a hospital, physician, or other authorized 378 practitioner, which are transmitted by any means of 379 communication, to validate the pharmacy records in accordance 380 with state and federal law. 381 (f) Reimburse the pharmacy for a claim that was 382 retroactively denied for a clerical error, typographical error, 383 scrivener’s error, or computer error if the prescription was 384 properly and correctly dispensed, unless a pattern of such 385 errors exists, fraudulent billing is alleged, or the error 386 results in actual financial loss to the entity. 387 (g) Provide the pharmacy with a copy of the preliminary 388 audit report within 120 days after the conclusion of the audit. 389 (h) Allow the pharmacy to produce documentation to address 390 a discrepancy or audit finding within 10 business days after the 391 preliminary audit report is delivered to the pharmacy. 392 (i) Provide the pharmacy with a copy of the final audit 393 report within 6 months after the pharmacy’s receipt of the 394 preliminary audit report. 395 (j) Calculate any recoupment or penalties based on actual 396 overpayments and not according to the accounting practice of 397 extrapolation. 398 (5) A pharmacy benefits plan or programhealth insurer or399health maintenance organizationthat, under terms of a contract, 400 transfers to a pharmacy benefit manager the obligation to pay a 401 pharmacy licensed under chapter 465 for any pharmacy benefit 402 claims arising from services provided to or for the benefit of 403 an insured or subscriber remains responsible for a violation of 404 this section. 405 Section 8. Subsection (1) of section 626.88, Florida 406 Statutes, is amended, and subsection (6) is added to that 407 section, to read: 408 626.88 Definitions.—For the purposes of this part, the 409 term: 410 (1) “Administrator” meansisany person who directly or 411 indirectly solicits or effects coverage of, collects charges or 412 premiums from, or adjusts or settles claims on residents of this 413 state in connection with authorized commercial self-insurance 414 funds or with insured or self-insured programs which provide 415 life or health insurance coverage or coverage of any other 416 expenses described in s. 624.33(1);orany person who, through a 417 health care risk contract as defined in s. 641.234 with an 418 insurer or health maintenance organization, provides billing and 419 collection services to health insurers and health maintenance 420 organizations on behalf of health care providers; or a pharmacy 421 benefit manager. The term does not include, other thanany of 422 the followingpersons: 423 (a) An employer or wholly owned direct or indirect 424 subsidiary of an employer, on behalf of such employer’s 425 employees or the employees of one or more subsidiary or 426 affiliated corporations of such employer. 427 (b) A union on behalf of its members. 428 (c) An insurance company which is either authorized to 429 transact insurance in this state or is acting as an insurer with 430 respect to a policy lawfully issued and delivered by such 431 company in and pursuant to the laws of a state in which the 432 insurer was authorized to transact an insurance business. 433 (d) A health care services plan, health maintenance 434 organization, professional service plan corporation, or person 435 in the business of providing continuing care, possessing a valid 436 certificate of authority issued by the office, and the sales 437 representatives thereof, if the activities of such entity are 438 limited to the activities permitted under the certificate of 439 authority. 440 (e) An entity that is affiliated with an insurer and that 441 only performs the contractual duties, between the administrator 442 and the insurer, of an administrator for the direct and assumed 443 insurance business of the affiliated insurer. The insurer is 444 responsible for the acts of the administrator and is responsible 445 for providing all of the administrator’s books and records to 446 the insurance commissioner, upon a request from the insurance 447 commissioner. For purposes of this paragraph, the term “insurer” 448 means a licensed insurance company, health maintenance 449 organization, prepaid limited health service organization, or 450 prepaid health clinic. 451 (f) A nonresident entity licensed in its state of domicile 452 as an administrator if its duties in this state are limited to 453 the administration of a group policy or plan of insurance and no 454 more than a total of 100 lives for all plans reside in this 455 state. 456 (g) An insurance agent licensed in this state whose 457 activities are limited exclusively to the sale of insurance. 458 (h) A person appointed as a managing general agent in this 459 state, whose activities are limited exclusively to the scope of 460 activities conveyed under such appointment. 461 (i) An adjuster licensed in this state whose activities are 462 limited to the adjustment of claims. 463 (j) A creditor on behalf of such creditor’s debtors with 464 respect to insurance covering a debt between the creditor and 465 its debtors. 466 (k) A trust and its trustees, agents, and employees acting 467 pursuant to such trust established in conformity with 29 U.S.C. 468 s. 186. 469 (l) A trust exempt from taxation under s. 501(a) of the 470 Internal Revenue Code, a trust satisfying the requirements of 471 ss. 624.438 and 624.439, or any governmental trust as defined in 472 s. 624.33(3), and the trustees and employees acting pursuant to 473 such trust, or a custodian and its agents and employees, 474 including individuals representing the trustees in overseeing 475 the activities of a service company or administrator, acting 476 pursuant to a custodial account which meets the requirements of 477 s. 401(f) of the Internal Revenue Code. 478 (m) A financial institution which is subject to supervision 479 or examination by federal or state authorities or a mortgage 480 lender licensed under chapter 494 who collects and remits 481 premiums to licensed insurance agents or authorized insurers 482 concurrently or in connection with mortgage loan payments. 483 (n) A credit card issuing company which advances for and 484 collects premiums or charges from its credit card holders who 485 have authorized such collection if such company does not adjust 486 or settle claims. 487 (o) A person who adjusts or settles claims in the normal 488 course of such person’s practice or employment as an attorney at 489 law and who does not collect charges or premiums in connection 490 with life or health insurance coverage. 491 (p) A person approved by the department who administers 492 only self-insured workers’ compensation plans. 493 (q) A service company or service agent and its employees, 494 authorized in accordance with ss. 626.895-626.899, serving only 495 a single employer plan, multiple-employer welfare arrangements, 496 or a combination thereof. 497 (r) Any provider or group practice, as defined in s. 498 456.053, providing services under the scope of the license of 499 the provider or the member of the group practice. 500 (s) Any hospital providing billing, claims, and collection 501 services solely on its own and its physicians’ behalf and 502 providing services under the scope of its license. 503 (t) A corporation not for profit whose membership consists 504 entirely of local governmental units authorized to enter into 505 risk management consortiums under s. 112.08. 506 507 A person who provides billing and collection services to health 508 insurers and health maintenance organizations on behalf of 509 health care providers shall comply with the provisions of ss. 510 627.6131, 641.3155, and 641.51(4). 511 (6) “Pharmacy benefit manager” means a person or an entity 512 doing business in this state which contracts to administer 513 prescription drug benefits on behalf of a pharmacy benefits plan 514 or program as defined in s. 626.8825. The term includes, but is 515 not limited to, a person or an entity that performs one or more 516 of the following services on behalf of such plan or program: 517 (a) Pharmacy claims processing. 518 (b) Administration or management of a pharmacy discount 519 card program and performance of any other service listed in this 520 subsection. 521 (c) Managing pharmacy networks or pharmacy reimbursement. 522 (d) Paying or managing claims for pharmacist services 523 provided to covered persons. 524 (e) Developing or managing a clinical formulary, including 525 utilization management or quality assurance programs. 526 (f) Pharmacy rebate administration. 527 (g) Managing patient compliance, therapeutic intervention, 528 or generic substitution programs. 529 (h) Administration or management of a mail-order pharmacy 530 program. 531 Section 9. Present subsections (3) through (6) of section 532 626.8805, Florida Statutes, are redesignated as subsections (4) 533 through (7), respectively, a new subsection (3) and subsection 534 (8) are added to that section, and subsection (1) and present 535 subsection (3) of that section are amended, to read: 536 626.8805 Certificate of authority to act as administrator.— 537 (1) It is unlawful for any person to act as or hold himself 538 or herself out to be an administrator in this state without a 539 valid certificate of authority issued by the office pursuant to 540 ss. 626.88-626.894. A pharmacy benefit manager that is 541 registered with the office under s. 624.490 as of June 30, 2023, 542 may continue to operate until January 1, 2024, as an 543 administrator without a certificate of authority and is not in 544 violation of the requirement to possess a valid certificate of 545 authority as an administrator during that timeframe. To qualify 546 for and hold authority to act as an administrator in this state, 547 an administrator must otherwise be in compliance with this code 548 and with its organizational agreement. The failure of any 549 person, excluding a pharmacy benefit manager, to hold such a 550 certificate while acting as an administrator shall subject such 551 person to a fine of not less than $5,000 or more than $10,000 552 for each violation. A person who, on or after January 1, 2024, 553 does not hold a certificate of authority to act as an 554 administrator while operating as a pharmacy benefit manager is 555 subject to a fine of $10,000 per violation per day. By January 556 15, 2024, the office shall submit to the Governor, the President 557 of the Senate, and the Speaker of the House of Representatives a 558 report detailing whether each pharmacy benefit manager operating 559 in this state on January 1, 2024, obtained a certificate of 560 authority on or before that date as required by this section. 561 (3) An applicant that is a pharmacy benefit manager must 562 also submit all of the following: 563 (a) A complete biographical statement on forms prescribed 564 by the commission. 565 (b) An independent background report as prescribed by the 566 commission. 567 (c) A full set of fingerprints of all of the individuals 568 referenced in paragraph (2)(c) to the office or to a vendor, 569 entity, or agency authorized by s. 943.053(13). The office, 570 vendor, entity, or agency, as applicable, shall forward the 571 fingerprints to the Department of Law Enforcement for state 572 processing, and the Department of Law Enforcement shall forward 573 the fingerprints to the Federal Bureau of Investigation for 574 national processing in accordance with s. 943.053 and 28 C.F.R. 575 s. 20. 576 (d) A self-disclosure of any administrative, civil, or 577 criminal complaints, settlements, or discipline of the 578 applicant, or any of the applicant’s affiliates, which relate to 579 a violation of the insurance laws, including pharmacy benefit 580 manager laws, in any state. 581 (e) A statement attesting to compliance with the network 582 requirements in s. 626.8825 beginning January 1, 2024. 583 (4)(a)(3)The applicant shall make available for inspection 584 by the office copies of all contracts relating to services 585 provided by the administrator to insurers or other persons using 586 the services of the administrator. 587 (b) An applicant that is a pharmacy benefit manager shall 588 also make available for inspection by the office: 589 1. Copies of all contract templates with any pharmacy as 590 defined in s. 465.003; and 591 2. Copies of all subcontracts to support its operations. 592 (8) A pharmacy benefit manager is exempt from fees 593 associated with the initial application and the annual filing 594 fees in s. 626.89. 595 Section 10. Section 626.8814, Florida Statutes, is amended 596 to read: 597 626.8814 Disclosure of ownership or affiliation.— 598 (1) Each administrator shall identify to the office any 599 ownership interest or affiliation of any kind with any insurance 600 company responsible for providing benefits directly or through 601 reinsurance to any plan for which the administrator provides 602 administrative services. 603 (2) Pharmacy benefit managers shall also identify to the 604 office any ownership affiliation of any kind with any pharmacy 605 which, either directly or indirectly, through one or more 606 intermediaries: 607 (a) Has an investment or ownership interest in a pharmacy 608 benefit manager holding a certificate of authority issued under 609 this part; 610 (b) Shares common ownership with a pharmacy benefit manager 611 holding a certificate of authority issued under this part; or 612 (c) Has an investor or a holder of an ownership interest 613 which is a pharmacy benefit manager holding a certificate of 614 authority issued under this part. 615 (3) A pharmacy benefit manager shall report any change in 616 information required by subsection (2) to the office in writing 617 within 60 days after the change occurs. 618 Section 11. Section 626.8825, Florida Statutes, is created 619 to read: 620 626.8825 Pharmacy benefit manager transparency and 621 accountability.— 622 (1) DEFINITIONS.—As used in this section, the term: 623 (a) “Adjudication transaction fee” means a fee charged by 624 the pharmacy benefit manager to the pharmacy for electronic 625 claim submissions. 626 (b) “Affiliated pharmacy” means a pharmacy that, either 627 directly or indirectly through one or more intermediaries: 628 1. Has an investment or ownership interest in a pharmacy 629 benefit manager holding a certificate of authority issued under 630 this part; 631 2. Shares common ownership with a pharmacy benefit manager 632 holding a certificate of authority issued under this part; or 633 3. Has an investor or a holder of an ownership interest 634 which is a pharmacy benefit manager holding a certificate of 635 authority issued under this part. 636 (c) “Brand name or generic effective rate” means the 637 contractual rate set forth by a pharmacy benefit manager for the 638 reimbursement of covered brand name or generic drugs, calculated 639 using the total payments in the aggregate, by drug type, during 640 the performance period. The effective rates are typically 641 calculated as a discount from industry benchmarks, such as 642 average wholesale price or wholesale acquisition cost. 643 (d) “Covered person” means a person covered by, 644 participating in, or receiving the benefit of a pharmacy 645 benefits plan or program. 646 (e) “Direct and indirect remuneration fees” means price 647 concessions that are paid to the pharmacy benefit manager by the 648 pharmacy retrospectively and that cannot be calculated at the 649 point of sale. The term may also include discounts, chargebacks 650 or rebates, cash discounts, free goods contingent on a purchase 651 agreement, upfront payments, coupons, goods in kind, free or 652 reduced-price services, grants, or other price concessions or 653 similar benefits from manufacturers, pharmacies, or similar 654 entities. 655 (f) “Dispensing fee” means a fee intended to cover 656 reasonable costs associated with providing the drug to a covered 657 person. This cost includes the pharmacist’s services and the 658 overhead associated with maintaining the facility and equipment 659 necessary to operate the pharmacy. 660 (g) “Effective rate guarantee” means the minimum ingredient 661 cost reimbursement a pharmacy benefit manager guarantees it will 662 pay for pharmacist services during the applicable measurement 663 period. 664 (h) “Erroneous claims” means pharmacy claims submitted in 665 error, including, but not limited to, unintended, incorrect, 666 fraudulent, or test claims. 667 (i) “Group purchasing organization” means an entity 668 affiliated with a pharmacy benefit manager or a pharmacy 669 benefits plan or program which uses purchasing volume aggregates 670 as leverage to negotiate discounts and rebates for covered 671 prescription drugs with pharmaceutical manufacturers, 672 distributors, and wholesale vendors. 673 (j) “Incentive payment” means a retrospective monetary 674 payment made as a reward or recognition by the pharmacy benefits 675 plan or program or pharmacy benefit manager to a pharmacy for 676 meeting or exceeding predefined pharmacy performance metrics as 677 related to quality measures, such as Healthcare Effectiveness 678 Data and Information Set measures. 679 (k) “Maximum allowable cost appeal pricing adjustment” 680 means a retrospective positive payment adjustment made to a 681 pharmacy by the pharmacy benefits plan or program or by the 682 pharmacy benefit manager pursuant to an approved maximum 683 allowable cost appeal request submitted by the same pharmacy to 684 dispute the amount reimbursed for a drug based on the pharmacy 685 benefit manager’s listed maximum allowable cost price. 686 (l) “Monetary recoupments” means rescinded or recouped 687 payments from a pharmacy or provider by the pharmacy benefits 688 plan or program or by the pharmacy benefit manager. 689 (m) “Network” means a group of pharmacies that agree to 690 provide pharmacist services to covered persons on behalf of a 691 pharmacy benefits plan or program or a group of pharmacy 692 benefits plans or programs in exchange for payment for such 693 services. The term includes a pharmacy that generally dispenses 694 outpatient prescription drugs to covered persons. 695 (n) “Network reconciliation offsets” means a process during 696 annual payment reconciliation between a pharmacy benefit manager 697 and a pharmacy which allows the pharmacy benefit manager to 698 offset an amount for overperformance or underperformance of 699 contractual guarantees across guaranteed line items, channels, 700 networks, or payors, as applicable. 701 (o) “Participation contract” means any agreement between a 702 pharmacy benefit manager and pharmacy for the provision and 703 reimbursement of pharmacist services and any exhibits, 704 attachments, amendments, or addendums to such agreement. 705 (p) “Pass-through pricing model” means a payment model used 706 by a pharmacy benefit manager in which the payments made by the 707 pharmacy benefits plan or program to the pharmacy benefit 708 manager for the covered outpatient drugs are: 709 1. Equivalent to the payments the pharmacy benefit manager 710 makes to a dispensing pharmacy or provider for such drugs, 711 including any contracted professional dispensing fee between the 712 pharmacy benefit manager and its network of pharmacies. Such 713 dispensing fee would be paid if the pharmacy benefits plan or 714 program was making the payments directly. 715 2. Passed through in their entirety by the pharmacy 716 benefits plan or program or by the pharmacy benefit manager to 717 the pharmacy or provider that dispenses the drugs, and the 718 payments are made in a manner that is not offset by any 719 reconciliation. 720 (q) “Pharmacist” has the same meaning as in s. 465.003. 721 (r) “Pharmacist services” means products, goods, and 722 services or any combination of products, goods, and services 723 provided as part of the practice of the profession of pharmacy 724 as defined in s. 465.003 or otherwise covered by a pharmacy 725 benefits plan or program. 726 (s) “Pharmacy” has the same meaning as in s. 465.003. 727 (t) “Pharmacy benefit manager” has the same meaning as in 728 s. 626.88. 729 (u) “Pharmacy benefits plan or program” means a plan or 730 program that pays for, reimburses, covers the cost of, or 731 provides access to discounts on pharmacist services provided by 732 one or more pharmacies to covered persons who reside in, are 733 employed by, or receive pharmacist services from this state. 734 1. The term includes, but is not limited to, health 735 maintenance organizations, health insurers, self-insured 736 employer health plans, discount card programs, and government 737 funded health plans, including the Statewide Medicaid Managed 738 Care program established pursuant to part IV of chapter 409 and 739 the state group insurance program pursuant to part I of chapter 740 110. 741 2. The term excludes such a plan or program under chapter 742 440. 743 (v) “Rebate” means all payments that accrue to a pharmacy 744 benefit manager or its pharmacy benefits plan or program client 745 or an affiliated group purchasing organization, directly or 746 indirectly, from a pharmaceutical manufacturer, including, but 747 not limited to, discounts, administration fees, credits, 748 incentives, or penalties associated directly or indirectly in 749 any way with claims administered on behalf of a pharmacy 750 benefits plan or program client. 751 (w) “Spread pricing” is the practice in which a pharmacy 752 benefit manager charges a pharmacy benefits plan or program a 753 different amount for pharmacist services than the amount the 754 pharmacy benefit manager reimburses a pharmacy for such 755 pharmacist services. 756 (x) “Usual and customary price” means the amount charged to 757 cash customers for a pharmacist service exclusive of sales tax 758 or other amounts claimed. 759 (2) CONTRACTS BETWEEN A PHARMACY BENEFIT MANAGER AND A 760 PHARMACY BENEFITS PLAN OR PROGRAM.—In addition to any other 761 requirements in the Florida Insurance Code, all contractual 762 arrangements executed, amended, adjusted, or renewed on or after 763 July 1, 2023, which are applicable to pharmacy benefits covered 764 on or after January 1, 2024, between a pharmacy benefit manager 765 and a pharmacy benefits plan or program must include, in 766 substantial form, terms that ensure compliance with all of the 767 following requirements and that, except to the extent not 768 allowed by law, shall supersede any contractual terms to the 769 contrary: 770 (a) Use a pass-through pricing model, remaining consistent 771 with the prohibition in paragraph (3)(c). 772 (b) Exclude terms that allow for the direct or indirect 773 engagement in the practice of spread pricing unless the pharmacy 774 benefit manager passes along the entire amount of such 775 difference to the pharmacy benefits plan or program as allowable 776 under paragraph (a). 777 (c) Ensure that funds received in relation to providing 778 services for a pharmacy benefits plan or program or a pharmacy 779 are used or distributed only pursuant to the pharmacy benefit 780 manager’s contract with the pharmacy benefits plan or program or 781 with the pharmacy or as otherwise required by applicable law. 782 (d) Require the pharmacy benefit manager to pass 100 783 percent of all prescription drug manufacturer rebates, including 784 nonresident prescription drug manufacturer rebates, received to 785 the pharmacy benefits plan or program, if the contractual 786 arrangement delegates the negotiation of rebates to the pharmacy 787 benefit manager, for the sole purpose of offsetting defined cost 788 sharing and reducing premiums of covered persons. Any excess 789 rebate revenue after the pharmacy benefit manager and the 790 pharmacy benefits plan or program have taken all actions 791 required under this paragraph must be used for the sole purpose 792 of offsetting copayments and deductibles of covered persons. 793 This paragraph does not apply to contracts involving Medicaid 794 managed care plans. 795 (e) Include network adequacy requirements that meet or 796 exceed Medicare Part D program standards for convenient access 797 to the network pharmacies set forth in 42 C.F.R. s. 798 423.120(a)(1) and that: 799 1. Do not limit a network to solely include affiliated 800 pharmacies; 801 2. Require a pharmacy benefit manager to offer a provider 802 contract to licensed pharmacies physically located on the 803 physical site of providers that are: 804 a. Within the pharmacy benefits plan’s or program’s 805 geographic service area and that have been specifically 806 designated as essential providers by the Agency for Health Care 807 Administration pursuant to s. 409.975(1)(a); 808 b. Designated as cancer centers of excellence under s. 809 381.925, regardless of the pharmacy benefits plan’s or program’s 810 geographic service area; 811 c. Organ transplant hospitals, regardless of the pharmacy 812 benefits plan’s or program’s geographic service area; 813 d. Hospitals licensed as specialty children’s hospitals as 814 defined in s. 395.002; or 815 e. Regional perinatal intensive care centers as defined in 816 s. 383.16(2), regardless of the pharmacy benefits plan’s or 817 program’s geographic service area. 818 819 Such provider contracts must be solely for the administration or 820 dispensing of covered prescription drugs, including biological 821 products, which are administered through infusions, 822 intravenously injected, or inhaled during a surgical procedure 823 or are covered parenteral drugs, as part of onsite outpatient 824 care; 825 3. Do not require a covered person to receive a 826 prescription drug by United States mail, common carrier, local 827 courier, third-party company or delivery service, or pharmacy 828 direct delivery unless the prescription drug cannot be acquired 829 at any retail pharmacy in the pharmacy benefit manager’s network 830 for the covered person’s pharmacy benefits plan or program. This 831 subparagraph does not prohibit a pharmacy benefit manager from 832 operating mail order or delivery programs on an opt-in basis at 833 the sole discretion of a covered person, provided that the 834 covered person is not penalized through the imposition of any 835 additional retail cost-sharing obligations or a lower allowed 836 quantity limit for choosing not to select the mail order or 837 delivery programs; 838 4. For the in-person administration of covered prescription 839 drugs, prohibit requiring a covered person to receive pharmacist 840 services from an affiliated pharmacy or an affiliated health 841 care provider; and 842 5. Prohibit offering or implementing pharmacy networks that 843 require or provide a promotional item or an incentive, defined 844 as anything other than a reduced cost-sharing amount or enhanced 845 quantity limit allowed under the benefit design for a covered 846 drug, to a covered person to use an affiliated pharmacy or an 847 affiliated health care provider for the in-person administration 848 of covered prescription drugs; or advertising, marketing, or 849 promoting an affiliated pharmacy to covered persons. Subject to 850 the foregoing, a pharmacy benefit manager may include an 851 affiliated pharmacy in communications to covered persons 852 regarding network pharmacies and prices, provided that the 853 pharmacy benefit manager includes information, such as links to 854 all nonaffiliated network pharmacies, in such communications and 855 that the information provided is accurate and of equal 856 prominence. This subparagraph may not be construed to prohibit a 857 pharmacy benefit manager from entering into an agreement with an 858 affiliated pharmacy to provide pharmacist services to covered 859 persons. 860 (f) Prohibit the ability of a pharmacy benefit manager to 861 condition participation in one pharmacy network on participation 862 in any other pharmacy network or penalize a pharmacy for 863 exercising its prerogative not to participate in a specific 864 pharmacy network. 865 (g) Prohibit a pharmacy benefit manager from instituting a 866 network that requires a pharmacy to meet accreditation standards 867 inconsistent with or more stringent than applicable federal and 868 state requirements for licensure and operation as a pharmacy in 869 this state. However, a pharmacy benefit manager may specify 870 additional specialty networks that require enhanced standards 871 related to the safety and competency necessary to meet the 872 United States Food and Drug Administration’s limited 873 distribution requirements for dispensing any drug that, on a 874 drug-by-drug basis, requires extraordinary special handling, 875 provider coordination, or clinical care or monitoring when such 876 extraordinary requirements cannot be met by a retail pharmacy. 877 For purposes of this paragraph, drugs requiring extraordinary 878 special handling are limited to drugs that are subject to a risk 879 evaluation and mitigation strategy approved by the United States 880 Food and Drug Administration and that: 881 1. Require special certification of a health care provider 882 to prescribe, receive, dispense, or administer; or 883 2. Require special handling due to the molecular complexity 884 or cytotoxic properties of the biologic or biosimilar product or 885 drug. 886 887 For participation in a specialty network, a pharmacy benefit 888 manager may not require a pharmacy to meet requirements for 889 participation beyond those necessary to demonstrate the 890 pharmacy’s ability to dispense the drug in accordance with the 891 United States Food and Drug Administration’s approved 892 manufacturer labeling. 893 (h)1. At a minimum, require the pharmacy benefit manager or 894 pharmacy benefits plan or program to, upon revising its 895 formulary of covered prescription drugs during a plan year, 896 provide a 60-day continuity-of-care period in which the covered 897 prescription drug that is being revised from the formulary 898 continues to be provided at the same cost for the patient for a 899 period of 60 days. The 60-day continuity-of-care period 900 commences upon notification to the patient. This requirement 901 does not apply if the covered prescription drug: 902 a. Has been approved and made available over the counter by 903 the United States Food and Drug Administration and has entered 904 the commercial market as such; 905 b. Has been removed or withdrawn from the commercial market 906 by the manufacturer; or 907 c. Is subject to an involuntary recall by state or federal 908 authorities and is no longer available on the commercial market. 909 2. Beginning January 1, 2024, and annually thereafter, the 910 pharmacy benefits plan or program shall submit to the office, 911 under the penalty of perjury, a statement attesting to its 912 compliance with the requirements of this subsection. 913 (3) CONTRACTS BETWEEN A PHARMACY BENEFIT MANAGER AND A 914 PARTICIPATING PHARMACY.—In addition to other requirements in the 915 Florida Insurance Code, a participation contract executed, 916 amended, adjusted, or renewed on or after July 1, 2023, that 917 applies to pharmacist services on or after January 1, 2024, 918 between a pharmacy benefit manager and one or more pharmacies or 919 pharmacists, must include, in substantial form, terms that 920 ensure compliance with all of the following requirements, and 921 that, except to the extent not allowed by law, shall supersede 922 any contractual terms in the participation contract to the 923 contrary: 924 (a) At the time of adjudication for electronic claims or 925 the time of reimbursement for nonelectronic claims, the pharmacy 926 benefit manager shall provide the pharmacy with a remittance, 927 including such detailed information as is necessary for the 928 pharmacy or pharmacist to identify the reimbursement schedule 929 for the specific network applicable to the claim and which is 930 the basis used by the pharmacy benefit manager to calculate the 931 amount of reimbursement paid. This information must include, but 932 is not limited to, the applicable network reimbursement ID or 933 plan ID as defined in the most current version of the National 934 Council for Prescription Drug Programs (NCPDP) Telecommunication 935 Standard Implementation Guide, or its nationally recognized 936 successor industry guide. The commission shall adopt rules to 937 implement this paragraph. 938 (b) The pharmacy benefit manager must ensure that any basis 939 of reimbursement information is communicated to a pharmacy in 940 accordance with the NCPDP Telecommunication Standard 941 Implementation Guide, or its nationally recognized successor 942 industry guide, when performing reconciliation for any effective 943 rate guarantee, and that such basis of reimbursement information 944 communicated is accurate, corresponds with the applicable 945 network rate, and may be relied upon by the pharmacy. 946 (c) A prohibition of financial clawbacks, reconciliation 947 offsets, or offsets to adjudicated claims. A pharmacy benefit 948 manager may not charge, withhold, or recoup direct or indirect 949 remuneration fees, dispensing fees, brand name or generic 950 effective rate adjustments through reconciliation, or any other 951 monetary charge, withholding, or recoupments as related to 952 discounts, multiple network reconciliation offsets, adjudication 953 transaction fees, and any other instance when a fee may be 954 recouped from a pharmacy. This prohibition does not apply to: 955 1. Any incentive payments provided by the pharmacy benefit 956 manager to a network pharmacy for meeting or exceeding 957 predefined quality measures, such as Healthcare Effectiveness 958 Data and Information Set measures; recoupment due to an 959 erroneous claim, fraud, waste, or abuse; a claim adjudicated in 960 error; a maximum allowable cost appeal pricing adjustment; or an 961 adjustment made as part of a pharmacy audit pursuant to s. 962 624.491. 963 2. Any recoupment that is returned to the state for 964 programs in chapter 409 or the state group insurance program in 965 s. 110.123. 966 (d) A pharmacy benefit manager may not unilaterally change 967 the terms of any participation contract. 968 (e) Unless otherwise prohibited by law, a pharmacy benefit 969 manager may not prohibit a pharmacy or pharmacist from: 970 1. Offering mail or delivery services on an opt-in basis at 971 the sole discretion of the covered person. 972 2. Mailing or delivering a prescription drug to a covered 973 person upon his or her request. 974 3. Charging a shipping or handling fee to a covered person 975 requesting a prescription drug be mailed or delivered if the 976 pharmacy or pharmacist discloses to the covered person before 977 the mailing or delivery the amount of the fee that will be 978 charged and that the fee may not be reimbursable by the covered 979 person’s pharmacy benefits plan or program. 980 (f) The pharmacy benefit manager must provide a pharmacy, 981 upon its request, a list of pharmacy benefits plans or programs 982 in which the pharmacy is a part of the network. Updates to the 983 list must be communicated to the pharmacy within 7 days. The 984 pharmacy benefit manager may not restrict the pharmacy or 985 pharmacist from disclosing this information to the public. 986 (g) The pharmacy benefit manager must ensure that the 987 Electronic Remittance Advice contains claim level payment 988 adjustments in accordance with the American National Standards 989 Institute Accredited Standards Committee, X12 format, and 990 includes or is accompanied by the appropriate level of detail 991 for the pharmacy to reconcile any debits or credits, including, 992 but not limited to, pharmacy NCPDP or NPI identifier, date of 993 service, prescription number, refill number, adjustment code, if 994 applicable, and transaction amount. 995 (h) The pharmacy benefit manager shall provide a reasonable 996 administrative appeal procedure to allow a pharmacy or 997 pharmacist to challenge the maximum allowable cost pricing 998 information and the reimbursement made under the maximum 999 allowable cost as defined in s. 627.64741 for a specific drug as 1000 being below the acquisition cost available to the challenging 1001 pharmacy or pharmacist. 1002 1. The administrative appeal procedure must include a 1003 telephone number and e-mail address, or a website, for the 1004 purpose of submitting the administrative appeal. The appeal may 1005 be submitted by the pharmacy or an agent of the pharmacy 1006 directly to the pharmacy benefit manager or through a pharmacy 1007 service administration organization. The pharmacy or pharmacist 1008 must be given at least 30 business days after a maximum 1009 allowable cost update or after an adjudication for an electronic 1010 claim or reimbursement for a nonelectronic claim to file the 1011 administrative appeal. 1012 2. The pharmacy benefit manager must respond to the 1013 administrative appeal within 30 business days after receipt of 1014 the appeal. 1015 3. If the appeal is upheld, the pharmacy benefit manager 1016 must: 1017 a. Update the maximum allowable cost pricing information to 1018 at least the acquisition cost available to the pharmacy; 1019 b. Permit the pharmacy or pharmacist to reverse and rebill 1020 the claim in question; 1021 c. Provide to the pharmacy or pharmacist the national drug 1022 code on which the increase or change is based; and 1023 d. Make the increase or change effective for each similarly 1024 situated pharmacy or pharmacist who is subject to the applicable 1025 maximum allowable cost pricing information. 1026 4. If the appeal is denied, the pharmacy benefit manager 1027 must provide to the pharmacy or pharmacist the national drug 1028 code and the name of the national or regional pharmaceutical 1029 wholesalers operating in this state which have the drug 1030 currently in stock at a price below the maximum allowable cost 1031 pricing information. 1032 5. Every 90 days, a pharmacy benefit manager shall report 1033 to the office the total number of appeals received and denied in 1034 the preceding 90-day period, with an explanation or reason for 1035 each denial, for each specific drug for which an appeal was 1036 submitted pursuant to this paragraph. 1037 Section 12. Section 626.8827, Florida Statutes, is created 1038 to read: 1039 626.8827 Pharmacy benefit manager prohibited practices.—In 1040 addition to other prohibitions in this part, a pharmacy benefit 1041 manager may not do any of the following: 1042 (1) Prohibit, restrict, or penalize in any way a pharmacy 1043 or pharmacist from disclosing to any person any information that 1044 the pharmacy or pharmacist deems appropriate, including, but not 1045 limited to, information regarding any of the following: 1046 (a) The nature of treatment, risks, or alternatives 1047 thereto. 1048 (b) The availability of alternate treatment, consultations, 1049 or tests. 1050 (c) The decision of utilization reviewers or similar 1051 persons to authorize or deny pharmacist services. 1052 (d) The process used to authorize or deny pharmacist 1053 services or benefits. 1054 (e) Information on financial incentives and structures used 1055 by the pharmacy benefits plan or program. 1056 (f) Information that may reduce the costs of pharmacist 1057 services. 1058 (g) Whether the cost-sharing obligation exceeds the retail 1059 price for a covered prescription drug and the availability of a 1060 more affordable alternative drug, pursuant to s. 465.0244. 1061 (2) Prohibit, restrict, or penalize in any way a pharmacy 1062 or pharmacist from disclosing information to the office, the 1063 Agency for Health Care Administration, Department of Management 1064 Services, law enforcement, or state and federal governmental 1065 officials, provided that the recipient of the information 1066 represents it has the authority, to the extent provided by state 1067 or federal law, to maintain proprietary information as 1068 confidential; and before disclosure of information designated as 1069 confidential, the pharmacist or pharmacy marks as confidential 1070 any document in which the information appears or requests 1071 confidential treatment for any oral communication of the 1072 information. 1073 (3) Communicate at the point-of-sale, or otherwise require, 1074 a cost-sharing obligation for the covered person in an amount 1075 that exceeds the lesser of: 1076 (a) The applicable cost-sharing amount under the applicable 1077 pharmacy benefits plan or program; or 1078 (b) The usual and customary price, as defined in s. 1079 626.8825, of the pharmacist services. 1080 (4) Transfer or share records relative to prescription 1081 information containing patient-identifiable or prescriber 1082 identifiable data to an affiliated pharmacy for any commercial 1083 purpose other than the limited purposes of facilitating pharmacy 1084 reimbursement, formulary compliance, or utilization review on 1085 behalf of the applicable pharmacy benefits plan or program. 1086 (5) Fail to make any payment due to a pharmacy for an 1087 adjudicated claim with a date of service before the effective 1088 date of a pharmacy’s termination from a pharmacy benefit network 1089 unless payments are withheld because of fraud on the part of the 1090 pharmacy or except as otherwise required by law. 1091 (6) Terminate the contract of, penalize, or disadvantage a 1092 pharmacist or pharmacy due to a pharmacist or pharmacy: 1093 (a) Disclosing information about pharmacy benefit manager 1094 practices in accordance with this act; 1095 (b) Exercising any of its prerogatives under this part; or 1096 (c) Sharing any portion, or all, of the pharmacy benefit 1097 manager contract with the office pursuant to a complaint or a 1098 query regarding whether the contract is in compliance with this 1099 act. 1100 (7) Fail to comply with the requirements in s. 626.8825 or 1101 s. 624.491. 1102 Section 13. Section 626.8828, Florida Statutes, is created 1103 to read: 1104 626.8828 Investigations and examinations of pharmacy 1105 benefit managers; expenses; penalties.— 1106 (1) The office may investigate administrators who are 1107 pharmacy benefit managers and applicants for authorization as 1108 provided in ss. 624.307 and 624.317. The office shall review any 1109 referral made pursuant to s. 624.307(10) and shall investigate 1110 any referral that, as determined by the Commissioner of 1111 Insurance Regulation or his or her designee, reasonably 1112 indicates a possible violation of this part. 1113 (2)(a) The office shall examine the business and affairs of 1114 each pharmacy benefit manager at least biennially. The biennial 1115 examination of each pharmacy benefit manager must be a 1116 systematic review for the purpose of determining the pharmacy 1117 benefit manager’s compliance with all provisions of this part 1118 and all other laws or rules applicable to pharmacy benefit 1119 managers and must include a detailed review of the pharmacy 1120 benefit manager’s compliance with ss. 626.8825 and 626.8827. The 1121 first 2-year cycle for conducting biennial reviews begins 1122 January 1, 2025. By January 15, 2026, and each January 15 1123 thereafter, the office shall submit to the Governor, the 1124 President of the Senate, and the Speaker of the House of 1125 Representatives a report summarizing the results of the prior 1126 year’s examinations which includes detailed descriptions of any 1127 violations committed by each pharmacy benefit manager and 1128 detailed reporting of actions taken by the office against each 1129 pharmacy benefit manager for such violations. Beginning with the 1130 2027 report, and every 2 years thereafter, the report must 1131 document the office’s compliance with the examination timeframe 1132 requirements as provided in this paragraph. The office must 1133 specify the number and percentage of all examination completed 1134 within the timeframe. 1135 (b) The office also may conduct additional examinations as 1136 often as it deems advisable or necessary for the purpose of 1137 ascertaining compliance with this part and any other laws or 1138 rules applicable to pharmacy benefit managers or applicants for 1139 authorization. 1140 (c) If a referral made pursuant to s. 624.307(10) 1141 reasonably indicates a pattern or practice of violations of this 1142 part by a pharmacy benefit manager, the office must begin an 1143 examination of the pharmacy benefit manager or include findings 1144 related to such referral within an ongoing examination. 1145 (d) Based on the findings of an examination that a pharmacy 1146 benefit manager or an applicant for authorization has exhibited 1147 a pattern or practice of knowing and willful violations of s. 1148 626.8825 or s. 626.8827, the office may, pursuant to chapter 1149 120, order a pharmacy benefit manager to file all contracts 1150 between the pharmacy benefit manager and pharmacies or pharmacy 1151 benefits plans or programs and any policies, guidelines, rules, 1152 protocols, standard operating procedures, instructions, or 1153 directives that govern or guide the manner in which the pharmacy 1154 benefit manager or applicant conducts business related to such 1155 knowing and willful violations for review and inspection for the 1156 following 36-month period. Such documents are public records and 1157 are not trade secrets or otherwise exempt from s. 119.07(1). As 1158 used in this section, the term: 1159 1. “Contracts” means any contract to which s. 626.8825 is 1160 applicable. 1161 2. “Knowing and willful” means any act of commission or 1162 omission which is committed intentionally, as opposed to 1163 accidentally, and which is committed with knowledge of the act’s 1164 unlawfulness or with reckless disregard as to the unlawfulness 1165 of the act. 1166 (e) Examinations may be conducted by an independent 1167 professional examiner under contract to the office, in which 1168 case payment must be made directly to the contracted examiner by 1169 the pharmacy benefit manager examined in accordance with the 1170 rates and terms agreed to by the office and the examiner. The 1171 commission shall adopt rules providing for the types of 1172 independent professional examiners who may conduct examinations 1173 under this section, which types must include, but need not be 1174 limited to, independent certified public accountants, actuaries, 1175 investment specialists, information technology specialists, or 1176 others meeting criteria specified by commission rule. The rules 1177 must also require that: 1178 1. The rates charged to the pharmacy benefit manager being 1179 examined are consistent with rates charged by other firms in a 1180 similar profession and are comparable with the rates charged for 1181 comparable examinations. 1182 2. The firm selected by the office to perform the 1183 examination has no conflicts of interest which might affect its 1184 ability to independently perform its responsibilities for the 1185 examination. 1186 (3) In making investigations and examinations of pharmacy 1187 benefit managers and applicants for authorization, the office 1188 and such pharmacy benefit manager are subject to all of the 1189 following provisions: 1190 (a) Section 624.318, as to the conduct of examinations. 1191 (b) Section 624.319, as to examination and investigation 1192 reports. 1193 (c) Section 624.321, as to witnesses and evidence. 1194 (d) Section 624.322, as to compelled testimony. 1195 (e) Section 624.324, as to hearings. 1196 (f) Any other provision of chapter 624 applicable to the 1197 investigation or examination of a licensee under this part. 1198 (4)(a) A pharmacy benefit manager must maintain an accurate 1199 record of all contracts and records with all pharmacies and 1200 pharmacy benefits plans or programs for the duration of the 1201 contract, and for 5 years thereafter. Such contracts must be 1202 made available to the office and kept in a form accessible to 1203 the office. 1204 (b) The office may order any pharmacy benefit manager or 1205 applicant to produce any records, books, files, contracts, 1206 advertising and solicitation materials, or other information and 1207 may take statements under oath to determine whether the pharmacy 1208 benefit manager or applicant is in violation of the law or is 1209 acting contrary to the public interest. 1210 (5)(a) Notwithstanding s. 624.307(3), each pharmacy benefit 1211 manager and applicant for authorization must pay to the office 1212 the expenses of the examination or investigation. Such expenses 1213 include actual travel expenses, a reasonable living expense 1214 allowance, compensation of the examiner, investigator, or other 1215 person making the examination or investigation, and necessary 1216 costs of the office directly related to the examination or 1217 investigation. Such travel expenses and living expense 1218 allowances are limited to those expenses necessarily incurred on 1219 account of the examination or investigation and shall be paid by 1220 the examined pharmacy benefit manager or applicant together with 1221 compensation upon presentation by the office to such pharmacy 1222 benefit manager or applicant of such charges and expenses after 1223 a detailed statement has been filed by the examiner and approved 1224 by the office. 1225 (b) All moneys collected from pharmacy benefit managers and 1226 applicants for authorization pursuant to this subsection shall 1227 be deposited into the Insurance Regulatory Trust Fund, and the 1228 office may make deposits from time to time into such fund from 1229 moneys appropriated for the operation of the office. 1230 (c) Notwithstanding s. 112.061, the office may pay to the 1231 examiner, investigator, or person making such examination or 1232 investigation out of such trust fund the actual travel expenses, 1233 reasonable living expense allowance, and compensation in 1234 accordance with the statement filed with the office by the 1235 examiner, investigator, or other person, as provided in 1236 paragraph (a). 1237 (6) In addition to any other enforcement authority 1238 available to the office, the office shall impose an 1239 administrative fine of $5,000 for each violation of s. 626.8825 1240 or s. 626.8827. Each instance of a violation of such sections by 1241 a pharmacy benefit manager against each individual pharmacy or 1242 prescription benefits plan or program constitutes a separate 1243 violation. Notwithstanding any other provision of law, there is 1244 no limitation on aggregate fines issued pursuant to this 1245 section. The proceeds from any administrative fine shall be 1246 deposited into the General Revenue Fund. 1247 (7) Failure by a pharmacy benefit manager to pay expenses 1248 incurred or administrative fines imposed under this section is 1249 grounds for the denial, suspension, or revocation of its 1250 certificate of authority. 1251 Section 14. Section 626.89, Florida Statutes, is amended to 1252 read: 1253 626.89 Annual financial statement and filing fee; notice of 1254 change of ownership; pharmacy benefit manager filings.— 1255 (1) Each authorized administrator shall annually file with 1256 the office a full and true statement of its financial condition, 1257 transactions, and affairs within 3 months after the end of the 1258 administrator’s fiscal year or within such extension of time as 1259 the office for good cause may have granted. The statement must 1260 be for the preceding fiscal year and must be in such form and 1261 contain such matters as the commission prescribes and must be 1262 verified by at least two officers of the administrator. 1263 (2) Each authorized administrator shall also file an 1264 audited financial statement performed by an independent 1265 certified public accountant. The audited financial statement 1266 mustshallbe filed with the office within 5 months after the 1267 end of the administrator’s fiscal year and be for the preceding 1268 fiscal year. An audited financial statement prepared on a 1269 consolidated basis must include a columnar consolidating or 1270 combining worksheet that must be filed with the statement and 1271 must comply with the following: 1272 (a) Amounts shown on the consolidated audited financial 1273 statement must be shown on the worksheet; 1274 (b) Amounts for each entity must be stated separately; and 1275 (c) Explanations of consolidating and eliminating entries 1276 must be included. 1277 (3) At the time of filing its annual statement, the 1278 administrator shall pay a filing fee in the amount specified in 1279 s. 624.501 for the filing of an annual statement by an insurer. 1280 (4) In addition, the administrator shall immediately notify 1281 the office of any material change in its ownership. 1282 (5) A pharmacy benefit manager shall also notify the office 1283 within 30 days after any administrative, civil, or criminal 1284 complaints, settlements, or discipline of the pharmacy benefit 1285 manager or any of its affiliates which relate to a violation of 1286 the insurance laws, including pharmacy benefit laws in any 1287 state. 1288 (6) A pharmacy benefit manager shall also annually submit 1289 to the office a statement attesting to its compliance with the 1290 network requirements of s. 626.8825. 1291 (7) The commission may by rule require all or part of the 1292 statements or filings required under this section to be 1293 submitted by electronic means in a computer-readable form 1294 compatible with the electronic data format specified by the 1295 commission. 1296 Section 15. Subsection (5) is added to section 627.42393, 1297 Florida Statutes, to read: 1298 627.42393 Step-therapy protocol.— 1299 (5) This section applies to a pharmacy benefit manager 1300 acting on behalf of a health insurer. 1301 Section 16. Subsections (2), (3), and (4) of section 1302 627.64741, Florida Statutes, are amended to read: 1303 627.64741 Pharmacy benefit manager contracts.— 1304 (2) In addition to the requirements of part VII of chapter 1305 626, a contract between a health insurer and a pharmacy benefit 1306 manager must require that the pharmacy benefit manager: 1307 (a) Update maximum allowable cost pricing information at 1308 least every 7 calendar days. 1309 (b) Maintain a process that will, in a timely manner, 1310 eliminate drugs from maximum allowable cost lists or modify drug 1311 prices to remain consistent with changes in pricing data used in 1312 formulating maximum allowable cost prices and product 1313 availability. 1314(3) A contract between a health insurer and a pharmacy1315benefit manager must prohibit the pharmacy benefit manager from1316limiting a pharmacist’s ability to disclose whether the cost1317sharing obligation exceeds the retail price for a covered1318prescription drug, and the availability of a more affordable1319alternative drug, pursuant to s. 465.0244.1320(4) A contract between a health insurer and a pharmacy1321benefit manager must prohibit the pharmacy benefit manager from1322requiring an insured to make a payment for a prescription drug1323at the point of sale in an amount that exceeds the lesser of:1324(a) The applicable cost-sharing amount; or1325(b) The retail price of the drug in the absence of1326prescription drug coverage.1327 Section 17. Subsections (2), (3), and (4) of section 1328 627.6572, Florida Statutes, are amended to read: 1329 627.6572 Pharmacy benefit manager contracts.— 1330 (2) In addition to the requirements of part VII of chapter 1331 626, a contract between a health insurer and a pharmacy benefit 1332 manager must require that the pharmacy benefit manager: 1333 (a) Update maximum allowable cost pricing information at 1334 least every 7 calendar days. 1335 (b) Maintain a process that will, in a timely manner, 1336 eliminate drugs from maximum allowable cost lists or modify drug 1337 prices to remain consistent with changes in pricing data used in 1338 formulating maximum allowable cost prices and product 1339 availability. 1340(3) A contract between a health insurer and a pharmacy1341benefit manager must prohibit the pharmacy benefit manager from1342limiting a pharmacist’s ability to disclose whether the cost1343sharing obligation exceeds the retail price for a covered1344prescription drug, and the availability of a more affordable1345alternative drug, pursuant to s. 465.0244.1346(4) A contract between a health insurer and a pharmacy1347benefit manager must prohibit the pharmacy benefit manager from1348requiring an insured to make a payment for a prescription drug1349at the point of sale in an amount that exceeds the lesser of:1350(a) The applicable cost-sharing amount; or1351(b) The retail price of the drug in the absence of1352prescription drug coverage.1353 Section 18. Paragraph (e) is added to subsection (46) of 1354 section 641.31, Florida Statutes, to read: 1355 641.31 Health maintenance contracts.— 1356 (46) 1357 (e) This subsection applies to a pharmacy benefit manager 1358 acting on behalf of a health maintenance organization. 1359 Section 19. Subsections (2), (3), and (4) of section 1360 641.314, Florida Statutes, are amended to read: 1361 641.314 Pharmacy benefit manager contracts.— 1362 (2) In addition to the requirements of part VII of chapter 1363 626, a contract between a health maintenance organization and a 1364 pharmacy benefit manager must require that the pharmacy benefit 1365 manager: 1366 (a) Update maximum allowable cost pricing information at 1367 least every 7 calendar days. 1368 (b) Maintain a process that will, in a timely manner, 1369 eliminate drugs from maximum allowable cost lists or modify drug 1370 prices to remain consistent with changes in pricing data used in 1371 formulating maximum allowable cost prices and product 1372 availability. 1373(3) A contract between a health maintenance organization1374and a pharmacy benefit manager must prohibit the pharmacy1375benefit manager from limiting a pharmacist’s ability to disclose1376whether the cost-sharing obligation exceeds the retail price for1377a covered prescription drug, and the availability of a more1378affordable alternative drug, pursuant to s. 465.0244.1379(4) A contract between a health maintenance organization1380and a pharmacy benefit manager must prohibit the pharmacy1381benefit manager from requiring a subscriber to make a payment1382for a prescription drug at the point of sale in an amount that1383exceeds the lesser of:1384(a) The applicable cost-sharing amount; or1385(b) The retail price of the drug in the absence of1386prescription drug coverage.1387 Section 20. (1) This act establishes requirements for 1388 pharmacy benefit managers as defined in s. 626.88, Florida 1389 Statutes, including, without limitation, pharmacy benefit 1390 managers in their performance of services for or otherwise on 1391 behalf of a pharmacy benefits plan or program as defined in s. 1392 626.8825, Florida Statutes, which includes coverage pursuant to 1393 Titles XVIII, XIX, or XXI of the Social Security Act, 42 U.S.C. 1394 ss. 1395 et seq., 1396 et seq., and 1397aa et seq., known as 1395 Medicare, Medicaid, or any other similar coverage under a state 1396 or Federal Government funded health plan, including the 1397 Statewide Medicaid Managed Care program established pursuant to 1398 part IV of chapter 409, Florida Statutes, and the state group 1399 insurance program pursuant to part I of chapter 110, Florida 1400 Statutes. 1401 (2) This act is not intended, nor may it be construed, to 1402 conflict with existing, relevant federal law. 1403 (3) If any provision of this act or its application to any 1404 person or circumstances is held invalid, the invalidity does not 1405 affect other provisions or applications of this act which can be 1406 given effect without the invalid provision or application, and 1407 to this end the provisions of this act are severable. 1408 Section 21. For the 2023-2024 fiscal year, the sum of 1409 $980,705 in recurring funds and $146,820 in nonrecurring funds 1410 from the Insurance Regulatory Trust Fund are appropriated to the 1411 Office of Insurance Regulation, and 10 full-time equivalent 1412 positions with associated salary rate of 644,877 are authorized, 1413 for the purpose of implementing this act. 1414 Section 22. This act shall take effect July 1, 2023.