Bill Text: NH SB226 | 2019 | Regular Session | Amended


Bill Title: Relative to registration of pharmacy benefit managers, and reestablishing the commission to study greater transparency in pharmaceutical costs and drug rebate programs.

Spectrum: Partisan Bill (Democrat 4-0)

Status: (Engrossed) 2019-05-08 - Executive Session: 05/21/2019 11:00 am Legislative Office Building 302 [SB226 Detail]

Download: New_Hampshire-2019-SB226-Amended.html

SB 226-FN - AS AMENDED BY THE SENATE

 

03/14/2019   0871s

2019 SESSION

19-1095

01/10

 

SENATE BILL 226-FN

 

AN ACT relative to registration of pharmacy benefit managers, and reestablishing the commission to study greater transparency in pharmaceutical costs and drug rebate programs.

 

SPONSORS: Sen. Soucy, Dist 18; Sen. Hennessey, Dist 5; Sen. Levesque, Dist 12; Sen. Rosenwald, Dist 13

 

COMMITTEE: Executive Departments and Administration

 

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ANALYSIS

 

This bill establishes the registration and regulation of pharmacy benefits managers by the insurance commissioner.  This bill also reestablishes the commission to study greater transparency in pharmaceutical costs and drug rebate programs.

 

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Explanation: Matter added to current law appears in bold italics.

Matter removed from current law appears [in brackets and struckthrough.]

Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

03/14/2019   0871s 19-1095

01/10

 

STATE OF NEW HAMPSHIRE

 

In the Year of Our Lord Two Thousand Nineteen

 

AN ACT relative to registration of pharmacy benefit managers, and reestablishing the commission to study greater transparency in pharmaceutical costs and drug rebate programs.

 

Be it Enacted by the Senate and House of Representatives in General Court convened:

 

1  Short Title.  Sections 2-4 of this act shall be known as and may be cited as the New Hampshire pharmacy benefits manager registration and regulation act.

2  New Chapter; Pharmacy Benefits Managers.  Amend RSA by inserting after chapter 402-M the following new chapter:

CHAPTER 402-N

PHARMACY BENEFITS MANAGERS

402-N:1  Definitions.  In this chapter:

I.  "Claims processing services" means the administrative services performed in connection with the processing and adjudicating of claims relating to pharmacist

services that include:

(a)  Receiving payments for pharmacist services.

(b)  Making payments to pharmacists or pharmacies for pharmacist services.

II.  "Commissioner" means the commissioner of the insurance department.

III.  "Pharmacist" means an individual licensed as a pharmacist by the pharmacy board.

IV.  "Pharmacist services" means products, goods, and services, or any combination of products, goods, and services, provided as a part of the practice of pharmacy.

V.  "Pharmacy" means the place licensed by the pharmacy board in which drugs, chemicals, medicines, prescriptions, and poisons are compounded, dispensed, or sold at retail.

VI.(a)  "Pharmacy benefits manager" means a person, business, or entity, including a wholly or partially owned or controlled subsidiary of a pharmacy benefits manager, that provides claims processing services or other prescription drug or device services, or both, for health benefit plans.

(b)  "Pharmacy benefits manager" shall not include any:

(1)  Health care facility licensed in this state;

(2)  Health care professional licensed in this state;

(3) Consultant who only provides advice as to the selection or performance of a pharmacy benefits manager; or

(4)  Service provided to the Centers for Medicare and Medicaid Services.

402-N:2  Registration to do Business; Rulemaking; Penalties.

I.  A person or organization shall not establish or operate as a pharmacy benefits manager in this state for health benefit plans without registering with the insurance commissioner under this chapter.

II.(a)  The commissioner shall adopt rules pursuant to RSA 541-A to:

(1)  Prescribe the application for registration as a pharmacy benefits manager and shall charge application fees and renewal fees not to exceed $500 as established in rules.

(2)  Establish registration fees, financial standards, and annual reporting requirements of pharmacy benefits managers.

(3)  Add to the existing consumer complaint form and provide information in the department's consumer resource section.

(b)  In establishing rules pursuant to subparagraph (a)(1) and (2), the commissioner may request:

(1)  A copy of the registrant's corporate charter, articles of incorporation, or other formation documents.

(2)  Name and address of the registrant and person designated to address consumer complaints.

(3)  Rebates to the client.

(4)  Discounts offered directly to the consumer.

(5)  Lists of health benefit plans administered by a pharmacy benefits manager in this state.

III.  If the commissioner finds after notice and hearing that any person has violated any provision of this chapter, or rules adopted pursuant to this chapter, the commissioner may order:

(a)  For each separate violation, a penalty in an amount of $2,500.

(b)  Revocation or suspension of the pharmacy benefits manager registration.

402-N:3  Provider Contract Standards for Pharmacy Benefit Managers.

I.  All contracts between a carrier or pharmacy benefit manager and a contracted pharmacy shall include:

(a)  The sources used by the pharmacy benefit manager to calculate the drug product reimbursement paid for covered drugs available under the pharmacy health benefit plan administered by the carrier or pharmacy benefit manager.

(b) A process to appeal, investigate, and resolve disputes regarding the maximum allowable cost pricing.  The process shall include the following provisions:

(1)  A provision granting the contracted pharmacy or pharmacist at least 30 business days following the initial claim to file an appeal;

(2)  A provision requiring the carrier or pharmacy benefit manager to investigate and resolve the appeal within 30 business days;

(3)  A provision requiring that, if the appeal is denied, the carrier or pharmacy benefit manager shall:

(A)  Provide the reason for the denial; and

(B) Identify the national drug code of a drug product that may be purchased by contracted pharmacies at a price at or below the maximum allowable cost; and

(4)  A provision requiring that, if an appeal is granted, the carrier or pharmacy benefits manager shall within 30 business days after granting the appeal:

(A)  Make the change in the maximum allowable cost; and

(B)  Permit the challenging pharmacy or pharmacist to reverse and rebill the claim in question.

II.  For every drug for which the pharmacy benefit manager establishes a maximum allowable cost to determine the drug product reimbursement, the pharmacy benefit manager shall:

(a)  Include in the contract with the pharmacy information identifying the national drug pricing compendia or sources used to obtain the drug price data.

(b)  Make available to a contracted pharmacy the actual maximum allowable cost for each drug.

(c)  Review and make necessary adjustments to the maximum allowable cost for every drug for which the price has changed at least every 14 days.

IIII.  A pharmacy benefit manager shall not require accreditation of providers other than requirements set forth by the New Hampshire pharmacy board or other state or federal entity.

402-N:4  Prescription Drugs.

I.  A pharmacy benefits manager or insurer shall require a contracted pharmacy to charge an enrollee or insured person the pharmacy's usual and customary price of filling the prescription or the contracted copayment, whichever is less.

II.   Once it has settled a claim for filling a prescription for an enrollee or insured person and notified the pharmacy of the amount the pharmacy benefits manager or insurer shall pay to the pharmacy for that prescription, the pharmacy benefits manager or insurer shall not lower the amount to be paid to the pharmacy by the pharmacy benefits manager or the insurer for such settled claim; provided, however, that this paragraph shall not apply if the claim was submitted fraudulently or with inaccurate or misrepresented information.

402-N:5  Complaints Relative to Pharmacy Benefit Managers.

I.  Consumers may file a complaint related to a registered pharmacy benefit manager pursuant to RSA 400-A:15-e.

II.  The commissioner shall adopt rules, pursuant to RSA 541-A, to implement RSA 402-N:4, II.  Such rules shall include procedures for addressing complaints, provisions for enforcement, the receipt of complaints referred to the insurance department under RSA 318:47-h, III(b), and for reporting to the board of pharmacy on the status of complaints referred.

402-N:6  Severability.  If any provision of this chapter or the application of this chapter to any person or circumstance is held invalid, the invalidity shall not affect other provisions or applications of this chapter which can be given effect without the invalid provisions or application, and to this end, the provisions of this chapter are declared severable.

3  Pharmacists and Pharmacies; Definition of Pharmacy Benefits Manager.  Amend RSA 318:1, XI-a to read as follows:

XI-a.  "Pharmacy benefits manager" means any person or entity registered under RSA 402-N and practicing as defined in RSA 420-J:3, XXVIII-a.

4  Managed Care Law; Definition of Pharmacy Benefits Manager.  Amend RSA 420-J:3, XXVIII-a to read as follows:

XXVIII-a.  "Pharmacy benefits manager" means a person registered under RSA 402-N who performs pharmacy benefits management services, including a person acting on behalf of a pharmacy benefits manager in a contractual or employment relationship in the performance of pharmacy benefits management services for a covered entity.  "Pharmacy benefits manager" shall not include a health insurer licensed in this state if the health insurer or its subsidiary is providing pharmacy benefits management services exclusively to its own insureds, or a private single employer self-funded plan that provides such benefits or services directly to its beneficiaries.  "Pharmacy benefits management" means the administration of prescription drug benefits provided by a covered entity under the terms and conditions of the contract between the pharmacy benefits manager and the covered entity and the provision of mail order pharmacy services.

5  New Section; Commission to Study Greater Transparency in Pharmaceutical Costs and Drug Rebate Programs.  Amend RSA 126-A by inserting after section 77 the following new section:

126-A:77-a  Commission to Study Greater Transparency in Pharmaceutical Costs and Drug Rebate Programs Reestablished.

I.  There is established a commission to study greater transparency in pharmaceutical costs and drug rebate programs.

(a)  The members of the commission shall be as follows:

(1)  Three members of the house of representatives, appointed by the speaker of the house of representatives.

(2)  One member of the senate, appointed by the president of the senate.

(3)  The insurance commissioner, or designee.

(4)  The commissioner of the department of health and human services, or designee.

(5)  One public member, appointed by the governor.

(6)  A representative of the New Hampshire Hospital Association, appointed by the association.

(7)  A physician licensed under RSA 329, appointed by the New Hampshire Medical Society.

(8)  The executive director of New Futures, or designee.

(9)  A representative of the New Hampshire Pharmacists Association, appointed by the association.

(10)  A representative of the Business and Industry Association of New Hampshire, appointed by the association.

(11)  A member representing pharmacy benefit managers, appointed by the Pharmaceutical Care Management Association.

(12)  A representative of America's Health Insurance Plans (AHIP), appointed by that organization.

(13)  A representative of Pharmaceutical Research and Manufacturers of America, appointed by that organization.

(b)  Legislative members of the commission shall receive mileage at the legislative rate when attending to the duties of the commission.

II.(a)(1)  The commission shall study how to achieve greater transparency in pharmaceutical costs by identifying and analyzing certain critical prescription drugs and their role in overall health care spending in the New Hampshire and by analyzing the amounts rebated by drug manufacturers for certain high cost and high utilization prescription drugs.  The commission's study shall include, but not be limited to:

(A)  Studying strategies available to achieve greater transparency in pharmaceutical costs by identifying and analyzing certain critical prescription drugs and their role in overall health care spending and the impact of price increases on patients and their families.

(B)  Reviewing legislative efforts in other states and taking advantage of any other analysis by outside organizations or foundations.

(C)  Analyzing the impact of drug prices on insurance premium costs, consumer out-of-pocket costs for prescription drugs, and state and county purchasing of prescription drugs.

(D)  Analyzing the potential impact of transparency in relation to the practices of pharmaceutical manufacturers and pharmacy benefits managers, including how research and development, marketing, and rebates affect drug prices.

(E)  Proposing changes to New Hampshire law, as needed, to reduce the rising cost of pharmaceuticals.

(2)  The commission shall also study the role pharmacy benefit managers play in the cost, administration, and distribution of prescription drugs; if greater transparency in pharmaceutical costs to purchasers would lower costs in overall health care spending in New Hampshire; and analyzing the amounts rebated by drug manufacturers for prescription drugs passed to purchasers and patients.  The goal shall be to determine if any changes to New Hampshire laws could reduce the rising cost of pharmaceuticals to purchasers or patients.

(b)  The commission may solicit input from any person or entity the commission deems relevant to its study.

III.  The members of the commission shall elect a chairperson from among the members.  The first meeting of the commission shall be called by the first-named house member.  The first meeting of the commission shall be held within 45 days of the effective date of this section.  Eight members of the commission shall constitute a quorum.

IV.  The commission shall make a report with its findings and any recommendations for proposed legislation on or before November 1, 2020 to the speaker of the house of representatives, the president of the senate, the house clerk, the senate clerk, the governor, and the state library.

6  Repeal.  RSA 126-A:77-a, relative to a commission to study greater transparency in pharmaceutical costs and drug rebate programs, is repealed.

7  Repeal.  RSA 402-N:3, III, relative to accreditation of providers, is repealed.

8  Membership of the Commission to Study Greater Transparency in Pharmaceutical Costs and Drug Rebate Programs.  To the extent possible, the membership of the commission to study greater transparency in pharmaceutical costs and drug rebate programs reestablished in section 5 of this act shall remain the same as the commission established in former RSA 126-A:77.

9  Effective Date.  

I.  Sections 1-4 of this act shall take effect January 1, 2020.

II.  Section 6 of this act shall take effect November 1, 2020.

III.  Section 7 of this act shall take effect June 30, 2020.

IV.  The remainder of this act shall take effect upon its passage.

 

LBAO

19-1095

1/18/19

 

SB 226-FN- FISCAL NOTE

AS INTRODUCED

 

AN ACT relative to registration of pharmacy benefit managers, and reestablishing the commission to study greater transparency in pharmaceutical costs and drug rebate programs.

 

FISCAL IMPACT:      [ X ] State              [ X ] County               [ X ] Local              [    ] None

 

 

 

Estimated Increase / (Decrease)

STATE:

FY 2020

FY 2021

FY 2022

FY 2023

   Appropriation

$0

$0

$0

$0

   Revenue

Indeterminable

Indeterminable

Indeterminable

Indeterminable

   Expenditures

Indeterminable

Indeterminable

Indeterminable

Indeterminable

Funding Source:

  [ X ] General            [    ] Education            [    ] Highway           [ X ] Other - Insurance Administrative Fund

 

 

 

 

 

COUNTY:

 

 

 

 

   Revenue

$0

$0

$0

$0

   Expenditures

Indeterminable

Indeterminable

Indeterminable

Indeterminable

 

 

 

 

 

LOCAL:

 

 

 

 

   Revenue

$0

$0

$0

$0

   Expenditures

Indeterminable

Indeterminable

Indeterminable

Indeterminable

 

METHODOLOGY:

This bill requires the Insurance Department to license and regulate pharmacy benefits managers and reestablishes a commission to study greater transparency in pharmaceutical costs and drug rebate programs.  The Department reports being unable to ascertain how many pharmacy benefits managers would require licensure under this bill.  Therefore, the Department is unable to determine if the requirements of this bill could be implemented using existing resources or result in an increase to state expenditures.  Also, the Department reports this bill may impact insurance premiums, which would impact premium tax revenue and insurance premium expenditures for county and local government entities by an indeterminable amount.  Further, licensing fees and fines established in this bill would increase general fund revenue by an indeterminable amount.

 

AGENCIES CONTACTED:

Insurance Department

 

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