Bill Text: NJ S3568 | 2018-2019 | Regular Session | Introduced
Bill Title: Regulates certain practices of pharmacy benefits managers and certain health benefits plans.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2019-03-07 - Introduced in the Senate, Referred to Senate Commerce Committee [S3568 Detail]
Download: New_Jersey-2018-S3568-Introduced.html
Sponsored by:
Senator LINDA R. GREENSTEIN
District 14 (Mercer and Middlesex)
SYNOPSIS
Regulates certain practices of pharmacy benefits managers and certain health benefits plans.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning pharmacy benefits managers and supplementing P.L.2015, c.179 (C.17B:27F-1 et seq.).
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. As used in this act:
"Affordable Care Act" means the federal "Patient Protection and Affordable Care Act," Pub.L.111-148, as amended by the federal "Health Care and Education Reconciliation Act of 2010," Pub.L.111-152, and any federal rules and regulations adopted pursuant thereto.
"Labeler" means a person or entity that receives prescription drugs from a manufacturer or wholesaler and repackages those drugs for later retail sale and who has a labeler code from the federal Food and Drug Administration under Part 207 of Title 21 of the Code of Federal Regulations.
2. a. After the effective date of this act, no person, corporation, partnership or other entity shall operate a pharmacy benefits manager in this State except in accordance with the provisions of this act.
b. Any person providing pharmacy benefits management services on behalf of a purchaser located in this State in a manner substantially provided for in this act shall be presumed to be subject to the provisions of this act unless the person is otherwise regulated under State law.
3. With respect to a contract between a pharmacy benefits manager and a purchaser entered into, amended, or renewed, on or after January 1 of the first calendar year after the effective date of this act:
a. The pharmacy benefits manager shall exercise good faith and fair dealing.
b. The pharmacy benefits manager shall notify the purchaser in writing of any activity, policy, or practice of the pharmacy benefits manager that directly or indirectly presents a conflict of interest that interferes with the discharge of the pharmacy benefits manager's duty to the purchaser to exercise good faith and fair dealing pursuant to subsection a. of this section.
c. The pharmacy benefits manager shall, on a quarterly basis, disclose the following information with respect to prescription product benefits specific to the purchaser:
(1) The aggregate wholesale acquisition costs from a pharmaceutical manufacturer or labeler for each therapeutic category of drugs containing three or more drugs, as outlined in the State's essential health benefits benchmark plan established pursuant to the Affordable Care Act;
(2) The aggregate amount of rebates received by the pharmacy benefits manager by therapeutic category of drugs containing three or more drugs, as outlined in the State's essential health benefits benchmark plan established pursuant to the Affordable Care Act. The aggregate amount of rebates shall include any utilization discounts the pharmacy benefits manager receives from a pharmaceutical manufacturer or labeler;
(3) Any administrative fees received from the pharmaceutical manufacturer or labeler;
(4) Whether the pharmacy benefits manager has a contract, agreement, or other arrangement with a pharmaceutical manufacturer to exclusively dispense or provide a drug to covered persons, and the application of all consideration or economic benefits collected or received pursuant to that arrangement;
(5) Prescription drug utilization information for the purchaser's covered persons that is not specific to any individual enrollee or insured;
(6) The aggregate amount of payments, or the equivalent economic benefit, made by the pharmacy benefits manager to pharmacies owned or controlled by the pharmacy benefits manager;
(7) The aggregate amount of payments made by the pharmacy benefits manager to pharmacies not owned or collected by the pharmacy benefits manager; and
(8) The aggregate amount of the fees imposed on, or collected from, network pharmacies or other assessments against network pharmacies, and the application of those amounts collected pursuant to the contract with the purchaser.
d. The information disclosed pursuant to subsection c. of this section shall apply to all retail, mail order, specialty, and compounded prescription products.
e. The pharmacy benefits manager shall not impose a penalty or offer an inducement to a purchaser for the purpose of deterring the purchaser from requesting the information set forth in subsection c. of this section.
f. The pharmacy benefits manager shall disclose to a pharmacy network provider or its contracting agent any material change to a contract provision that affects the terms of reimbursement, the process for verifying benefits and eligibility, dispute resolution, procedures for verifying drugs included on the formulary, and contract termination at least 30 days before the date of the change to the provision.
g. The pharmacy benefits
manager shall not notify an individual receiving benefits through the pharmacy
benefits manager that a pharmacy has been terminated from the pharmacy benefits
manager's network until the notification of termination has been provided to
that pharmacy.
4. a. A health benefits plan that contracts with a pharmacy benefits manager for management of any or all of its prescription drug coverage shall require the pharmacy benefits manager to do all of the following:
(1) register with the Department of Banking and Insurance pursuant to the requirements of this act;
(2) exercise good faith and fair dealing in the performance of its contractual duties to a health benefits plan; and
(3) inform all pharmacists under contract with or subject to contracts with the pharmacy benefits manager of the pharmacist's rights to submit complaints to the department.
b. A pharmacy benefits manager shall notify a health benefits plan in writing of any activity, policy, or practice of the pharmacy benefits manager that directly or indirectly presents a conflict of interest that interferes with the discharge of the pharmacy benefits manager's duty to the health benefits plan to exercise good faith and fair dealing in the performance of its contractual duties pursuant to subsection a. of this section.
c. The failure of a health benefits plan to comply with the provisions of this section shall constitute a violation of this act. The Commissioner of Banking and Insurance shall, as appropriate, investigate and take enforcement action against a health benefits plan that fails to comply with these provisions and shall periodically evaluate contracts between health benefits plans and pharmacy benefits managers to determine if any audit, evaluation, or enforcement action by the department is appropriate.
5. a. The Department of Banking and Insurance, in consultation and collaboration with other agencies, departments, advocates, experts, health benefits plan representatives, and other entities and stakeholders that the department deems appropriate, shall conduct a study to determine what information related to pharmaceutical costs, if any, the department should require health benefits plans or their contracted pharmacy benefits managers to report.
b. The department shall consider inclusion of information including, but not limited to, the following:
(1) wholesale acquisition costs of pharmaceuticals;
(2) rebates obtained by the health benefits plan or the pharmacy benefit manager from pharmaceutical manufacturers;
(3) payments to network pharmacies; and
(4) exclusivity arrangements between health benefits plans or contracted pharmacy benefits managers with pharmaceutical manufacturers.
c. The department shall submit the study to the Governor and, pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), the Legislature. The study shall include the recommendations of the department and shall be submitted no later than 180 days after the effective date of this act. The department may contract with a consultant with expertise in pharmaceutical costs to assist the department in conducting the study.
6. The commissioner shall evaluate situations in which a pharmacy benefits manager disregards the prescribing practice of a physician and substitutes its own judgment though the use of mandated step therapy, and whether the situation constitutes the practice of medicine. If the commissioner makes such a finding, the matter shall be referred to the State Board of Medical Examiners.
7. This act shall take effect on the 90th day next following enactment.
STATEMENT
This bill requires pharmacy benefits managers to adhere to certain practices in order to operate in this State. The bill also places certain requirements on health benefits plans that contract with pharmacy benefits managers and on pharmacies.
The bill also places certain requirements on the operations of pharmacy benefits managers, including requirements to exercise good faith and fair dealing and to disclose certain information about product costs and aggregate payments to pharmacies.
The bill requires that a health benefits plan that contracts with a pharmacy benefits manager for management of any or all of its prescription drug coverage shall require the pharmacy benefits manager to do all of the following:
(1) register with the Department of Banking and Insurance pursuant to the requirements of the bill;
(2) exercise good faith and fair dealing in the performance of its contractual duties to a health benefits plan; and
(3) inform all pharmacists under contract with or subject to contracts with the pharmacy benefits manager of the pharmacist's rights to submit complaints to the department.
The bill further provides that the failure of a health benefits plan to comply with these requirements shall constitute a violation of the bill's provisions. The Commissioner of Banking and Insurance shall, as appropriate, investigate and take enforcement action against a health benefits plan that fails to comply with these provisions and shall periodically evaluate contracts between health benefits plans and pharmacy benefits managers to determine if any audit, evaluation, or enforcement action by the department is appropriate.
The bill provides that the department, in consultation and collaboration with other agencies, departments, advocates, experts, health benefits plans' representatives, and other entities and stakeholders that the department deems appropriate, shall conduct a study to determine what information related to pharmaceutical costs, if any, the department should require to be reported by health benefits plans or their contracted pharmacy benefits managers. The department shall submit the study to the Governor and the Legislature no later than 180 days after the effective date of the bill.
The bill provides that the commissioner shall evaluate situations in which a pharmacy benefits manager disregards the prescribing practice of a physician and substitutes its own judgment though the use of mandated step therapy, and whether the situation constitutes the practice of medicine. If the commissioner makes such a finding, the matter shall be referred to the State Board of Medical Examiners.
