Existing law requires a pharmacy benefit manager to obtain a certificate of registration as an insurance administrator from the Commissioner of Insurance and comply with the requirements that apply to insurance administrators generally. (NRS 683A.025, 683A.08522-683A.0893) Existing law additionally imposes certain requirements specifically regulating the operation of pharmacy benefit managers, which are entities that manage pharmacy benefits plans. (NRS 683A.171-683A.179) Existing law defines “pharmacy benefits plan” to refer to insurance coverage of prescription drugs. (NRS 683A.175) Section 19 of this bill expands the scope of that definition to also refer to insurance coverage of pharmacist services. Section 19 thereby expands the scope of provisions governing pharmacy benefit managers to also apply to entities that manage such coverage. Sections 2-13 of this bill define certain other terms relevant to pharmacy benefit managers, and section 18 of this bill establishes the applicability of those definitions. Section 14 of this bill prohibits a pharmacy benefit manager that manages a plan which provides coverage through a network from requiring a person to use a pharmacy affiliated with the pharmacy benefit manager if there are other, nonaffiliated pharmacies in the network. Section 14 additionally prohibits a pharmacy benefit manager from engaging in certain practices which are intended or have the effect of steering a person towards an affiliated pharmacy instead of a nonaffiliated pharmacy in the network. Section 14 also prohibits a pharmacy benefit manager from discriminating against a nonaffiliated pharmacy. Section 15 of this bill requires a pharmacy benefit manager to disclose to a third party insurer for which the pharmacy benefit manager manages a pharmacy benefits plan the amount and types of fees that the pharmacy benefit manager charges the third party for managing the plan or otherwise receives from other entities, including rebates, in connection with managing the plan. Existing law authorizes the Department of Health and Human Services to enter into a contract with a pharmacy benefit manager to manage coverage of prescription drugs under the State Plan for Medicaid and the Children's Health Insurance Program that requires the pharmacy benefit manager to provide to the Department all rebates received for purchasing drugs in relation to those programs. (NRS 422.4053) Section 15 imposes similar requirements for pharmacy benefit managers that manage other pharmacy benefits plans. Specifically, section 15 requires a pharmacy benefit manager to provide the entire amount of any rebate the pharmacy benefit manager receives in connection with providing pharmacy benefit management services for a third party insurer that provides pharmacy coverage to: (1) persons covered by the third party; or (2) the third party. Sections 22, 24-29, 32, 33, 36 and 37 of this bill require certain third parties that provide coverage for prescription drugs to use any rebate money received from a pharmacy benefit manager pursuant to section 15 for the sole purpose of reducing premiums and eliminating or reducing cost-sharing obligations of covered persons. Section 23 of this bill authorizes the Commissioner to require a domestic insurer that issues a policy of individual health insurance to a person residing in another state to meet the requirements of section 22 in certain circumstances. Sections 30 and 34 of this bill indicate that the requirement governing the use of rebates received from a pharmacy benefit manager is inapplicable to a managed care organization that is providing coverage to recipients of Medicaid. Section 31 of this bill authorizes the Commissioner to suspend or revoke the certificate of a health maintenance organization that fails to comply with the requirements of section 29. The Commissioner would also be authorized to take such action against other health insurers who fail to comply with the requirements of sections 22, 24-28, 32 and 33. (NRS 680A.200) Section 16 of this bill prohibits a pharmacy benefit manager from: (1) using spread pricing, which is a technique by which a pharmacy benefit manager charges a third party an amount for a prescription drug that is different from the amount that the pharmacy benefit manager reimburses a pharmacy for the same drug; (2) agreeing to exclusively cover certain drugs; and (3) making or disseminating a false or misleading statement or advertisement. Section 21 of this bill additionally prohibits a pharmacy benefit manager from engaging in certain practices while doing business with pharmacies. Section 21 also authorizes a pharmacy to bring an action to recover certain damages against a pharmacy benefit manager that retaliates against the pharmacy for reporting or attempting to remedy a potential or actual violation of law applicable to insurance by the pharmacy benefit manager. Section 17 of this bill requires a pharmacy benefit manager to submit to the Commissioner an annual report detailing certain business practices of the pharmacy benefit manager as well as certain information regarding pricing and rebates relating to the prescription drugs administered by the pharmacy benefit manager. Sections 17 and 35 of this bill provide for the confidentiality of the information contained in the report. Section 17 requires the Commissioner to compile, submit to the Legislature and publish on the Internet a report once every 2 years on the overall impact of pharmacy benefit managers on the cost of prescription drugs in this State based on the reports submitted by the pharmacy benefit managers. Existing law exempts certain federally regulated insurance coverage of prescription drugs provided by employers for their employees from requirements governing pharmacy benefit managers except where the pharmacy benefit manager is required by contract to comply with those requirements. (NRS 683A.177) In Rutledge v. Pharm. Care Mgmt. Ass'n, the United States Supreme Court held that states are authorized to impose certain general requirements governing pharmacy benefit managers on pharmacy benefit managers that manage such coverage. (592 U.S. 80, 89 (2020)) Section 20 of this bill removes the exemption for such coverage from certain requirements governing pharmacy benefit managers, thereby requiring a pharmacy benefit manager that manages such coverage to comply with those requirements. Section 20 also subjects a pharmacy benefit manager that manages such coverage to the requirements of this bill, to the extent authorized by current precedent of the United States Supreme Court.

Statutes affected:
As Introduced: 683A.171, 683A.175, 683A.177, 683A.179, 689A.330, 689C.425, 695C.050, 695C.330, 695G.090, 239.010, 287.010, 287.04335
BDR: 683A.171, 683A.175, 683A.177, 683A.179, 689A.330, 689C.425, 695C.050, 695C.330, 695G.090, 239.010, 287.010, 287.04335