Existing law requires a pharmacy benefit manager, which is an entity that manages a pharmacy benefits plan, 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. (NRS 683A.171-683A.179) Existing law defines “pharmacy benefits plan” to refer to insurance coverage of prescription drugs. (NRS 683A.175) Section 21 of this bill expands the scope of that definition to also refer to insurance coverage of pharmacist services. Section 21 thereby expands the scope of provisions governing pharmacy benefit managers to also apply to entities that manage such coverage. Sections 3-14 of this bill define certain other terms relevant to pharmacy benefit managers, and section 20 of this bill establishes the applicability of those definitions. Section 15 of this bill prohibits a pharmacy benefit manager that manages a pharmacy benefits 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 15 additionally prohibits a pharmacy benefit manager from engaging in certain practices which are intended to steer or have the effect of steering a person towards an affiliated pharmacy instead of a nonaffiliated pharmacy in the network. Section 15 also prohibits a pharmacy benefit manager from discriminating against a nonaffiliated pharmacy. Section 16 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: (1) the amounts and types of fees that the pharmacy benefit manager charges the third party insurer for managing the plan or otherwise receives from other entities, including rebates, in connection with managing the plan; and (2) certain information relating to the clinical efficacy and evidence regarding the inclusion or exclusion of certain drugs in a formulary. Section 16 additionally requires a pharmacy benefit manager to make certain contracts available for inspection by the Commissioner. Sections 25, 27-32, 35 and 36 of this bill require certain third party insurers to calculate any cost-sharing obligation for a prescription drug assessed against an insured for the prescription drug: (1) based on the net price that the third party insurer or a pharmacy benefit manager with which the insurer has contracted pays for the drug; and (2) at the point-of-sale. Section 26 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 25 in certain circumstances. Sections 33 and 37 of this bill indicate that the requirements of sections 32 and 36, respectively, are inapplicable to: (1) coverage provided by a managed care organization to recipients of Medicaid because existing law imposes similar requirements of the Medicaid program; and (2) coverage provided by a managed care organization to members of the Public Employees' Benefits Program. (NRS 422.4053) Section 41 of this bill makes the requirements of section 36 inapplicable to coverage provided by the Public Employees' Benefits Program to its members. Section 34 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 32. The Commissioner would also be authorized to take such action against other third party insurers who fail to comply with the requirements of sections 25, 27-32, 35 and 36. (NRS 680A.200) Section 17 of this bill prohibits a pharmacy benefit manager from: (1) unreasonably obstructing or interfering with the ability of a covered person to timely access a prescription drug at certain pharmacies; (2) agreeing to exclusively cover certain drugs; (3) restricting the ability of a nonaffiliated pharmacy to contract with certain entities; and (4) making or disseminating a false or misleading statement or advertisement. Section 24 of this bill additionally prohibits a pharmacy benefit manager from engaging in certain practices while doing business with pharmacies. Section 19 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. Section 1 of this bill requires third party insurers that provide coverage for prescription drugs to submit a similar report to the Commissioner relating to the pricing of prescription drugs. Section 39 of this bill provides for the confidentiality of the information contained in those reports. Sections 1 and 19 require the Commissioner to compile, submit to the Legislature and publish on the Internet biennial reports on the impact of the cost of prescription drugs on health insurance premiums in this State and the overall impact of pharmacy benefit managers on the cost of prescription drugs in this State, based on the reports submitted by third party insurers and pharmacy benefit managers, respectively. Additionally, section 18 of this bill requires the Commissioner to publish on the Internet certain consumer complaints made against 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) Section 22 of this bill provides that such federally regulated coverage provided by employers for their employees is also exempt from the requirements of this bill governing pharmacy benefit managers, unless required by contract to comply with those requirements. Additionally, sections 21.5 and 22 of this bill exempt coverage of prescription drugs provided by the Public Employees' Benefits Program, insurance plans for local government employees and Medicaid managed care organizations from the requirements of this bill governing pharmacy benefit managers. Existing law provides that a pharmacy benefit manager has an obligation of good faith and fair dealing toward a third party insurer or pharmacy when performing duties pursuant to a contract to which the pharmacy benefit manager is a party. (NRS 683A.178) Section 23 of this bill provides that a pharmacy benefit manager also has a fiduciary duty to persons covered by a third party insurer for which the pharmacy benefit manager provides pharmacy benefit services. Section 23 also: (1) prohibits a pharmacy benefit manager from engaging in an activity that may interfere with the duties and obligations of the pharmacy benefit manager towards third party insurers, pharmacies and covered persons; and (2) authorizes a third party insurer to audit the books and records of a pharmacy benefit manager for certain purposes. Section 18 provides that a pharmacy benefit manager that violates provisions of law governing pharmacy benefit managers, including sections 3-24, is subject to a civil penalty of not less than $1,000 but not more than $7,500 for each violation. Additionally, any violation of sections 3-24 would be a misdemeanor. (NRS 683A.490) If enacted, sections 13-15 of Assembly Bill No. 343 (A.B. 343) of this session will require a hospital to publish certain information about its prices. Section 17 of A.B. 343 prohibits a hospital from taking certain action to collect medical debt while the hospital is not in compliance with those requirements or certain similar federal requirements. (45 C.F.R. §§ 180.40, 180.50, 180.60) Section 41.5 of this bill narrows the applicability of that prohibition to only apply to certain medical debt to which the failure to publish accurate pricing information is directly relevant. Section 41.7 of this bill makes a conforming change to A.B. 343 to reflect the revisions made by section 41.5.

Statutes affected:
As Introduced: 683A.171, 683A.175, 683A.177, 683A.178, 683A.179, 689A.330, 689C.425, 695C.050, 695C.330, 695G.090, 41.600, 239.010, 287.010, 287.04335, 598.0977
Reprint 1: 683A.171, 683A.175, 683A.176, 683A.177, 683A.178, 683A.179, 689A.330, 689C.425, 695C.050, 695C.330, 695G.090, 41.600, 239.010, 287.010, 287.04335, 598.0977
Reprint 2: 683A.171, 683A.175, 683A.176, 683A.177, 683A.178, 683A.179, 689A.330, 689C.425, 695C.050, 695C.330, 695G.090, 239.010, 287.04335
Reprint 3: 683A.171, 683A.175, 683A.176, 683A.177, 683A.178, 683A.179, 689A.330, 689C.425, 695C.050, 695C.330, 695G.090, 239.010, 287.04335
Reprint 4: 683A.171, 683A.175, 683A.176, 683A.177, 683A.178, 683A.179, 689A.330, 689C.425, 695C.050, 695C.330, 695G.090, 239.010, 287.04335
BDR: 683A.171, 683A.175, 683A.177, 683A.178, 683A.179, 689A.330, 689C.425, 695C.050, 695C.330, 695G.090, 41.600, 239.010, 287.010, 287.04335, 598.0977