ARIZONA STATE SENATE
Fifty-Fifth Legislature, Second Regular Session
prescription drug coverage; steering prohibition
Purpose
Prohibits a pharmacy benefit manager from steering or directing a patient to use the manager's affiliated pharmacy or durable medical equipment provider.
Background
A pharmacy benefit manager is a person, business or entity that either directly or through an intermediary manages the prescription drug coverage provided by a contracted insurer or other third party payor, including the processing and payment of claims for prescription drugs, the performance of drug utilization review, the processing of drug prior authorization requests, the adjudication of appeals or grievances related to prescription drug coverage, contracting with network pharmacies and controlling the cost of covered prescription drugs (A.R.S. 20-3321).
Pharmacy benefit managers are charged with: 1) updating the price and drug information for each list that the manager maintains; 2) making the sources used to determine maximum allowable cost pricing available to each network pharmacy at the beginning of a contract or upon renewal; 3) establishing a process for network pharmacies to appeal its reimbursement for any drug subject to maximum allowable cost pricing; and 4) allowing a pharmacy services organization that is contracted with the manager to file an appeal of a drug on behalf of the organization's contracted pharmacies (A.R.S. 20-3331).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
1. Prohibits a pharmacy benefit manager, through written or oral communication, from steering or directing a patient to use the manager's affiliated provider, including through online messaging, advertising, marketing or promotion of the affiliated provider.
2. Specifies that the prohibition on steering a patient to an affiliated provider does not bar a pharmacy benefit manager from including its affiliated provider in any communications with patients if the communication is regarding:
a) information about the cost of services in the patient's health benefits plan; or
b) accurate comparable information regarding pharmacies or providers that are not the issuer's or manager's affiliated providers.
3. Restricts a pharmacy benefit manager from:
a) requiring a patient to use the manager's affiliated provider in order for the patient to receive the maximum benefit under their health benefit's plan;
b) requiring a patient to use the pharmacy benefit manager's affiliated provider, including by providing reduced cost sharing if the patient uses the affiliated provider;
c) soliciting a patient or prescriber to transfer a prescription to an affiliated provider;
d) requiring a pharmacy or durable medical equipment provider that is not an affiliated provider to transfer a patient's prescription to an affiliated provider without consent of the patient; and
e) paying an affiliated provider a reimbursement amount that is more than the amount the pharmacy benefit manager pays an unaffiliated provider for the same product or service.
4. Prohibits a pharmacy benefit manager from transferring records containing patient or prescriber identifiable prescription information to or from an affiliated provider for a commercial purpose.
5. Stipulates that reimbursement, formulary compliance, pharmaceutical care and utilization review by a provider are not considered commercial purposes for transferring patient or prescriber identifiable prescription information.
6. Applies, to a pharmacy benefit manager acting on its own behalf or on behalf of an insurer or third-party payor, the outlined prohibitions relating to steering or requiring a patient to use an affiliated provider.
7. Prohibits a pharmacy benefit manager, health insurer or third-party payor from:
a) requiring a clinician-administered drug to be dispensed by a pharmacy as a condition of coverage;
b) limiting or excluding coverage of a drug that is not dispensed by a pharmacy or affiliated provider, if the drug is covered under the health benefits plan or pharmacy benefit plan; and
c) covering prescription drugs as a different benefit with cost sharing requirements that impose greater expense for a covered individual, if the drug is dispensed or administered at the prescriber's office, a hospital outpatient infusion center or any other outpatient clinical setting.
8. Specifies that the prohibitions relating to clinician-administered drugs do not authorize any person to administer an illegal prescription drug or modify Arizona prescription drug administration requirements.
9. Defines affiliated provider as a pharmacy or durable medical equipment provider that directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with a pharmacy benefit manager.
10. Defines clinician-administered drug, health care provider and prescriber.
11. Applies the requirements and prohibitions of this legislation to contracts entered into, amended, extended or renewed on or after the effective date.
12. Contains a severability clause.
13. Makes technical and conforming changes.
14. Becomes effective on the general effective date.
Prepared by Senate Research
January 14, 2022
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