Senate File 2092 - Introduced
SENATE FILE 2092
BY DAWSON
A BILL FOR
1 An Act relating to pharmacy benefits managers, pharmacies, and
2 prescription drug benefits, and including applicability
3 provisions.
4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
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1 Section 1. Section 505.26, subsection 1, paragraph b, Code
2 2022, is amended to read as follows:
3 b. “Pharmacy benefits manager” means the same as defined in
4 section 510B.1 510C.1.
5 Sec. 2. Section 507B.4, subsection 3, Code 2022, is amended
6 by adding the following new paragraph:
7 NEW PARAGRAPH. t. Pharmacy benefits managers. Any
8 violation of chapter 510B by a pharmacy benefits manager.
9 Sec. 3. Section 510B.1, Code 2022, is amended by striking
10 the section and inserting in lieu thereof the following:
11 510B.1 Definitions.
12 As used in this chapter, unless the context otherwise
13 requires:
14 1. “Clean claim” means a claim that has no defect or
15 impropriety, including a lack of any required substantiating
16 documentation, or other circumstances requiring special
17 treatment, that prevents timely payment from being made on the
18 claim.
19 2. “Commissioner” means the commissioner of insurance.
20 3. “Cost-sharing” means any coverage limit, copayment,
21 coinsurance, deductible, or other out-of-pocket cost obligation
22 imposed by a health benefit plan on a covered person.
23 4. “Covered person” means a policyholder, subscriber, or
24 other person participating in a health benefit plan that has
25 a prescription drug benefit managed by a pharmacy benefits
26 manager.
27 5. “Health benefit plan” means the same as defined in
28 section 514J.102.
29 6. “Health care professional” means the same as defined in
30 section 514J.102.
31 7. “Health carrier” means the same as defined in section
32 514J.102.
33 8. “Maximum allowable cost” means the maximum amount that a
34 pharmacy will be reimbursed by a pharmacy benefits manager or a
35 health carrier for a generic drug, brand-name drug, biologic
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1 product, or other prescription drug, and that may include any
2 of the following:
3 a. Average acquisition cost.
4 b. National average acquisition cost.
5 c. Average manufacturer price.
6 d. Average wholesale price.
7 e. Brand effective rate.
8 f. Generic effective rate.
9 g. Discount indexing.
10 h. Federal upper limits.
11 i. Wholesale acquisition cost.
12 j. Any other term used by a pharmacy benefits manager or a
13 health carrier to establish reimbursement rates for a pharmacy.
14 9. “Maximum allowable cost list” means a list of
15 prescription drugs that includes the maximum allowable cost
16 for each prescription drug and that is used, directly or
17 indirectly, by a pharmacy benefits manager.
18 10. “Pharmacist” means the same as defined in section
19 155A.3.
20 11. “Pharmacy” means the same as defined in section 155A.3.
21 12. “Pharmacy acquisition cost” means the cost to a pharmacy
22 for a prescription drug as invoiced by a wholesale distributor.
23 13. “Pharmacy benefits manager” means the same as defined
24 in section 510C.1.
25 14. “Pharmacy benefits manager affiliate” means a pharmacy or
26 a pharmacist that directly or indirectly through one or more
27 intermediaries, owns or controls, is owned and controlled by,
28 or is under common ownership or control of, a pharmacy benefits
29 manager.
30 15. “Pharmacy network” or “network” means pharmacies that
31 have contracted with a pharmacy benefits manager to dispense
32 or sell prescription drugs to covered persons of a health
33 benefit plan for which the pharmacy benefits manager manages
34 the prescription drug benefit.
35 16. “Prescription drug” means the same as defined in section
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1 155A.3.
2 17. “Prescription drug benefit” means the same as defined
3 in section 510C.1.
4 18. “Prescription drug order” means the same as defined in
5 section 155A.3.
6 19. “Rebate” means the same as defined in section 510C.1.
7 20. “Wholesale distributor” means the same as defined in
8 section 155A.3.
9 Sec. 4. Section 510B.4, Code 2022, is amended to read as
10 follows:
11 510B.4 Performance of duties —— good faith —— conflict of
12 interest.
13 1. A pharmacy benefits manager shall perform the pharmacy
14 benefits manager’s duties exercising exercise good faith and
15 fair dealing in the performance of its the pharmacy benefits
16 manager’s contractual obligations toward the covered entity a
17 health carrier.
18 2. A pharmacy benefits manager shall notify the covered
19 entity a health carrier in writing of any activity, policy,
20 practice ownership interest, or affiliation of the pharmacy
21 benefits manager that presents any conflict of interest.
22 3. a. A pharmacy benefits manager shall owe a fiduciary
23 duty to each health carrier for whom the pharmacy benefits
24 manager manages a prescription drug benefit provided by the
25 health carrier, and shall discharge its duties in accordance
26 with applicable state and federal law.
27 b. A health carrier shall owe a fiduciary duty to each
28 covered person participating in a health benefit plan offered
29 or issued by the health carrier, and the health carrier shall
30 discharge its duties in accordance with applicable state and
31 federal law.
32 4. A pharmacy benefits manager, health carrier, or health
33 benefit plan shall not discriminate against a pharmacy
34 or a pharmacist with respect to participation, referral,
35 reimbursement of a covered service, or indemnification if a
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1 pharmacist is acting within the scope of the pharmacist’s
2 license.
3 Sec. 5. Section 510B.5, Code 2022, is amended to read as
4 follows:
5 510B.5 Contacting covered individual persons —— requirements.
6 A pharmacy benefits manager, unless authorized pursuant to
7 the terms of its contract with a covered entity health carrier,
8 shall not contact any covered individual person without
9 the express written permission of the covered entity health
10 carrier.
11 Sec. 6. Section 510B.6, Code 2022, is amended to read as
12 follows:
13 510B.6 Dispensing of substitute Substitute prescription drug
14 for prescribed drug drugs.
15 1. The following provisions shall apply when if a pharmacy
16 benefits manager requests the dispensing of a substitute
17 prescription drug for a prescribed drug to prescribed for a
18 covered individual person:
19 a. The pharmacy benefits manager may request the
20 substitution of a lower priced generic and therapeutically
21 equivalent prescription drug for a higher priced prescribed
22 prescription drug.
23 b. If the substitute prescription drug’s net cost to the
24 covered individual person or covered entity to the health
25 carrier exceeds the cost of the prescribed prescription drug
26 originally prescribed for the covered person, the substitution
27 shall be made only for medical reasons that benefit the covered
28 individual person.
29 2. A pharmacy benefits manager shall obtain the approval of
30 the prescribing practitioner health care professional prior to
31 requesting any substitution under this section.
32 3. A pharmacy benefits manager shall not substitute an
33 equivalent prescription drug contrary to a prescription drug
34 order that prohibits a substitution.
35 Sec. 7. Section 510B.7, Code 2022, is amended by striking
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1 the section and inserting in lieu thereof the following:
2 510B.7 Pharmacy networks.
3 1. A pharmacy located in the state shall not be prohibited
4 from participating in a pharmacy network provided that the
5 pharmacy accepts the same terms and conditions as the pharmacy
6 benefits manager imposes on the pharmacies in the network.
7 2. A pharmacy benefits manager shall not assess, charge, or
8 collect any form of remuneration that passes from a pharmacy
9 or a pharmacist in a pharmacy network to the pharmacy benefits
10 manager including but not limited to claim processing fees,
11 performance-based fees, network participation fees, or
12 accreditation fees.
13 Sec. 8. Section 510B.8, Code 2022, is amended by striking
14 the section and inserting in lieu thereof the following:
15 510B.8 Prescription drugs —— point of sale.
16 1. A covered person shall not be required to make a
17 cost-sharing payment at the point of sale for a prescription
18 drug in an amount that exceeds the maximum allowable cost for
19 that drug at the pharmacy at which the covered person fills the
20 covered person’s prescription drug order.
21 2. A pharmacy benefits manager shall not prohibit a pharmacy
22 from disclosing the availability of a lower-cost prescription
23 drug option to a covered person, or from selling a lower-cost
24 prescription drug option to a covered person.
25 3. Any amount paid by a covered person for a prescription
26 drug purchased pursuant to this section shall be applied to any
27 deductible imposed by the covered person’s health benefit plan
28 in accordance with the health benefit plan coverage documents.
29 4. A covered person shall not be prohibited from filling
30 a prescription drug order at any pharmacy located in the
31 state provided that the pharmacy accepts the same terms and
32 conditions as the covered person’s health benefit plan.
33 5. A pharmacy benefits manager shall not impose different
34 cost-sharing or additional fees on a covered person based on
35 the pharmacy at which the covered person fills the covered
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1 person’s prescription drug order.
2 6. A pharmacy benefits manager shall not require a covered
3 person, as a condition of payment or reimbursement, to purchase
4 pharmacy services, including prescription drugs, exclusively
5 through a mail-order pharmacy.
6 7. a. A covered person’s cost-sharing for a prescription
7 drug shall be calculated at the point-of-sale based on a price
8 that is reduced by an amount equal to at least one hundred
9 percent of all rebates that have been received, or that will be
10 received, by the health carrier or a pharmacy benefits manager
11 in connection with the dispensing or administration of the
12 prescription drug.
13 b. A health carrier shall not be precluded from decreasing
14 a covered person’s cost-sharing by an amount greater than the
15 covered person’s cost-sharing as calculated under paragraph
16 “a”.
17 8. A pharmacy benefits manager shall include any amount
18 paid by a covered person, or by any other person on behalf of
19 a covered person, when calculating the covered person’s total
20 contribution toward the covered person’s cost-sharing.
21 9. A pharmacy may decline to dispense a prescription drug to
22 a covered person if, as a result of the maximum allowable cost
23 list to which the pharmacy is subject, the pharmacy will be
24 reimbursed less for the prescription drug than the pharmacy’s
25 acquisition cost.
26 Sec. 9. NEW SECTION. 510B.8A Maximum allowable cost lists.
27 1. Prior to placement of a particular prescription drug on a
28 maximum allowable cost list, a pharmacy benefits manager shall
29 ensure that all of the following requirements are met:
30 a. The particular prescription drug must be listed as
31 therapeutically and pharmaceutically equivalent in the most
32 recent edition of the publication entitled “Approved Drug
33 Products with Therapeutic Equivalence Evaluations”, published
34 by the United States food and drug administration, otherwise
35 known as the orange book.
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1 b. The particular prescription drug must not be obsolete or
2 temporarily unavailable.
3 c. The particular prescription drug must be available for
4 purchase, without limitations, by all pharmacies in the state
5 from a national or regional wholesale distributor that is
6 licensed in the state.
7 2. For each maximum allowable cost list that a pharmacy
8 benefits manager uses in the state, the pharmacy benefits
9 manager shall do all of the following:
10 a. Provide each pharmacy in a pharmacy network reasonable
11 access to the maximum allowable cost list to which the pharmacy
12 is subject.
13 b. Update the maximum allowable cost list within seven
14 calendar days from the date of an increase of ten percent or
15 more in the pharmacy acquisition cost of a prescription drug on
16 the list by one or more wholesale distributors doing business
17 in the state.
18 c. Update the maximum allowable cost list within seven
19 calendar days from the date of a change in the methodology, or
20 a change in the value of a variable applied in the methodology,
21 on which the maximum allowable cost list is based.
22 d. Provide a reasonable process for each pharmacy in a
23 pharmacy network to receive prompt notice of all changes to the
24 maximum allowable cost list to which the pharmacy is subject.
25 Sec. 10. NEW SECTION. 510B.8B Reimbursement.
26 1. A pharmacy benefits manager shall not reimburse a
27 pharmacy or pharmacist for a prescription drug in an amount
28 less than the national average drug acquisition cost for the
29 prescription drug on the date that the drug is administered or
30 dispensed.
31 2. In addition to the reimbursement required under
32 subsection 1, a pharmacy benefits manager shall reimburse the
33 pharmacy or pharmacist a professional dispensing fee that is
34 no less than the pharmacy dispensing fee published in the Iowa
35 Medicaid enterprise provider fee schedule on the date that the
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1 prescription drug is administered or dispensed.
2 Sec. 11. NEW SECTION. 510B.8C Pharmacy benefits manager
3 affiliates —— reimbursement.
4 A pharmacy benefits manager shall not reimburse any pharmacy
5 located in the state in an amount less than the amount that
6 the pharmacy benefits manager reimburses a pharmacy benefits
7 manager affiliate for dispensing the same prescription drug
8 as dispensed by the pharmacy. The reimbursement amount shall
9 be calculated on a per unit basis based on the same generic
10 product identifier or generic code number.
11 Sec. 12. NEW SECTION. 510B.8D Clean claims.
12 After the date of receipt of a clean claim submitted by a
13 pharmacy in a pharmacy network, a pharmacy benefits manager
14 shall not retroactively reduce payment on the claim, either
15 directly or indirectly, except if the claim is found not to be
16 a clean claim during the course of a routine audit.
17 Sec. 13. NEW SECTION. 510B.8E Appeals and disputes.
18 1. A pharmacy benefits manager shall provide a reasonable
19 process to allow a pharmacy to appeal a maximum allowable cost,
20 or a reimbursement made under a maximum allowable cost list,
21 for a specific prescription drug for any of the following
22 reasons:
23 a. The pharmacy benefits manager violated section 510B.8A.
24 b. The maximum allowable cost is below the pharmacy
25 acquisition cost.
26 2. The appeal process must include all of the following:
27 a. A dedicated telephone number at which a pharmacy may
28 contact the pharmacy benefits manager and speak directly with
29 an individual involved in the appeal process.
30 b. A dedicated electronic mail address or internet site for
31 the purpose of submitting an appeal directly to the pharmacy
32 benefits manager.
33 c. A period of at least seven business days after the date
34 of a pharmacy’s initial submission of a clean claim during
35 which the pharmacy may initiate an appeal.
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1 3. A pharmacy benefits manager shall respond to an appeal
2 within seven business days after the date on which the pharmacy
3 benefits manager receives the appeal.
4 a. If the pharmacy benefits manager grants a pharmacy