Senate Bill 582 introduced by eleven Senators on January 22, imposes additional conditions to the Pharmacy Audit Integrity Act — introduced earlier in House Bill 4058.
The addition defines “maximum allowable cost” to mean “a maximum drug product reimbursement for an individual drug or a group of therapeutically and pharmaceutically equivalent multiple source drugs that are listed in the United States food and drug administrations’s approval drug products with therapeutic equivalence evaluations, commonly referred to as the orange book.
“Maximum allowable cost” also includes all of the following:
(A) average acquisition cost, including national average drug acquisition cost;
(B) average manufacturer price; (C) average wholesale price;
(D) brand effective rate or generic effective rate:
(E) discount indexing;
(F) federal upper limits;
(G) wholesale acquisition cost; and
(G) any other term that a pharmacy benefit manager or an insurer may use to establish reimbursement rates to a pharmacist or pharmacy for pharmacist services.
Senate Bill 582 also defines “pharmacy benefit manager” to mean a person, business, or other entity that preforms pharmacy benefits management for covered entities: and includes a pharmacy benefit manager under contract with a medicaid managed care organization to provide pharmacy health benefit service or administration under the care management system established under 9-2-6 and 9-2-9 of this code.
Senate Bill 582 also prohibits a pharmacy benefit manager from any of the following:
(1) engage in spread pricing;
(2) directly or indirectly retoractively deny a claim or aggregate of claims after the claim or aggregate of claims has been adjudicated;
(3) reduce, directly or indirectly, payment to a pharmacy or pharmacist services to an effective rate of reimbursement, including permitting an insurer or plan sponsor to make such a reduction. As used in this subdivision, “effective rate of reimbursement” includes generic effective rates, brand effective rates, direct and indirect remuneration fees, or any other reduction or aggregate reduction or payment;
(4) pay or reimburse a pharmacy or pharmacist at an amount less than the national average drug acquisition cost or, if the national average acquisition cost is unavailable, the wholesale acquisition cost, for the ingredient drug product component of drugs provided by the pharmacists or pharmacy.
A pharmacy benefit manager shall report to the Insurance Commissioner the following:
(A) the aggregate amount of rebates received by the pharmacy benefit manager;
(B) the aggregate amount of rebates passed on the enrollees of each plan sponsor at the point of sale that reduced the enrollee’s applicable cost-sharing amount;
(C) the aggregate amount of rebates passed on to the enrollees of each plan sponsor at the point of sale that reduced the enrollee’s applicable cost-sharing amount;
(D) the individual and aggregate amount paid by the plan sponsor t the pharmacy benefit manager or pharmacist services itemized by pharmacy, by product, and by goods and services; (E) the individual and aggregate amount a pharmacy benefit manager paid for pharmacist services itemized by pharmacy, by product, and by goods and services.