101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
SB3740

 

Introduced 2/14/2020, by Sen. Andy Manar

 

SYNOPSIS AS INTRODUCED:
 
215 ILCS 5/513b1

    Amends the Illinois Insurance Code. Provides that a pharmacy benefit manager shall pay the full amount paid by a health insurer or health benefit plan for prescription drug coverage to a pharmacy for such prescription drugs, less the amount of the pharmacy benefit manager's administrative costs. Effective immediately.


LRB101 20154 BMS 69693 b

 

 

A BILL FOR

 

SB3740LRB101 20154 BMS 69693 b

1    AN ACT concerning regulation.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Insurance Code is amended by
5changing Section 513b1 as follows:
 
6    (215 ILCS 5/513b1)
7    Sec. 513b1. Pharmacy benefit manager contracts.
8    (a) As used in this Section:
9    "Biological product" has the meaning ascribed to that term
10in Section 19.5 of the Pharmacy Practice Act.
11    "Maximum allowable cost" means the maximum amount that a
12pharmacy benefit manager will reimburse a pharmacy for the cost
13of a drug.
14    "Maximum allowable cost list" means a list of drugs for
15which a maximum allowable cost has been established by a
16pharmacy benefit manager.
17    "Pharmacy benefit manager" means a person, business, or
18entity, including a wholly or partially owned or controlled
19subsidiary of a pharmacy benefit manager, that provides claims
20processing services or other prescription drug or device
21services, or both, for health benefit plans.
22    "Retail price" means the price an individual without
23prescription drug coverage would pay at a retail pharmacy, not

 

 

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1including a pharmacist dispensing fee.
2    (b) A contract between a health insurer and a pharmacy
3benefit manager must require that the pharmacy benefit manager:
4        (1) Update maximum allowable cost pricing information
5    at least every 7 calendar days.
6        (2) Maintain a process that will, in a timely manner,
7    eliminate drugs from maximum allowable cost lists or modify
8    drug prices to remain consistent with changes in pricing
9    data used in formulating maximum allowable cost prices and
10    product availability.
11        (3) Provide access to its maximum allowable cost list
12    to each pharmacy or pharmacy services administrative
13    organization subject to the maximum allowable cost list.
14    Access may include a real-time pharmacy website portal to
15    be able to view the maximum allowable cost list. As used in
16    this Section, "pharmacy services administrative
17    organization" means an entity operating within the State
18    that contracts with independent pharmacies to conduct
19    business on their behalf with third-party payers. A
20    pharmacy services administrative organization may provide
21    administrative services to pharmacies and negotiate and
22    enter into contracts with third-party payers or pharmacy
23    benefit managers on behalf of pharmacies.
24        (4) Provide a process by which a contracted pharmacy
25    can appeal the provider's reimbursement for a drug subject
26    to maximum allowable cost pricing. The appeals process

 

 

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1    must, at a minimum, include the following:
2            (A) A requirement that a contracted pharmacy has 14
3        calendar days after the applicable fill date to appeal
4        a maximum allowable cost if the reimbursement for the
5        drug is less than the net amount that the network
6        provider paid to the supplier of the drug.
7            (B) A requirement that a pharmacy benefit manager
8        must respond to a challenge within 14 calendar days of
9        the contracted pharmacy making the claim for which the
10        appeal has been submitted.
11            (C) A telephone number and e-mail address or
12        website to network providers, at which the provider can
13        contact the pharmacy benefit manager to process and
14        submit an appeal.
15            (D) A requirement that, if an appeal is denied, the
16        pharmacy benefit manager must provide the reason for
17        the denial and the name and the national drug code
18        number from national or regional wholesalers.
19            (E) A requirement that, if an appeal is sustained,
20        the pharmacy benefit manager must make an adjustment in
21        the drug price effective the date the challenge is
22        resolved and make the adjustment applicable to all
23        similarly situated network pharmacy providers, as
24        determined by the managed care organization or
25        pharmacy benefit manager.
26        (5) Allow a plan sponsor contracting with a pharmacy

 

 

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1    benefit manager an annual right to audit compliance with
2    the terms of the contract by the pharmacy benefit manager,
3    including, but not limited to, full disclosure of any and
4    all rebate amounts secured, whether product specific or
5    generalized rebates, that were provided to the pharmacy
6    benefit manager by a pharmaceutical manufacturer.
7        (6) Allow a plan sponsor contracting with a pharmacy
8    benefit manager to request that the pharmacy benefit
9    manager disclose the actual amounts paid by the pharmacy
10    benefit manager to the pharmacy.
11        (7) Provide notice to the party contracting with the
12    pharmacy benefit manager of any consideration that the
13    pharmacy benefit manager receives from the manufacturer
14    for dispense as written prescriptions once a generic or
15    biologically similar product becomes available.
16    (c) In order to place a particular prescription drug on a
17maximum allowable cost list, the pharmacy benefit manager must,
18at a minimum, ensure that:
19        (1) if the drug is a generically equivalent drug, it is
20    listed as therapeutically equivalent and pharmaceutically
21    equivalent "A" or "B" rated in the United States Food and
22    Drug Administration's most recent version of the "Orange
23    Book" or have an NR or NA rating by Medi-Span, Gold
24    Standard, or a similar rating by a nationally recognized
25    reference;
26        (2) the drug is available for purchase by each pharmacy

 

 

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1    in the State from national or regional wholesalers
2    operating in Illinois; and
3        (3) the drug is not obsolete.
4    (d) A pharmacy benefit manager is prohibited from limiting
5a pharmacist's ability to disclose whether the cost-sharing
6obligation exceeds the retail price for a covered prescription
7drug, and the availability of a more affordable alternative
8drug, if one is available in accordance with Section 42 of the
9Pharmacy Practice Act.
10    (e) A health insurer or pharmacy benefit manager shall not
11require an insured to make a payment for a prescription drug at
12the point of sale in an amount that exceeds the lesser of:
13        (1) the applicable cost-sharing amount; or
14        (2) the retail price of the drug in the absence of
15    prescription drug coverage.
16    (f) A pharmacy benefit manager shall pay the full amount
17paid by a health insurer or health benefit plan for
18prescription drug coverage to a pharmacy for such prescription
19drugs, less the amount of the pharmacy benefit manager's
20administrative costs.
21    (g) (f) This Section applies to contracts entered into or
22renewed on or after the effective date of this amendatory Act
23of the 101st General Assembly July 1, 2020.
24    (h) (g) This Section applies to any group or individual
25policy of accident and health insurance or managed care plan
26that provides coverage for prescription drugs and that is

 

 

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1amended, delivered, issued, or renewed on or after the
2effective date of this amendatory Act of the 101st General
3Assembly July 1, 2020.
4(Source: P.A. 101-452, eff. 1-1-20.)
 
5    Section 99. Effective date. This Act takes effect upon
6becoming law.