Public Act 103-0453
 
HB3631 EnrolledLRB103 30054 BMS 56477 b


  
    AN ACT concerning regulation.
  
 
    Be it enacted by the People of the State of Illinois,
 
represented in the General Assembly:
  


 
 
    Section 5. The Illinois Insurance Code is amended  by 
changing Section 513b1 as follows:
 
    (215 ILCS 5/513b1)
    Sec. 513b1. Pharmacy benefit manager contracts.
    (a) As used in this Section: 
    "340B drug discount program" means the program established

under Section 340B of the federal Public Health Service Act, 
42 U.S.C. 256b. 
    "340B entity" means a covered entity as defined in 42 
U.S.C. 256b(a)(4) authorized to participate in the 340B drug 
discount program. 
    "340B pharmacy" means any pharmacy used to dispense 340B 
drugs for a covered entity, whether entity-owned or external. 
    "Biological product" has the meaning ascribed to that term 
in Section 19.5 of the Pharmacy Practice Act. 
    "Maximum allowable cost" means the maximum amount that a 
pharmacy benefit manager will reimburse a pharmacy for the 
cost of a drug. 
    "Maximum allowable cost list" means a list of drugs for 
which a maximum allowable cost has been established by a 
pharmacy benefit manager. 
    "Pharmacy benefit manager" means a person, business, or 
entity, including a wholly or partially owned or controlled 
subsidiary of a pharmacy benefit manager, that provides claims 
processing services or other prescription drug or device 
services, or both, for health benefit plans. 
    "Retail price" means the price an individual without 
prescription drug coverage would pay at a retail pharmacy, not 
including a pharmacist dispensing fee. 
    "Third-party payer" means any entity that pays for 
prescription drugs on behalf of a patient other than a health 
care provider or sponsor of a plan subject to regulation under 
Medicare Part D, 42 U.S.C. 1395w-101, et seq. 
    (b) A contract between a health insurer and a pharmacy 
benefit manager must require that the pharmacy benefit 
manager: 
        (1) Update maximum allowable cost pricing information 
    at least every 7 calendar days. 
        (2) Maintain a process that will, in a timely manner, 
    eliminate drugs from maximum allowable cost lists or 
    modify drug prices to remain consistent with changes in 
    pricing data used in formulating maximum allowable cost 
    prices and product availability. 
        (3) Provide access to its maximum allowable cost list 
    to each pharmacy or pharmacy services administrative 
    organization subject to the maximum allowable cost list.  
    Access may include a real-time pharmacy website portal to 
    be able to view the maximum allowable cost list.  As used in 
    this  Section, "pharmacy services administrative 
    organization" means an entity operating within the State 
    that contracts with independent pharmacies to conduct 
    business on their behalf with third-party payers.  A 
    pharmacy services administrative organization may provide 
    administrative services to pharmacies and negotiate and 
    enter into contracts with third-party payers or pharmacy 
    benefit managers on behalf of pharmacies. 
        (4) Provide a process by which a contracted pharmacy 
    can appeal the provider's reimbursement for a drug subject 
    to maximum allowable cost pricing.  The appeals process 
    must, at a minimum, include the following: 
            (A)  A requirement that a contracted pharmacy has 
        14 calendar days after the applicable fill date to 
        appeal a maximum allowable cost if the reimbursement 
        for the drug is less than the net amount that the 
        network provider paid to the supplier of the drug. 
            (B) A requirement that a pharmacy benefit manager 
        must respond to a challenge within 14 calendar days of 
        the contracted pharmacy making the claim for which the 
        appeal has been submitted.
            (C) A telephone number and e-mail address or 
        website to network providers, at which the provider 
        can contact the pharmacy benefit manager to process 
        and submit an appeal.
            (D) A requirement that, if an appeal is denied, 
        the pharmacy benefit manager must provide the reason 
        for the denial and the name and the national drug code 
        number from national or regional wholesalers.
            (E)  A requirement that, if an appeal is sustained, 
        the pharmacy benefit manager must make an adjustment 
        in the drug price effective the date the challenge is 
        resolved and make the adjustment applicable to all 
        similarly situated network pharmacy providers, as 
        determined by the managed care organization or 
        pharmacy benefit manager. 
        (5) Allow a plan sponsor contracting with a pharmacy 
    benefit manager an annual right to audit compliance with 
    the terms of the contract by the pharmacy benefit manager, 
    including, but not limited to, full disclosure of any and 
    all rebate amounts secured, whether product specific or 
    generalized rebates, that were provided to the pharmacy 
    benefit manager by a pharmaceutical manufacturer.
        (6) Allow a plan sponsor contracting with a pharmacy 
    benefit manager to request that the pharmacy benefit 
    manager disclose the actual amounts paid by the pharmacy 
    benefit manager to the pharmacy.
        (7)  Provide notice to the party contracting with the 
    pharmacy benefit manager of any consideration that the 
    pharmacy benefit manager receives from the manufacturer 
    for dispense as written prescriptions once a generic or 
    biologically similar product becomes available. 
    (c) In order to place a particular prescription drug on a 
maximum allowable cost list, the pharmacy benefit manager 
must, at a minimum, ensure that: 
        (1) if the drug is a generically equivalent drug, it 
    is listed as therapeutically equivalent and 
    pharmaceutically equivalent "A" or "B" rated in the United 
    States Food and Drug Administration's most recent version 
    of the "Orange Book" or have an NR or NA rating by 
    Medi-Span, Gold Standard, or a similar rating by a 
    nationally recognized reference; 
        (2) the drug is available for purchase by each 
    pharmacy in the State from national or regional 
    wholesalers operating in Illinois; and 
        (3) the drug is not obsolete. 
    (d) A pharmacy benefit manager is prohibited from limiting 
a pharmacist's ability to disclose whether the cost-sharing 
obligation exceeds the retail price for a covered prescription 
drug, and the availability of a more affordable alternative 
drug, if one is available in accordance with Section 42 of the 
Pharmacy Practice Act. 
    (e) A health insurer or pharmacy benefit manager shall not 
require an insured to make a payment for a prescription  drug at 
the point of sale in an amount that exceeds the lesser of: 
        (1) the applicable cost-sharing amount; or
        (2) the retail price of the drug in the absence of 
    prescription drug coverage. 
    (f) Unless required by law, a contract between a pharmacy 
benefit manager or third-party payer and a 340B entity or 340B 
pharmacy shall not contain any provision that: 
        (1) distinguishes between drugs purchased through the 
    340B drug discount program and other drugs when 
    determining reimbursement or reimbursement methodologies, 
    or contains otherwise less favorable payment terms or 
    reimbursement methodologies for 340B entities or 340B 
    pharmacies when compared to similarly situated non-340B 
    entities; 
        (2) imposes any fee, chargeback, or rate adjustment 
    that is not similarly imposed on similarly situated 
    pharmacies that are not  340B entities or 340B pharmacies; 
        (3) imposes any fee, chargeback, or rate adjustment 
    that exceeds the fee, chargeback, or rate adjustment that 
    is not similarly imposed on similarly situated pharmacies 
    that are not  340B entities or 340B pharmacies; 
        (4) prevents or interferes with an individual's choice 
    to receive a covered prescription drug from a 340B entity 
    or 340B pharmacy through any legally permissible means, 
    except that nothing in this paragraph shall prohibit the 
    establishment of differing copayments or other 
    cost-sharing amounts within the benefit plan for covered 
    persons who acquire covered prescription drugs from a 
    nonpreferred or nonparticipating provider; 
        (5) excludes a 340B entity or 340B pharmacy from a 
    pharmacy network on any basis that includes consideration 
    of whether the 340B entity or 340B pharmacy participates 
    in the 340B drug discount program; 
        (6) prevents a 340B entity or 340B pharmacy from using 
    a drug purchased under the 340B drug discount program; or 
        (7) any other provision that discriminates against a 
    340B entity or 340B pharmacy by treating the 340B entity 
    or 340B pharmacy differently than non-340B entities or 
    non-340B pharmacies for any reason relating to the 
    entity's participation in the 340B drug discount program. 
    As used in this subsection, "pharmacy benefit manager" and 
"third-party payer" do not include pharmacy benefit managers 
and third-party payers acting on behalf of a Medicaid program. 
    (g) A violation of this Section by a pharmacy benefit 
manager constitutes an unfair or deceptive act or practice in 
the business of insurance under Section 424. 
    (h) A provision that violates subsection (f) in a contract 
between a pharmacy benefit manager or a third-party payer and 
a 340B entity that is entered into, amended, or renewed after 
July 1, 2022 shall be void and unenforceable. 
    (i)(1) A pharmacy benefit manager may not retaliate 
against a pharmacist or pharmacy for disclosing information in 
a court, in an administrative hearing, before a legislative 
commission or committee, or in any other proceeding, if the 
pharmacist or pharmacy has reasonable cause to believe that 
the disclosed information is evidence of a violation of a 
State or federal law, rule, or regulation.
    (2)  A pharmacy benefit manager may not retaliate against a 
pharmacist or pharmacy for disclosing information to a 
government or law enforcement agency, if the pharmacist or 
pharmacy has reasonable cause to believe that the disclosed 
information is evidence of a violation of a State or federal 
law, rule, or regulation.
    (3)  A pharmacist or pharmacy shall make commercially 
reasonable efforts to limit the disclosure of confidential and 
proprietary information.
    (4) Retaliatory actions against a pharmacy or pharmacist 
include cancellation of, restriction of, or refusal to renew 
or offer a contract to a pharmacy solely because the pharmacy 
or pharmacist has:
        (A) made disclosures of information that the 
    pharmacist or pharmacy has reasonable cause to believe is 
    evidence of a violation of a State or federal law, rule, or 
    regulation;
        (B) filed complaints with the plan or pharmacy benefit 
    manager; or
        (C) filed complaints against the plan or pharmacy 
    benefit manager with the Department.
    (j) (i) This Section applies to contracts entered into or 
renewed on or after July 1, 2022. 
    (k) (j) This Section applies to any group or individual 
policy of accident and health insurance or managed care plan 
that provides coverage for prescription drugs and that is 
amended, delivered, issued, or renewed on or after July 1, 
2020. 

(Source: P.A. 101-452, eff. 1-1-20; 102-778, eff. 7-1-22; 
revised 8-19-22.)


 
    Section 99. Effective date. This Act takes effect July 1, 
2023.

Effective Date:  8/4/2023