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