Bill Summary for S 257 (2021)

Summary date: 

Aug 18 2021

Bill Information:

View NCGA Bill Details2021
Senate Bill 257 (Public) Filed Thursday, March 11, 2021
AN ACT TO PROMOTE PRICING TRANSPARENCY FOR PATIENTS AND TO ESTABLISH STANDARDS AND CRITERIA FOR THE REGULATION AND LICENSURE OF PHARMACY BENEFITS MANAGERS PROVIDING SERVICES FOR HEALTH BENEFIT PLANS IN NORTH CAROLINA.
Intro. by Perry, Britt, Johnson.

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Bill summary

House committee substitute makes the following changes to the 3rd edition. 

Amends and adds to the proposed changes to Article 56A, Pharmacy Benefits Management, of GS Chapter 58 as follows.

Adds to the defined terms: biosimilar and other prescription drug or device services. No longer includes a statutory cross-reference to define pharmacy. Now defines pharmacy services administration organization as an organization that assists community pharmacists and pharmacy benefits managers or third-party payors in achieving administrative efficiencies, including contracting and payment efficiencies. Expands the term pharmacy benefits manager affiliate to include a pharmacy or pharmacist that is under common ownership or control with a pharmacy benefits manager. Makes additional clarifying and technical changes.

Adds a new provision to direct the Commissioner of Insurance to adopt rules establishing the licensing and reporting requirements of pharmacy benefits managers consistent with the Article. 

Expands the Article's provisions regarding consumer protections to prohibit pharmacies and pharmacists from prohibiting, restricting, or penalizing (previously, prohibited penalizing only) pharmacy benefits managers from discussing the insured's cost share of prescription drugs, or selling a lower-priced drug to the insured. Additionally, now prohibits a pharmacy benefits manager from contracting to prohibit or restrict a pharmacy from taking six actions, including (1) offering and providing direct and limited delivery services to an insured as an ancillary service of the pharmacy, (2) disclosing to any insured any health care information that the pharmacy or pharmacist determines is appropriate so long as it is within the pharmacist's scope of practice, (3) discussing information relating to the total costs for pharmacist services for a prescription drug, and (4) selling a more affordable alternative of the prescription drug to the insured if available. Adds a new restriction to prohibit a pharmacy benefits manager from penalizing or retaliating against a pharmacy for any of these six activities. No longer requires the pharmacy or pharmacist to disclose that a shipping and handling fee for mailed or delivered prescriptions is agreed to by the health benefit plan or pharmacy benefits manager. Now prohibits the pharmacy benefits manager from charging or attempting to collect from an insured a copayment that exceeds the lesser of (1) the total submitted charges by the network pharmacy; (2) the contracted copayment amount; or (3) the amount an individual would pay for a prescription drug if that individual was not insured and was paying cash for the prescription drug (was, prohibited from charging or attempting to collect a copayment that exceeds the total submitted charged by the network pharmacy). Adds the following new requirements and restrictions. Adds a new requirement for an insurer to include any amounts paid by the insured or paid on behalf of the insured by another person when calculating an insured's overall contribution to any out-of-pocket maximum or any cost-sharing requirement under a health benefit plan, to the extent allowed under state and federal law. Prohibits a pharmacy benefits manager from causing or knowingly permitting the use of any advertisement, promotion, solicitation, representation, proposal, or offer that is untrue, deceptive, or misleading; knowingly making any misrepresentation; or requiring an insured to use a pharmacy benefits manager affiliate for the filling of a prescription or the provision of any pharmacy care services. Provides that an insured cannot be restricted from using any in-network pharmacy or pharmacist for any prescription drug covered by the health benefit plan or pharmacy benefits manager applicable. Prohibits a pharmacy benefits manager from contracting to prohibit a pharmacy from discussing information relating to the total cost for pharmacist services for a prescription drug, or from selling a more affordable alternative to the insured if a more affordable alternative is available. Lastly, bars a pharmacy benefits manager from prohibiting a pharmacy or pharmacist from sharing proprietary or confidential information. 

Makes the following modifications regarding pharmacy and pharmacist protections. Prohibits charging fees or adjustments for the receipt and processing of a claim or its adjudication without a justification on the remittance advice (was, or as set out in contract and agreed upon by the pharmacy or pharmacist for each adjustment or fee). Qualifies the explicit application of the protections provided for pharmacies and pharmacists to claims under an employee benefits plan under the Employee Retirement Income Security Act of 1974 to the extent such application is allowed under federal law. Further specifies that a pharmacy or pharmacist cannot be restricted in any way by a pharmacy benefits manager from dispensing any prescription drug allowed under licensure, including dispensing specialty drugs (no longer specifying specialty drugs dispensed by a credentialed and accredited pharmacy). No longer includes the pharmacy or pharmacist's agreement to an adjustment in situations that warrant retroactive denial or reduction of a claim for pharmacist services after adjudication of the claim. Adds the following. Prohibits a pharmacy benefits manager from engaging in the pattern or practice of reimbursing independent pharmacies and pharmacists in the state consistently less than the amount of the National Drug Average Acquisition Cost (NDAAC) or the amount that the pharmacy benefits manager reimburses a pharmacy benefits affiliate for providing the same pharmacist services. Bars pharmacy benefits managers from requiring the use of mail order or a pharmacy benefits manager affiliate for filling prescriptions. 

Adds the following requirements regarding the maximum allowable cost price for prescription drugs. Requires a pharmacy benefits manager to update its maximum allowable cost list for a prescription drug within five calendar days and provide notice to contracted pharmacies within 72 business hours of the update if any of three described circumstances exist, including when (1) at least 60% of the pharmaceutical wholesalers doing business in the state have increased by 10% or more the pharmacy acquisition cost for the drug or (2) there is a change in the method on which the maximum allowable cost is based. Additionally bars a pharmacy benefits manager from engaging in a pattern or practice of reimbursing independent pharmacies or pharmacists consistently less than the amount of the NDAAC, the Wholesale Acquisition Cost when the NDAAC is not available, or an amount that the pharmacy benefits manager reimburses a pharmacy benefits manager affiliate for providing the same pharmacist services. 

Adds a new statute to the Article. Requires a health benefit plan or pharmacy benefits manager that authorizes coverage for a biosimilar, as defined, of a prescription medication to authorize coverage for all biosimilars of that prescription medication with coverage at the same level. Prohibits a health benefit plan or pharmacy benefits manager from requiring the use or the dispensing of a reference product over a biosimilar. 

Adds a new statute to the Article prohibiting pharmacy benefits managers or insurers from requiring any prescription medication to be obtained from an entity operating as an intermediary to have prescription medications administered or delivered to a patient or another pharmacy, hospital, clinic, or provider unless that entity is a pharmacy operating as an intermediary and meets five criteria, including (1) having a mutual agreement between the patient, the intermediary, and the other pharmacy, hospital, clinic, or provider to use the process for the receipt, repackaging, administration, or delivery of the prescription medication; (2) having the distribution of prescription medications from the intermediary be in full and actual charge of a licensed pharmacist; and (3) having the pharmacy, hospital, clinic, or provider and the intermediary in compliance with all relevant rules adopted by the NC Board of Pharmacy. 

Now prohibits pharmacy benefits managers from changing the network of pharmacies available to an insured without the insured or the insurer's written consent. Bars pharmacy benefits managers from creating separate pharmacy networks under a specific health benefit plan. Prohibits a pharmacy benefits manager from conditioning participation in a pharmacy benefits manager network upon accreditation standards or recertification requirements inconsistent with, more stringent than, or in addition to federal and State licensure requirements. Previously, entitled a pharmacist or pharmacy that is a member of a pharmacy service administration organization that enters into a contract with a health benefit plan issuer or a pharmacy benefits manager on the pharmacy's behalf to receive from the pharmacy service administration organization a copy of the contract provisions applicable to the pharmacy, including each provision relating to the pharmacy's rights and obligations under the contract. Replaces the provision, now requiring a pharmacist or pharmacy that belongs to a pharmacy service administration organization to receive a copy of the contract the pharmacy service administration organization entered into with a pharmacy benefits manager on the pharmacy's or pharmacist's behalf, upon request only. Regarding the continued obligation of payments due to pharmacies or pharmacists upon termination from the pharmacy benefits manager network, no longer excludes cases of fraud, waste, and abuse. 

Adds a new statute to the Article requiring a pharmacy benefits manager to provide an insurer offering a health benefit plan that contracts with a pharmacy benefits manager the claims data that reflects the total amount the insurer paid to the pharmacy benefits manager under the plan for a specified outpatient prescription drug, including the ingredient cost and the dispensing fee, upon request. Requires providing the cost paid for the specified outpatient prescription drug, including the ingredient cost and the dispensing fee. 

Adds to the provisions regarding penalties for violations of the Article as follows. Requires the Commissioner to consider the following in determining the amount of a civil penalty for a violation of the Article (other than GS 58-56A-5, which governs the maximum allowable cost price of prescription drugs): the degree and extent of harm caused by the violation; the amount of money that inured to the benefit of the violator as a result of the violation; whether the violation was willful; and the prior record of the violator in complying with laws, rules, or orders applicable to the violator. Adds further guidance and clarifications applicable to civil penalties imposed under the Article. 

Makes further technical changes. 

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