Bill Summary for S 257 (2021)

Summary date: 

Sep 8 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

Conference report makes the following changes to the 5th edition. 

Replaces the definition given to the new defined term 340B covered entity, applicable to Article 56A, Pharmacy Benefits Management, of GS Chapter 58. Now more specifically defines the term to mean any entity defined in one of nine identified sub-subdivisions of 42 USC 256b(a)(4), rather than any entity defined in that subdivision. Defines pharmacy by statutory cross-reference rather than as a pharmacy registered with the NC Board of Pharmacy. Limits the term pharmacy benefits manager affiliate to no longer include a pharmacy or pharmacist that is under common ownership or control with a pharmacy benefits manager. Renames the defined term pharmacy services administration organization as pharmacy service administrative organization (PSAO), and makes conforming changes throughout to reflect the change. No longer includes biosimilar or other prescription drug or device services in the Article's defined terms. Makes technical changes. 

Maintains rather than amends existing law regarding consumer protections set forth in subsections (a) and (b) of GS 58-56A-3, which prohibit (1) pharmacies and pharmacists from penalizing (previously, expanded to include prohibiting, restricting, or penalizing) pharmacy benefits managers from discussing the insured's cost share of prescription drugs, or selling a lower-priced drug to the insured, and (2) pharmacy benefits manager from contracting to prohibit (was, to prohibit or restrict) a pharmacy from offering and providing direct and limited delivery services to an insured as an ancillary service of the pharmacy, as set forth in the contract between the pharmacy benefits manager and the pharmacy. Revises the remaining provisions as follows. Eliminates the five additional prohibitions of pharmacy benefits managers contracting with pharmacies previously added to subsection (b), including contracting to prohibit or restrict the pharmacy from 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, or discussing information relating to the total costs for pharmacist services for a prescription drug. Eliminates the proposed provision which prohibited a pharmacy benefits manager from penalizing or retaliating against a pharmacy for any activities described in subsection (b). Now 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 total submitted charged by the network pharmacy (was, prohibited from charging or attempting to collect 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). Replaces proposed new subsection (c1), which added 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. Instead, requires the insurer or pharmacy benefits manager to include in the calculation of any out-of-pocket maximum, deductible, copayment, coinsurance, or other applicable cost-sharing requirement, any amounts paid by the insured or on the insured's behalf for a prescription that is either without an AB-rated generic equivalent, or with an AB-rated generic equivalent and the insured has obtained authorization for the drug through one of three methods. Defines generic equivalent; excludes a drug listed by the FDA as having unresolved bioequivalence concerns as specified. Eliminates the provisions of proposed subsections (f) through (i), which: prohibited 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; provided 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; prohibited 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; and barred 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, set out in GS 58-56A-4. Prohibits charging fees or adjustments for the receipt and processing of a claim or its adjudication without a justification on the remittance advice or as set out in contract and agreed upon by the pharmacy or pharmacist for each adjustment or fee (previously, limited to justification on the remittance advice only). Maintains existing law which exempts from the application of the protections provided for pharmacies and pharmacists, claims under an employee benefits plan under the Employee Retirement Income Security Act of 1974 (previously, qualified the explicit application of the protections under such plans to the extent such application is allowed under federal law). Further specifies that a pharmacy or pharmacist cannot be prohibited by a pharmacy benefits manager from dispensing any prescription drug allowed under licensure, including dispensing specialty drugs dispensed by a credentialed and accredited pharmacy (previously, removed the specification of specialty drugs dispensed by a credentialed and accredited pharmacy). Reinstates the previously proposed provision including a 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. Eliminates previously proposed subsection (g) and (h), which: prohibited 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; and barred pharmacy benefits managers from requiring the use of mail order or a pharmacy benefits manager affiliate for filling prescriptions. 

Eliminates proposed new subsections (b1) and (e) of GS 58-56A-5, which: required 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; and barred 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. 

Eliminates proposed GS 58-56A-6, which required a health benefit plan or pharmacy benefits manager that authorizes coverage for a biosimilar of a prescription medication to authorize coverage for all biosimilars of that prescription medication with coverage at the same level, and prohibited a health benefit plan or pharmacy benefits manager from requiring the use or the dispensing of a reference product over a biosimilar. 

Eliminates GS 58-56A-10, which prohibited 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. 

Replaces the provisions governing pharmacy benefits manager networks set out in proposed GS 58-56A-15 with the following. Now prohibits pharmacy benefits managers from denying properly licensed pharmacists or pharmacies from participating in a retail pharmacy network on the same terms and conditions of other similarly situated network participants. Entitles pharmacists or pharmacies that are members of a PSAO that contracts with a health benefit plan issuer or pharmacy benefits manager on the pharmacy's behalf to receive from the PSAO a copy of the contract provisions application to the pharmacy, including the pharmacy's rights and obligations under the contract. Provides for continued liability for payment due for services rendered following termination of a pharmacist or pharmacy from a pharmacy benefits manager network, excluding cases of fraud, waste and abuse. 

Eliminates the proposed new provisions regarding penalties for violations of the Article as follows, no longer requiring the Commissioner of Insurance to consider specified factors in determining the amount of a civil penalty for a violation of the Article (other than violations GS 58-56A-5, which governs the maximum allowable cost price of prescription drugs).

Adds a new directive requiring the Department of Insurance to convene a stakeholder workgroup by December 1, 2021, to study and recommend a single, unified process to accredit specialty pharmacies in the State. States required membership of the workgroup and requires the workgroup to meet at least three times. Charges the workgroup with examining the regulatory, administrative, and financial challenges facing those who wish to gain specialty pharmacy status. Requires the workgroup to report to the specified NCGA committees by May 15, 2022. 

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