2022 -- S 2069

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LC003764

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2022

____________

A N   A C T

RELATING TO BUSINESSES AND PROFESSIONS -- PHARMACIES

     

     Introduced By: Senator Joshua Miller

     Date Introduced: January 25, 2022

     Referred To: Senate Health & Human Services

     It is enacted by the General Assembly as follows:

1

     SECTION 1. Chapter 5-19.1 of the General Laws entitled "Pharmacies" is hereby amended

2

by adding thereto the following section:

3

     5-19.1-36. Maximum allowable cost lists.

4

     (a) As used in this section:

5

     (1) "Maximum allowable cost list" means a listing of drugs used by a pharmacy benefits

6

manager setting the maximum allowable cost on which reimbursement to a pharmacy or pharmacist

7

may be based;

8

     (2) "Pharmaceutical wholesaler" means a person or entity that sells and distributes

9

prescription pharmaceutical products, including without limitation a full line of brand-name,

10

generic, and over-the-counter pharmaceuticals, and that offers regular and private delivery to a

11

pharmacy;

12

     (3) "Pharmacist" means a pharmacist in charge as defined in § 5-19.1-2;

13

     (4) "Pharmacist services" means products, goods, or services provided as a part of the

14

practice of pharmacy in Rhode Island;

15

     (5) "Pharmacy" means that portion or part of a premise where prescriptions are

16

compounded and dispensed as defined in § 5-19.1-2;

17

     (6) "Pharmacy acquisition cost" means the amount that a pharmaceutical wholesaler

18

charges for a pharmaceutical product as listed on the pharmacy's billing invoice;

19

     (7) "Pharmacy benefits manager" means an entity that administers or manages a pharmacy

 

1

benefits plan or program;

2

     (8) "Pharmacy benefits manager affiliate" means a pharmacy or pharmacist that directly or

3

indirectly, through one or more intermediaries owns or controls, is owned or controlled by, or is

4

under common ownership or control with a pharmacy benefits manager; and

5

     (9) "Pharmacy benefits plan or program" means a plan or program that pays for,

6

reimburses, covers the cost of, or otherwise provides for pharmacist services to individuals who

7

reside in or are employed in this state.

8

     (b) Before a pharmacy benefits manager places or continues a particular drug on a

9

maximum allowable cost list, the drug shall:

10

     (1) Be listed as therapeutically equivalent and pharmaceutically equivalent "A", "AB", or

11

"B" rated in the United States Food and Drug Administration’s most recent version of the "Orange

12

Book" or "Green Book" or has an NR or NA rating by Medi-spanTM, Gold Standard, or a similar

13

rating by a nationally recognized reference;

14

     (2) Be available for purchase by each pharmacy in the state from national or regional

15

wholesalers operating in Rhode Island; and

16

     (3) Not be obsolete.

17

     (c) A pharmacy benefits manager shall:

18

     (1) Provide access to its maximum allowable cost list to each pharmacy subject to the

19

maximum allowable cost list;

20

     (2) Update its maximum allowable cost list on a timely basis, but in no event longer than

21

seven (7) calendar days from an increase of ten percent (10%) or more in the pharmacy acquisition

22

cost from sixty percent (60%) or more of the pharmaceutical wholesalers doing business in the

23

state, or a change in the methodology on which the maximum allowable cost list is based, or in the

24

value of a variable involved in the methodology;

25

     (3) Provide a process for each pharmacy subject to the maximum allowable cost list to

26

receive prompt notification of an update to the maximum allowable cost list; and

27

     (4)(i) Provide a reasonable administrative appeal procedure to allow pharmacies to

28

challenge maximum allowable costs and reimbursements made under a maximum allowable cost

29

for a specific drug or drugs as:

30

     (A) Not meeting the requirements of this section; or

31

     (B) Being below pharmacy acquisition cost.

32

     (ii) The reasonable administrative appeal procedure shall include the following terms and

33

conditions:

34

     (A) A dedicated telephone number and email address or website for the purpose of

 

LC003764 - Page 2 of 25

1

submitting administrative appeals;

2

     (B) The ability to submit an administrative appeal directly to the pharmacy benefits

3

manager regarding the pharmacy benefits plan or program or through a pharmacy service

4

administrative organization; and

5

     (C) No less than seven (7) business days to file an administrative appeal.

6

     (d) The pharmacy benefits manager shall respond to the challenge under subsection

7

(c)(4)(i) of this section within seven (7) business days after receipt of the challenge.

8

     (e) If a challenge is under subsection (c)(4)(i) of this section, the pharmacy benefits

9

manager shall within seven (7) business days after receipt of the challenge either:

10

     (1) If the appeal is upheld:

11

     (i) Make the change in the maximum allowable cost;

12

     (ii) Permit the challenging pharmacy or pharmacist to reverse and rebill the claim in

13

question;

14

     (iii) Provide the national drug code number that the increase or change is based on to the

15

pharmacy or pharmacist; and

16

     (iv) Make the change under subsection (e)(1)(i) of this section effective for each similarly

17

situated pharmacy as defined by the payor subject to the maximum allowable cost list.

18

     (2) If the appeal is denied, the pharmacy benefits manager shall provide the challenging

19

pharmacy or pharmacist the national drug code number and the name of the national or regional

20

pharmaceutical wholesalers operating in this state that have the drug currently in stock at a price

21

below the maximum allowable cost list; or

22

     (3) If the national drug code number provided by the pharmacy benefits manager is not

23

available below the pharmacy acquisition cost from the pharmaceutical wholesaler from whom the

24

pharmacy or pharmacist purchases the majority of prescription drugs for resale, then the pharmacy

25

benefits manager shall adjust the maximum allowable cost list above the challenging pharmacy's

26

pharmacy acquisition cost and permit the pharmacy to reverse and rebill each claim affected by the

27

inability to procure the drug at a cost that is equal to or less than the previously challenged

28

maximum allowable cost.

29

     (f)(1) A pharmacy benefits manager shall not reimburse a pharmacy or pharmacist in this

30

state an amount less than the amount that the pharmacy benefits manager reimburses a pharmacy

31

benefits manager affiliate for providing the same pharmacist services.

32

     (2) The reimbursement amount shall be calculated on a per unit basis based on the same

33

generic product identifier or generic code number.

34

     (g) A pharmacy or pharmacist may decline to provide the pharmacist services to a patient

 

LC003764 - Page 3 of 25

1

or pharmacy benefits manager if, as a result of a maximum allowable cost list, a pharmacy or

2

pharmacist is to be paid less than the pharmacy acquisition cost of the pharmacy providing

3

pharmacist services.

4

     (h) This section shall apply to a pharmacy benefits manager employed by the Rhode Island

5

Medicaid program and its contracted managed care entities.

6

     (i) A violation of this section is a deceptive practice under § 6-13.1-2.

7

     (j) The department of health may promulgate such rules and regulations as are necessary

8

and proper to effectuate the purpose and for the efficient administration and enforcement of this

9

chapter.

10

     SECTION 2. Chapter 27-18 of the General Laws entitled "Accident and Sickness Insurance

11

Policies" is hereby amended by adding thereto the following section:

12

     27-18-33.3. Maximum allowable cost lists.

13

     (a) As used in this section:

14

     (1) "Maximum allowable cost list" means a listing of drugs used by a pharmacy benefits

15

manager setting the maximum allowable cost on which reimbursement to a pharmacy or pharmacist

16

may be based;

17

     (2) "Pharmaceutical wholesaler" means a person or entity that sells and distributes

18

prescription pharmaceutical products, including without limitation a full line of brand-name,

19

generic, and over-the-counter pharmaceuticals, and that offers regular and private delivery to a

20

pharmacy;

21

     (3) "Pharmacist" means a pharmacist in charge as defined in § 5-19.1-2;

22

     (4) "Pharmacist services" means products, goods, or services provided as a part of the

23

practice of pharmacy in Rhode Island;

24

     (5) "Pharmacy" means that portion or part of a premise where prescriptions are

25

compounded and dispensed as defined in § 5-19.1-2;

26

     (6) "Pharmacy acquisition cost" means the amount that a pharmaceutical wholesaler

27

charges for a pharmaceutical product as listed on the pharmacy's billing invoice;

28

     (7) "Pharmacy benefits manager" means an entity that administers or manages a pharmacy

29

benefits plan or program;

30

     (8) "Pharmacy benefits manager affiliate" means a pharmacy or pharmacist that directly or

31

indirectly, through one or more intermediaries owns or controls, is owned or controlled by, or is

32

under common ownership or control with a pharmacy benefits manager; and

33

     (9) "Pharmacy benefits plan or program" means a plan or program that pays for,

34

reimburses, covers the cost of, or otherwise provides for pharmacist services to individuals who

 

LC003764 - Page 4 of 25

1

reside in or are employed in this state.

2

     (b) Before a pharmacy benefits manager places or continues a particular drug on a

3

maximum allowable cost list, the drug shall:

4

     (1) Be listed as therapeutically equivalent and pharmaceutically equivalent "A", "AB", or

5

"B" rated in the United States Food and Drug Administration’s most recent version of the "Orange

6

Book" or "Green Book" or has an NR or NA rating by Medi-spanTM, Gold Standard, or a similar

7

rating by a nationally recognized reference;

8

     (2) Be available for purchase by each pharmacy in the state from national or regional

9

wholesalers operating in Rhode Island; and

10

     (3) Not be obsolete.

11

     (c) A pharmacy benefits manager shall:

12

     (1) Provide access to its maximum allowable cost list to each pharmacy subject to the

13

maximum allowable cost list;

14

     (2) Update its maximum allowable cost list on a timely basis, but in no event longer than

15

seven (7) calendar days from an increase of ten percent (10%) or more in the pharmacy acquisition

16

cost from sixty percent (60%) or more of the pharmaceutical wholesalers doing business in the

17

state, or a change in the methodology on which the maximum allowable cost list is based, or in the

18

value of a variable involved in the methodology;

19

     (3) Provide a process for each pharmacy subject to the maximum allowable cost list to

20

receive prompt notification of an update to the maximum allowable cost list; and

21

     (4)(i) Provide a reasonable administrative appeal procedure to allow pharmacies to

22

challenge maximum allowable costs and reimbursements made under a maximum allowable cost

23

for a specific drug or drugs as:

24

     (A) Not meeting the requirements of this section; or

25

     (B) Being below pharmacy acquisition cost.

26

     (ii) The reasonable administrative appeal procedure shall include the following terms and

27

conditions:

28

     (A) A dedicated telephone number and email address or website for the purpose of

29

submitting administrative appeals;

30

     (B) The ability to submit an administrative appeal directly to the pharmacy benefits

31

manager regarding the pharmacy benefits plan or program or through a pharmacy service

32

administrative organization; and

33

     (C) No less than seven (7) business days to file an administrative appeal.

34

     (d) The pharmacy benefits manager shall respond to the challenge under subsection

 

LC003764 - Page 5 of 25

1

(c)(4)(i) of this section within seven (7) business days after receipt of the challenge.

2

     (e) If a challenge is under subsection (c)(4)(i) of this section, the pharmacy benefits

3

manager shall within seven (7) business days after receipt of the challenge either:

4

     (1) If the appeal is upheld:

5

     (i) Make the change in the maximum allowable cost;

6

     (ii) Permit the challenging pharmacy or pharmacist to reverse and rebill the claim in

7

question;

8

     (iii) Provide the national drug code number that the increase or change is based on to the

9

pharmacy or pharmacist; and

10

     (iv) Make the change under subsection (e)(1)(i) of this section effective for each similarly

11

situated pharmacy as defined by the payor subject to the maximum allowable cost list.

12

     (2) If the appeal is denied, the pharmacy benefits manager shall provide the challenging

13

pharmacy or pharmacist the national drug code number and the name of the national or regional

14

pharmaceutical wholesalers operating in this state that have the drug currently in stock at a price

15

below the maximum allowable cost list; or

16

     (3) If the national drug code number provided by the pharmacy benefits manager is not

17

available below the pharmacy acquisition cost from the pharmaceutical wholesaler from whom the

18

pharmacy or pharmacist purchases the majority of prescription drugs for resale, then the pharmacy

19

benefits manager shall adjust the maximum allowable cost list above the challenging pharmacy's

20

pharmacy acquisition cost and permit the pharmacy to reverse and rebill each claim affected by the

21

inability to procure the drug at a cost that is equal to or less than the previously challenged

22

maximum allowable cost.

23

     (f)(1) A pharmacy benefits manager shall not reimburse a pharmacy or pharmacist in this

24

state an amount less than the amount that the pharmacy benefits manager reimburses a pharmacy

25

benefits manager affiliate for providing the same pharmacist services.

26

     (2) The reimbursement amount shall be calculated on a per unit basis based on the same

27

generic product identifier or generic code number.

28

     (g) A pharmacy or pharmacist may decline to provide the pharmacist services to a patient

29

or pharmacy benefits manager if, as a result of a maximum allowable cost list, a pharmacy or

30

pharmacist is to be paid less than the pharmacy acquisition cost of the pharmacy providing

31

pharmacist services.

32

     (h) This section shall apply to a pharmacy benefits manager employed by the Rhode Island

33

Medicaid program and its contracted managed care entities.

34

     (i) A violation of this section is a deceptive practice under § 6-13.1-2.

 

LC003764 - Page 6 of 25

1

     (j) The department of health may promulgate such rules and regulations as are necessary

2

and proper to effectuate the purpose and for the efficient administration and enforcement of this

3

chapter.

4

     SECTION 3. Chapter 27-19 of the General Laws entitled "Nonprofit Hospital Service

5

Corporations" is hereby amended by adding thereto the following section:

6

     27-19-26.3. Maximum allowable cost lists.

7

     (a) As used in this section:

8

     (1) "Maximum allowable cost list" means a listing of drugs used by a pharmacy benefits

9

manager setting the maximum allowable cost on which reimbursement to a pharmacy or pharmacist

10

may be based;

11

     (2) "Pharmaceutical wholesaler" means a person or entity that sells and distributes

12

prescription pharmaceutical products, including without limitation a full line of brand-name,

13

generic, and over-the-counter pharmaceuticals, and that offers regular and private delivery to a

14

pharmacy;

15

     (3) "Pharmacist" means a pharmacist in charge as defined in § 5-19.1-2;

16

     (4) "Pharmacist services" means products, goods, or services provided as a part of the

17

practice of pharmacy in Rhode Island;

18

     (5) "Pharmacy" means that portion or part of a premise where prescriptions are

19

compounded and dispensed as defined in § 5-19.1-2;

20

     (6) "Pharmacy acquisition cost" means the amount that a pharmaceutical wholesaler

21

charges for a pharmaceutical product as listed on the pharmacy's billing invoice;

22

     (7) "Pharmacy benefits manager" means an entity that administers or manages a pharmacy

23

benefits plan or program;

24

     (8) "Pharmacy benefits manager affiliate" means a pharmacy or pharmacist that directly or

25

indirectly, through one or more intermediaries owns or controls, is owned or controlled by, or is

26

under common ownership or control with a pharmacy benefits manager; and

27

     (9) "Pharmacy benefits plan or program" means a plan or program that pays for,

28

reimburses, covers the cost of, or otherwise provides for pharmacist services to individuals who

29

reside in or are employed in this state.

30

     (b) Before a pharmacy benefits manager places or continues a particular drug on a

31

maximum allowable cost list, the drug shall:

32

     (1) Be listed as therapeutically equivalent and pharmaceutically equivalent "A", "AB", or

33

"B" rated in the United States Food and Drug Administration’s most recent version of the "Orange

34

Book" or "Green Book" or has an NR or NA rating by Medi-spanTM, Gold Standard, or a similar

 

LC003764 - Page 7 of 25

1

rating by a nationally recognized reference;

2

     (2) Be available for purchase by each pharmacy in the state from national or regional

3

wholesalers operating in Rhode Island; and

4

     (3) Not be obsolete.

5

     (c) A pharmacy benefits manager shall:

6

     (1) Provide access to its maximum allowable cost list to each pharmacy subject to the

7

maximum allowable cost list;

8

     (2) Update its maximum allowable cost list on a timely basis, but in no event longer than

9

seven (7) calendar days from an increase of ten percent (10%) or more in the pharmacy acquisition

10

cost from sixty percent (60%) or more of the pharmaceutical wholesalers doing business in the

11

state, or a change in the methodology on which the maximum allowable cost list is based, or in the

12

value of a variable involved in the methodology;

13

     (3) Provide a process for each pharmacy subject to the maximum allowable cost list to

14

receive prompt notification of an update to the maximum allowable cost list; and

15

     (4)(i) Provide a reasonable administrative appeal procedure to allow pharmacies to

16

challenge maximum allowable costs and reimbursements made under a maximum allowable cost

17

for a specific drug or drugs as:

18

     (A) Not meeting the requirements of this section; or

19

     (B) Being below pharmacy acquisition cost.

20

     (ii) The reasonable administrative appeal procedure shall include the following terms and

21

conditions:

22

     (A) A dedicated telephone number and email address or website for the purpose of

23

submitting administrative appeals;

24

     (B) The ability to submit an administrative appeal directly to the pharmacy benefits

25

manager regarding the pharmacy benefits plan or program or through a pharmacy service

26

administrative organization; and

27

     (C) No less than seven (7) business days to file an administrative appeal.

28

     (d) The pharmacy benefits manager shall respond to the challenge under subsection

29

(c)(4)(i) of this section within seven (7) business days after receipt of the challenge.

30

     (e) If a challenge is under subsection (c)(4)(i) of this section, the pharmacy benefits

31

manager shall within seven (7) business days after receipt of the challenge either:

32

     (1) If the appeal is upheld:

33

     (i) Make the change in the maximum allowable cost;

34

     (ii) Permit the challenging pharmacy or pharmacist to reverse and rebill the claim in

 

LC003764 - Page 8 of 25

1

question;

2

     (iii) Provide the national drug code number that the increase or change is based on to the

3

pharmacy or pharmacist; and

4

     (iv) Make the change under subsection (e)(1)(i) of this section effective for each similarly

5

situated pharmacy as defined by the payor subject to the maximum allowable cost list.

6

     (2) If the appeal is denied, the pharmacy benefits manager shall provide the challenging

7

pharmacy or pharmacist the national drug code number and the name of the national or regional

8

pharmaceutical wholesalers operating in this state that have the drug currently in stock at a price

9

below the maximum allowable cost list; or

10

     (3) If the national drug code number provided by the pharmacy benefits manager is not

11

available below the pharmacy acquisition cost from the pharmaceutical wholesaler from whom the

12

pharmacy or pharmacist purchases the majority of prescription drugs for resale, then the pharmacy

13

benefits manager shall adjust the maximum allowable cost list above the challenging pharmacy's

14

pharmacy acquisition cost and permit the pharmacy to reverse and rebill each claim affected by the

15

inability to procure the drug at a cost that is equal to or less than the previously challenged

16

maximum allowable cost.

17

     (f)(1) A pharmacy benefits manager shall not reimburse a pharmacy or pharmacist in this

18

state an amount less than the amount that the pharmacy benefits manager reimburses a pharmacy

19

benefits manager affiliate for providing the same pharmacist services.

20

     (2) The reimbursement amount shall be calculated on a per unit basis based on the same

21

generic product identifier or generic code number.

22

     (g) A pharmacy or pharmacist may decline to provide the pharmacist services to a patient

23

or pharmacy benefits manager if, as a result of a maximum allowable cost list, a pharmacy or

24

pharmacist is to be paid less than the pharmacy acquisition cost of the pharmacy providing

25

pharmacist services.

26

     (h) This section shall apply to a pharmacy benefits manager employed by the Rhode Island

27

Medicaid program and its contracted managed care entities.

28

     (i) A violation of this section is a deceptive practice under § 6-13.1-2.

29

     (j) The department of health may promulgate such rules and regulations as are necessary

30

and proper to effectuate the purpose and for the efficient administration and enforcement of this

31

chapter.

32

     SECTION 4. Chapter 27-20 of the General Laws entitled "Nonprofit Medical Services

33

Corporation" is hereby amended by adding thereto the following section:

34

     27-20-23.3. Maximum allowable cost lists.

 

LC003764 - Page 9 of 25

1

     (a) As used in this section:

2

     (1) "Maximum allowable cost list" means a listing of drugs used by a pharmacy benefits

3

manager setting the maximum allowable cost on which reimbursement to a pharmacy or pharmacist

4

may be based;

5

     (2) "Pharmaceutical wholesaler" means a person or entity that sells and distributes

6

prescription pharmaceutical products, including without limitation a full line of brand-name,

7

generic, and over-the-counter pharmaceuticals, and that offers regular and private delivery to a

8

pharmacy;

9

     (3) "Pharmacist" means a pharmacist in charge as defined in § 5-19.1-2;

10

     (4) "Pharmacist services" means products, goods, or services provided as a part of the

11

practice of pharmacy in Rhode Island;

12

     (5) "Pharmacy" means that portion or part of a premise where prescriptions are

13

compounded and dispensed as defined in § 5-19.1-2;

14

     (6) "Pharmacy acquisition cost" means the amount that a pharmaceutical wholesaler

15

charges for a pharmaceutical product as listed on the pharmacy's billing invoice;

16

     (7) "Pharmacy benefits manager" means an entity that administers or manages a pharmacy

17

benefits plan or program;

18

     (8) "Pharmacy benefits manager affiliate" means a pharmacy or pharmacist that directly or

19

indirectly, through one or more intermediaries owns or controls, is owned or controlled by, or is

20

under common ownership or control with a pharmacy benefits manager; and

21

     (9) "Pharmacy benefits plan or program" means a plan or program that pays for,

22

reimburses, covers the cost of, or otherwise provides for pharmacist services to individuals who

23

reside in or are employed in this state.

24

     (b) Before a pharmacy benefits manager places or continues a particular drug on a

25

maximum allowable cost list, the drug shall:

26

     (1) Be listed as therapeutically equivalent and pharmaceutically equivalent "A", "AB", or

27

"B" rated in the United States Food and Drug Administration’s most recent version of the "Orange

28

Book" or "Green Book" or has an NR or NA rating by Medi-spanTM, Gold Standard, or a similar

29

rating by a nationally recognized reference;

30

     (2) Be available for purchase by each pharmacy in the state from national or regional

31

wholesalers operating in Rhode Island; and

32

     (3) Not be obsolete.

33

     (c) A pharmacy benefits manager shall:

34

     (1) Provide access to its maximum allowable cost list to each pharmacy subject to the

 

LC003764 - Page 10 of 25

1

maximum allowable cost list;

2

     (2) Update its maximum allowable cost list on a timely basis, but in no event longer than

3

seven (7) calendar days from an increase of ten percent (10%) or more in the pharmacy acquisition

4

cost from sixty percent (60%) or more of the pharmaceutical wholesalers doing business in the

5

state, or a change in the methodology on which the maximum allowable cost list is based, or in the

6

value of a variable involved in the methodology;

7

     (3) Provide a process for each pharmacy subject to the maximum allowable cost list to

8

receive prompt notification of an update to the maximum allowable cost list; and

9

     (4)(i) Provide a reasonable administrative appeal procedure to allow pharmacies to

10

challenge maximum allowable costs and reimbursements made under a maximum allowable cost

11

for a specific drug or drugs as:

12

     (A) Not meeting the requirements of this section; or

13

     (B) Being below pharmacy acquisition cost.

14

     (ii) The reasonable administrative appeal procedure shall include the following terms and

15

conditions:

16

     (A) A dedicated telephone number and email address or website for the purpose of

17

submitting administrative appeals;

18

     (B) The ability to submit an administrative appeal directly to the pharmacy benefits

19

manager regarding the pharmacy benefits plan or program or through a pharmacy service

20

administrative organization; and

21

     (C) No less than seven (7) business days to file an administrative appeal.

22

     (d) The pharmacy benefits manager shall respond to the challenge under subsection

23

(c)(4)(i) of this section within seven (7) business days after receipt of the challenge.

24

     (e) If a challenge is under subsection (c)(4)(i) of this section, the pharmacy benefits

25

manager shall within seven (7) business days after receipt of the challenge either:

26

     (1) If the appeal is upheld:

27

     (i) Make the change in the maximum allowable cost;

28

     (ii) Permit the challenging pharmacy or pharmacist to reverse and rebill the claim in

29

question;

30

     (iii) Provide the national drug code number that the increase or change is based on to the

31

pharmacy or pharmacist; and

32

     (iv) Make the change under subsection (e)(1)(i) of this section effective for each similarly

33

situated pharmacy as defined by the payor subject to the maximum allowable cost list.

34

     (2) If the appeal is denied, the pharmacy benefits manager shall provide the challenging

 

LC003764 - Page 11 of 25

1

pharmacy or pharmacist the national drug code number and the name of the national or regional

2

pharmaceutical wholesalers operating in this state that have the drug currently in stock at a price

3

below the maximum allowable cost list; or

4

     (3) If the national drug code number provided by the pharmacy benefits manager is not

5

available below the pharmacy acquisition cost from the pharmaceutical wholesaler from whom the

6

pharmacy or pharmacist purchases the majority of prescription drugs for resale, then the pharmacy

7

benefits manager shall adjust the maximum allowable cost list above the challenging pharmacy's

8

pharmacy acquisition cost and permit the pharmacy to reverse and rebill each claim affected by the

9

inability to procure the drug at a cost that is equal to or less than the previously challenged

10

maximum allowable cost.

11

     (f)(1) A pharmacy benefits manager shall not reimburse a pharmacy or pharmacist in this

12

state an amount less than the amount that the pharmacy benefits manager reimburses a pharmacy

13

benefits manager affiliate for providing the same pharmacist services.

14

     (2) The reimbursement amount shall be calculated on a per unit basis based on the same

15

generic product identifier or generic code number.

16

     (g) A pharmacy or pharmacist may decline to provide the pharmacist services to a patient

17

or pharmacy benefits manager if, as a result of a maximum allowable cost list, a pharmacy or

18

pharmacist is to be paid less than the pharmacy acquisition cost of the pharmacy providing

19

pharmacist services.

20

     (h) This section shall apply to a pharmacy benefits manager employed by the Rhode Island

21

Medicaid program and its contracted managed care entities.

22

     (i) A violation of this section is a deceptive practice under § 6-13.1-2.

23

     (j) The department of health may promulgate such rules and regulations as are necessary

24

and proper to effectuate the purpose and for the efficient administration and enforcement of this

25

chapter.

26

     SECTION 5. Chapter 27-20.1 of the General Laws entitled "Nonprofit Dental Service

27

Corporations" is hereby amended by adding thereto the following section:

28

     27-20.1-15.2. Maximum allowable cost limits.

29

     (a) As used in this section:

30

     (1) "Maximum allowable cost list" means a listing of drugs used by a pharmacy benefits

31

manager setting the maximum allowable cost on which reimbursement to a pharmacy or pharmacist

32

may be based;

33

     (2) "Pharmaceutical wholesaler" means a person or entity that sells and distributes

34

prescription pharmaceutical products, including without limitation a full line of brand-name,

 

LC003764 - Page 12 of 25

1

generic, and over-the-counter pharmaceuticals, and that offers regular and private delivery to a

2

pharmacy;

3

     (3) "Pharmacist" means a pharmacist in charge as defined in § 5-19.1-2;

4

     (4) "Pharmacist services" means products, goods, or services provided as a part of the

5

practice of pharmacy in Rhode Island;

6

     (5) "Pharmacy" means that portion or part of a premise where prescriptions are

7

compounded and dispensed as defined in § 5-19.1-2;

8

     (6) "Pharmacy acquisition cost" means the amount that a pharmaceutical wholesaler

9

charges for a pharmaceutical product as listed on the pharmacy's billing invoice;

10

     (7) "Pharmacy benefits manager" means an entity that administers or manages a pharmacy

11

benefits plan or program;

12

     (8) "Pharmacy benefits manager affiliate" means a pharmacy or pharmacist that directly or

13

indirectly, through one or more intermediaries owns or controls, is owned or controlled by, or is

14

under common ownership or control with a pharmacy benefits manager; and

15

     (9) "Pharmacy benefits plan or program" means a plan or program that pays for,

16

reimburses, covers the cost of, or otherwise provides for pharmacist services to individuals who

17

reside in or are employed in this state.

18

     (b) Before a pharmacy benefits manager places or continues a particular drug on a

19

maximum allowable cost list, the drug shall:

20

     (1) Be listed as therapeutically equivalent and pharmaceutically equivalent "A", "AB", or

21

"B" rated in the United States Food and Drug Administration’s most recent version of the "Orange

22

Book" or "Green Book" or has an NR or NA rating by Medi-spanTM, Gold Standard, or a similar

23

rating by a nationally recognized reference;

24

     (2) Be available for purchase by each pharmacy in the state from national or regional

25

wholesalers operating in Rhode Island; and

26

     (3) Not be obsolete.

27

     (c) A pharmacy benefits manager shall:

28

     (1) Provide access to its maximum allowable cost list to each pharmacy subject to the

29

maximum allowable cost list;

30

     (2) Update its maximum allowable cost list on a timely basis, but in no event longer than

31

seven (7) calendar days from an increase of ten percent (10%) or more in the pharmacy acquisition

32

cost from sixty percent (60%) or more of the pharmaceutical wholesalers doing business in the

33

state, or a change in the methodology on which the maximum allowable cost list is based, or in the

34

value of a variable involved in the methodology;

 

LC003764 - Page 13 of 25

1

     (3) Provide a process for each pharmacy subject to the maximum allowable cost list to

2

receive prompt notification of an update to the maximum allowable cost list; and

3

     (4)(i) Provide a reasonable administrative appeal procedure to allow pharmacies to

4

challenge maximum allowable costs and reimbursements made under a maximum allowable cost

5

for a specific drug or drugs as:

6

     (A) Not meeting the requirements of this section; or

7

     (B) Being below pharmacy acquisition cost.

8

     (ii) The reasonable administrative appeal procedure shall include the following terms and

9

conditions:

10

     (A) A dedicated telephone number and email address or website for the purpose of

11

submitting administrative appeals;

12

     (B) The ability to submit an administrative appeal directly to the pharmacy benefits

13

manager regarding the pharmacy benefits plan or program or through a pharmacy service

14

administrative organization; and

15

     (C) No less than seven (7) business days to file an administrative appeal.

16

     (d) The pharmacy benefits manager shall respond to the challenge under subsection

17

(c)(4)(i) of this section within seven (7) business days after receipt of the challenge.

18

     (e) If a challenge is under subsection (c)(4)(i) of this section, the pharmacy benefits

19

manager shall within seven (7) business days after receipt of the challenge either:

20

     (1) If the appeal is upheld:

21

     (i) Make the change in the maximum allowable cost;

22

     (ii) Permit the challenging pharmacy or pharmacist to reverse and rebill the claim in

23

question;

24

     (iii) Provide the national drug code number that the increase or change is based on to the

25

pharmacy or pharmacist; and

26

     (iv) Make the change under subsection (e)(1)(i) of this section effective for each similarly

27

situated pharmacy as defined by the payor subject to the maximum allowable cost list.

28

     (2) If the appeal is denied, the pharmacy benefits manager shall provide the challenging

29

pharmacy or pharmacist the national drug code number and the name of the national or regional

30

pharmaceutical wholesalers operating in this state that have the drug currently in stock at a price

31

below the maximum allowable cost list; or

32

     (3) If the national drug code number provided by the pharmacy benefits manager is not

33

available below the pharmacy acquisition cost from the pharmaceutical wholesaler from whom the

34

pharmacy or pharmacist purchases the majority of prescription drugs for resale, then the pharmacy

 

LC003764 - Page 14 of 25

1

benefits manager shall adjust the maximum allowable cost list above the challenging pharmacy's

2

pharmacy acquisition cost and permit the pharmacy to reverse and rebill each claim affected by the

3

inability to procure the drug at a cost that is equal to or less than the previously challenged

4

maximum allowable cost.

5

     (f)(1) A pharmacy benefits manager shall not reimburse a pharmacy or pharmacist in this

6

state an amount less than the amount that the pharmacy benefits manager reimburses a pharmacy

7

benefits manager affiliate for providing the same pharmacist services.

8

     (2) The reimbursement amount shall be calculated on a per unit basis based on the same

9

generic product identifier or generic code number.

10

     (g) A pharmacy or pharmacist may decline to provide the pharmacist services to a patient

11

or pharmacy benefits manager if, as a result of a maximum allowable cost list, a pharmacy or

12

pharmacist is to be paid less than the pharmacy acquisition cost of the pharmacy providing

13

pharmacist services.

14

     (h) This section shall apply to a pharmacy benefits manager employed by the Rhode Island

15

Medicaid program and its contracted managed care entities.

16

     (i) A violation of this section is a deceptive practice under § 6-13.1-2.

17

     (j) The department of health may promulgate such rules and regulations as are necessary

18

and proper to effectuate the purpose and for the efficient administration and enforcement of this

19

chapter.

20

     SECTION 6. Chapter 27-41 of the General Laws entitled "Health Maintenance

21

Organizations" is hereby amended by adding thereto the following section:

22

     27-41-38.3. Maximum allowable cost limits.

23

     (a) As used in this section:

24

     (1) "Maximum allowable cost list" means a listing of drugs used by a pharmacy benefits

25

manager setting the maximum allowable cost on which reimbursement to a pharmacy or pharmacist

26

may be based;

27

     (2) "Pharmaceutical wholesaler" means a person or entity that sells and distributes

28

prescription pharmaceutical products, including without limitation a full line of brand-name,

29

generic, and over-the-counter pharmaceuticals, and that offers regular and private delivery to a

30

pharmacy;

31

     (3) "Pharmacist" means a pharmacist in charge as defined in § 5-19.1-2;

32

     (4) "Pharmacist services" means products, goods, or services provided as a part of the

33

practice of pharmacy in Rhode Island;

34

     (5) "Pharmacy" means that portion or part of a premise where prescriptions are

 

LC003764 - Page 15 of 25

1

compounded and dispensed as defined in § 5-19.1-2;

2

     (6) "Pharmacy acquisition cost" means the amount that a pharmaceutical wholesaler

3

charges for a pharmaceutical product as listed on the pharmacy's billing invoice;

4

     (7) "Pharmacy benefits manager" means an entity that administers or manages a pharmacy

5

benefits plan or program;

6

     (8) "Pharmacy benefits manager affiliate" means a pharmacy or pharmacist that directly or

7

indirectly, through one or more intermediaries owns or controls, is owned or controlled by, or is

8

under common ownership or control with a pharmacy benefits manager; and

9

     (9) "Pharmacy benefits plan or program" means a plan or program that pays for,

10

reimburses, covers the cost of, or otherwise provides for pharmacist services to individuals who

11

reside in or are employed in this state.

12

     (b) Before a pharmacy benefits manager places or continues a particular drug on a

13

maximum allowable cost list, the drug shall:

14

     (1) Be listed as therapeutically equivalent and pharmaceutically equivalent "A", "AB", or

15

"B" rated in the United States Food and Drug Administration’s most recent version of the "Orange

16

Book" or "Green Book" or has an NR or NA rating by Medi-spanTM, Gold Standard, or a similar

17

rating by a nationally recognized reference;

18

     (2) Be available for purchase by each pharmacy in the state from national or regional

19

wholesalers operating in Rhode Island; and

20

     (3) Not be obsolete.

21

     (c) A pharmacy benefits manager shall:

22

     (1) Provide access to its maximum allowable cost list to each pharmacy subject to the

23

maximum allowable cost list;

24

     (2) Update its maximum allowable cost list on a timely basis, but in no event longer than

25

seven (7) calendar days from an increase of ten percent (10%) or more in the pharmacy acquisition

26

cost from sixty percent (60%) or more of the pharmaceutical wholesalers doing business in the

27

state, or a change in the methodology on which the maximum allowable cost list is based, or in the

28

value of a variable involved in the methodology;

29

     (3) Provide a process for each pharmacy subject to the maximum allowable cost list to

30

receive prompt notification of an update to the maximum allowable cost list; and

31

     (4)(i) Provide a reasonable administrative appeal procedure to allow pharmacies to

32

challenge maximum allowable costs and reimbursements made under a maximum allowable cost

33

for a specific drug or drugs as:

34

     (A) Not meeting the requirements of this section; or

 

LC003764 - Page 16 of 25

1

     (B) Being below pharmacy acquisition cost.

2

     (ii) The reasonable administrative appeal procedure shall include the following terms and

3

conditions:

4

     (A) A dedicated telephone number and email address or website for the purpose of

5

submitting administrative appeals;

6

     (B) The ability to submit an administrative appeal directly to the pharmacy benefits

7

manager regarding the pharmacy benefits plan or program or through a pharmacy service

8

administrative organization; and

9

     (C) No less than seven (7) business days to file an administrative appeal.

10

     (d) The pharmacy benefits manager shall respond to the challenge under subsection

11

(c)(4)(i) of this section within seven (7) business days after receipt of the challenge.

12

     (e) If a challenge is under subsection (c)(4)(i) of this section, the pharmacy benefits

13

manager shall within seven (7) business days after receipt of the challenge either:

14

     (1) If the appeal is upheld:

15

     (i) Make the change in the maximum allowable cost;

16

     (ii) Permit the challenging pharmacy or pharmacist to reverse and rebill the claim in

17

question;

18

     (iii) Provide the national drug code number that the increase or change is based on to the

19

pharmacy or pharmacist; and

20

     (iv) Make the change under subsection (e)(1)(i) of this section effective for each similarly

21

situated pharmacy as defined by the payor subject to the maximum allowable cost list.

22

     (2) If the appeal is denied, the pharmacy benefits manager shall provide the challenging

23

pharmacy or pharmacist the national drug code number and the name of the national or regional

24

pharmaceutical wholesalers operating in this state that have the drug currently in stock at a price

25

below the maximum allowable cost list; or

26

     (3) If the national drug code number provided by the pharmacy benefits manager is not

27

available below the pharmacy acquisition cost from the pharmaceutical wholesaler from whom the

28

pharmacy or pharmacist purchases the majority of prescription drugs for resale, then the pharmacy

29

benefits manager shall adjust the maximum allowable cost list above the challenging pharmacy's

30

pharmacy acquisition cost and permit the pharmacy to reverse and rebill each claim affected by the

31

inability to procure the drug at a cost that is equal to or less than the previously challenged

32

maximum allowable cost.

33

     (f)(1) A pharmacy benefits manager shall not reimburse a pharmacy or pharmacist in this

34

state an amount less than the amount that the pharmacy benefits manager reimburses a pharmacy

 

LC003764 - Page 17 of 25

1

benefits manager affiliate for providing the same pharmacist services.

2

     (2) The reimbursement amount shall be calculated on a per unit basis based on the same

3

generic product identifier or generic code number.

4

     (g) A pharmacy or pharmacist may decline to provide the pharmacist services to a patient

5

or pharmacy benefits manager if, as a result of a maximum allowable cost list, a pharmacy or

6

pharmacist is to be paid less than the pharmacy acquisition cost of the pharmacy providing

7

pharmacist services.

8

     (h) This section shall apply to a pharmacy benefits manager employed by the Rhode Island

9

Medicaid program and its contracted managed care entities.

10

     (i) A violation of this section is a deceptive practice under § 6-13.1-2.

11

     (j) The department of health may promulgate such rules and regulations as are necessary

12

and proper to effectuate the purpose and for the efficient administration and enforcement of this

13

chapter.

14

     SECTION 7. Section 27-18-33.2 of the General Laws in Chapter 27-18 entitled "Accident

15

and Sickness Insurance Policies" is hereby repealed.

16

     27-18-33.2. Pharmacy benefit manager requirements with respect to multi-source

17

generic pricing updates to pharmacies.

18

     (a) Definitions. As used herein:

19

     (1) "Maximum-allowable cost" or "MAC" means the maximum amount that a pharmacy

20

benefits manager will reimburse toward the cost of a drug;

21

     (2) "Nationally available" means that there is an adequate supply available from regional

22

or national wholesalers and that the product is not obsolete or temporarily unavailable;

23

     (3) "Pharmacy-benefit manager" or "PBM" means an entity doing business in this state that

24

contracts to administer or manage prescription-drug benefits on behalf of any carrier that provides

25

prescription-drug benefits to residents of this state.

26

     (b) Upon each contract execution or renewal, a PBM shall, with respect to contracts

27

between a PBM and a pharmacy or, alternatively, a PBM and a pharmacy's contracting

28

representative or agent, such as a pharmacy services administrative organization (PSAO):

29

     (1) Include in such contracts a requirement to update pricing information on the MAC list

30

at least every ten (10) calendar days;

31

     (2) Maintain a procedure to eliminate products from the list of drugs subject to such pricing,

32

or modify MAC rates when such drugs do not meet the standards and requirements of this section

33

as set forth, in order to remain consistent with pricing changes in the marketplace.

34

     (c) PBM requirements for inclusion of products on a list of drugs subject to MAC pricing.

 

LC003764 - Page 18 of 25

1

In order to place a particular prescription drug on a MAC list, the PBM must, at a minimum, ensure

2

that:

3

     (1) The product must be listed as "A," "AB," or "B" rated in the most recent version of the

4

United States Food and Drug Administration's approved drug products with therapeutic

5

equivalence evaluations, also known as the orange book, or has an "NR" or "NA" rating or similar

6

rating by a nationally recognized reference; and

7

     (2) The product must be nationally available.

8

     (d) Standards for pharmacy appeals. All contracts between a PBM, a contracted pharmacy

9

or, alternatively, a PBM and a pharmacy's contracting representative or agent, such as a pharmacy

10

services administrative organization (PSAO), shall include a process to appeal, investigate, and

11

resolve disputes regarding MAC pricing. The process shall include the following provisions:

12

     (1) The right to appeal shall be limited to fifteen (15) days following the initial claim;

13

     (2) The appeal shall be investigated and resolved within fifteen (15) days following receipt

14

of the appeal;

15

     (3) A process by which a network pharmacy may contact the PBM regarding the appeals

16

process;

17

     (4) If the appeal is denied, the PBM shall provide the reason for the denial and identify the

18

national drug code of a drug product that is available in adequate supply;

19

     (5) If an appeal is upheld, the PBM shall make an adjustment to the list effective no later

20

than one day after the date of determination; and

21

     (6) The department of health shall exercise oversight and enforcement of this section.

22

     SECTION 8. Section 27-19-26.2 of the General Laws in Chapter 27-19 entitled "Nonprofit

23

Hospital Service Corporations" is hereby repealed.

24

     27-19-26.2. Pharmacy benefit manager requirements with respect to multi-source

25

generic pricing updates to pharmacies.

26

     (a) Definitions. As used herein:

27

     (1) "Maximum-allowable cost" or "MAC" means the maximum amount that a pharmacy

28

benefits manager will reimburse toward the cost of a drug;

29

     (2) "Nationally available" means that there is an adequate supply available from regional

30

or national wholesalers and that the product is not obsolete or temporarily unavailable;

31

     (3) "Pharmacy-benefit manager" or "PBM" means an entity doing business in this state that

32

contracts to administer or manage prescription-drug benefits on behalf of any carrier that provides

33

prescription-drug benefits to residents of this state.

34

     (b) Upon each contract execution or renewal, a PBM shall, with respect to contracts

 

LC003764 - Page 19 of 25

1

between a PBM and a pharmacy or, alternatively, a PBM and a pharmacy's contracting

2

representative or agent, such as a pharmacy services administrative organization (PSAO):

3

     (1) Include in such contracts a requirement to update pricing information on the MAC list

4

at least every ten (10) calendar days;

5

     (2) Maintain a procedure to eliminate products from the list of drugs subject to such pricing,

6

or modify MAC rates when such drugs do not meet the standards and requirements of this section

7

as set forth in order to remain consistent with pricing changes in the marketplace.

8

     (c) PBM requirements for inclusion of products on a list of drugs subject to MAC pricing.

9

In order to place a particular prescription drug on a MAC list, the PBM must, at a minimum, ensure

10

that:

11

     (1) The product must be listed as "A," "AB," or "B" rated in the most recent version of the

12

United States Food and Drug Administration's approved drug products with therapeutic

13

equivalence evaluations, also known as the orange book, or has an "NR" or "NA" rating or similar

14

rating by a nationally recognized reference; and

15

     (2) The product must be nationally available.

16

     (d) Standards for pharmacy appeals. All contracts between a PBM, a contracted pharmacy

17

or, alternatively, a PBM and a pharmacy's contracting representative or agent, such as a pharmacy

18

services administrative organization (PSAO), shall include a process to appeal, investigate, and

19

resolve disputes regarding MAC pricing. The process shall include the following provisions:

20

     (1) The right to appeal shall be limited to fifteen (15) days following the initial claim;

21

     (2) The appeal shall be investigated and resolved within fifteen (15) days following receipt

22

of the appeal;

23

     (3) A process by which a network pharmacy may contact the PBM regarding the appeals

24

process;

25

     (4) If the appeal is denied, the PBM shall provide the reason for the denial and identify the

26

national drug code of a drug product that is available in adequate supply;

27

     (5) If an appeal is upheld, the PBM shall make an adjustment to the list effective no later

28

than one day after the date of determination; and

29

     (6) The department of health shall exercise oversight and enforcement of this section.

30

     SECTION 9. Section 27-20-23.2 of the General Laws in Chapter 27-20 entitled "Nonprofit

31

Medical Service Corporations" is hereby repealed.

32

     27-20-23.2. Pharmacy benefit manager requirements with respect to multi-source

33

generic pricing updates to pharmacies.

34

     (a) Definitions. As used herein:

 

LC003764 - Page 20 of 25

1

     (1) "Maximum-allowable cost" or "MAC" means the maximum amount that a pharmacy

2

benefits manager will reimburse toward the cost of a drug;

3

     (2) "Nationally available" means that there is an adequate supply available from regional

4

or national wholesalers and that the product is not obsolete or temporarily unavailable;

5

     (3) "Pharmacy-benefit manager" or "PBM" means an entity doing business in this state that

6

contracts to administer or manage prescription-drug benefits on behalf of any carrier that provides

7

prescription-drug benefits to residents of this state.

8

     (b) Upon each contract execution or renewal, a PBM shall, with respect to contracts

9

between a PBM and a pharmacy or, alternatively, a PBM and a pharmacy's contracting

10

representative or agent such as a pharmacy services administrative organization (PSAO):

11

     (1) Include in such contracts a requirement to update pricing information on the MAC list

12

at least every ten (10) calendar days;

13

     (2) Maintain a procedure to eliminate products from the list of drugs subject to such pricing,

14

or modify MAC rates when such drugs do not meet the standards and requirements of this section

15

as set forth in order to remain consistent with pricing changes in the marketplace.

16

     (c) PBM requirements for inclusion of products on a list of drugs subject to MAC pricing.

17

In order to place a particular prescription drug on a MAC list, the PBM must, at a minimum, ensure

18

that:

19

     (1) The product must be listed as "A," "AB," or "B" rated in the most recent version of the

20

United States Food and Drug Administration's approved drug products with therapeutic

21

equivalence evaluations, also known as the orange book, or has an "NR" or "NA" rating or similar

22

rating by a nationally recognized reference; and

23

     (2) The product must be nationally available.

24

     (d) Standards for pharmacy appeals. All contracts between a PBM, a contracted pharmacy

25

or, alternatively, a PBM and a pharmacy's contracting representative or agent, such as a pharmacy

26

services administrative organization (PSAO), shall include a process to appeal, investigate, and

27

resolve disputes regarding MAC pricing. The process shall include the following provisions:

28

     (1) The right to appeal shall be limited to fifteen (15) days following the initial claim;

29

     (2) The appeal shall be investigated and resolved within fifteen (15) days following receipt

30

of the appeal;

31

     (3) A process by which a network pharmacy may contact the PBM regarding the appeals

32

process;

33

     (4) If the appeal is denied, the PBM shall provide the reason for the denial and identify the

34

national drug code of a drug product that is available in adequate supply;

 

LC003764 - Page 21 of 25

1

     (5) If an appeal is upheld, the PBM shall make an adjustment to the list effective no later

2

than one day after the date of determination; and

3

     (6) The department of health shall exercise oversight and enforcement of this section.

4

     SECTION 10. Section 27-20.1-15.1 of the General Laws in Chapter 27-20.1 entitled

5

"Nonprofit Dental Service Corporations" is hereby repealed.

6

     27-20.1-15.1. Pharmacy benefit manager requirements with respect to multi-source

7

generic pricing updates to pharmacies.

8

     (a) Definitions. As used herein:

9

     (1) "Maximum-allowable cost" or "MAC" means the maximum amount that a pharmacy

10

benefits manager will reimburse toward the cost of a drug;

11

     (2) "Nationally available" means that there is an adequate supply available from regional

12

or national wholesalers and that the product is not obsolete or temporarily unavailable;

13

     (3) "Pharmacy-benefit manager" or "PBM" means an entity doing business in this state that

14

contracts to administer or manage prescription-drug benefits on behalf of any carrier that provides

15

prescription-drug benefits to residents of this state.

16

     (b) Upon each contract execution or renewal, a PBM shall, with respect to contracts

17

between a PBM and a pharmacy or, alternatively, a PBM and a pharmacy's contracting

18

representative or agent, such as a pharmacy services administrative organization (PSAO):

19

     (1) Include in such contracts a requirement to update pricing information on the MAC list

20

at least every ten (10) calendar days;

21

     (2) Maintain a procedure to eliminate products from the list of drugs subject to such pricing,

22

or modify MAC rates when such drugs do not meet the standards and requirements of this section

23

as set forth in order to remain consistent with pricing changes in the marketplace.

24

     (c) PBM requirements for inclusion of products on a list of drugs subject to MAC pricing.

25

In order to place a particular prescription drug on a MAC list, the PBM must, at a minimum, ensure

26

that:

27

     (1) The product must be listed as "A," "AB," or "B" rated in the most recent version of the

28

United States Food and Drug Administration's approved drug products with therapeutic

29

equivalence evaluations, also known as the orange book, or has an "NR" or "NA" rating or similar

30

rating by a nationally recognized reference; and

31

     (2) The product must be nationally available.

32

     (d) Standards for pharmacy appeals. All contracts between a PBM, a contracted pharmacy

33

or, alternatively, a PBM and a pharmacy's contracting representative or agent, such as a pharmacy

34

services administrative organization (PSAO), shall include a process to appeal, investigate, and

 

LC003764 - Page 22 of 25

1

resolve disputes regarding MAC pricing. The process shall include the following provisions:

2

     (1) The right to appeal shall be limited to fifteen (15) days following the initial claim;

3

     (2) The appeal shall be investigated and resolved within fifteen (15) days following receipt

4

of the appeal;

5

     (3) A process by which a network pharmacy may contact the PBM regarding the appeals

6

process;

7

     (4) If the appeal is denied, the PBM shall provide the reason for the denial and identify the

8

national drug code of a drug product that is available in adequate supply;

9

     (5) If an appeal is upheld, the PBM shall make an adjustment to the list effective no later

10

than one day after the date of determination; and

11

     (6) The department of health shall exercise oversight and enforcement of this section.

12

     SECTION 11. Section 27-41-38.2 of the General Laws in Chapter 27-41 entitled "Health

13

Maintenance Organizations" is hereby repealed.

14

     27-41-38.2. Pharmacy benefit manager requirements with respect to multi-source

15

generic pricing updates to pharmacies.

16

     (a) Definitions. As used herein:

17

     (1) "Maximum-allowable cost" or "MAC" means the maximum amount that a pharmacy

18

benefits manager will reimburse toward the cost of a drug;

19

     (2) "Nationally available" means that there is an adequate supply available from regional

20

or national wholesalers and that the product is not obsolete or temporarily unavailable;

21

     (3) "Pharmacy-benefit manager" means an entity doing business in this state that contracts

22

to administer or manage prescription-drug benefits on behalf of any carrier that provides

23

prescription-drug benefits to residents of this state.

24

     (b) Upon each contract execution or renewal, a PBM shall, with respect to contracts

25

between a PBM and a pharmacy or, alternatively, a PBM and a pharmacy's contracting

26

representative or agent, such as a pharmacy services administrative organization (PSAO):

27

     (1) Include in such contracts a requirement to update pricing information on the MAC list

28

at least every ten (10) calendar days;

29

     (2) Maintain a procedure to eliminate products from the list of drugs subject to such pricing,

30

or modify MAC rates when such drugs do not meet the standards and requirements of this section

31

as set forth in order to remain consistent with pricing changes in the marketplace.

32

     (c) PBM requirements for inclusion of products on a list of drugs subject to MAC pricing.

33

In order to place a particular prescription drug on a MAC list, the PBM must, at a minimum, ensure

34

that:

 

LC003764 - Page 23 of 25

1

     (1) The product must be listed as "A," "AB," or "B" rated in the most recent version of the

2

United States Food and Drug Administration's approved drug products with therapeutic

3

equivalence evaluations, also known as the orange book, or has an "NR" or "NA" rating or similar

4

rating by a nationally recognized reference; and

5

     (2) The product must be nationally available.

6

     (d) Standards for pharmacy appeals. All contracts between a PBM, a contracted pharmacy

7

or, alternatively, a PBM and a pharmacy's contracting representative or agent, such as a pharmacy

8

services administrative organization (PSAO), shall include a process to appeal, investigate, and

9

resolve disputes regarding MAC pricing. The process shall include the following provisions:

10

     (1) The right to appeal shall be limited to fifteen (15) days following the initial claim;

11

     (2) The appeal shall be investigated and resolved within fifteen (15) days following receipt

12

of the appeal;

13

     (3) A process by which a network pharmacy may contact the PBM regarding the appeals

14

process;

15

     (4) If the appeal is denied, the PBM shall provide the reason for the denial and identify the

16

national drug code of a drug product that is available in adequate supply;

17

     (5) If an appeal is upheld, the PBM shall make an adjustment to the list effective no later

18

than one day after the date of determination; and

19

     (6) The department of health shall exercise oversight and enforcement of this section.

20

     SECTION 12. This act shall take effect upon passage.

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LC003764 - Page 24 of 25

EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO BUSINESSES AND PROFESSIONS -- PHARMACIES

***

1

     This act would update and revise the current law on pharmacy benefit managers and

2

prescription drug pricing including establishing maximum allowable cost limits and providing for

3

amended administrative appeal procedures.

4

     This act would take effect upon passage.

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LC003764 - Page 25 of 25