2021 -- S 0592

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LC001592

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2021

____________

A N   A C T

RELATING TO BUSINESSES AND PROFESSIONS -- PHARMACIES--INSURANCE

     Introduced By: Senators Miller, Lawson, DiMario, Valverde, Archambault, and Bell

     Date Introduced: March 11, 2021

     Referred To: Senate Health & Human Services

     It is enacted by the General Assembly as follows:

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

by adding thereto the following section:

     5-19.1-36. Maximum allowable cost lists.

     (a) As used in this section:

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

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

may be based;

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

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

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

pharmacy;

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

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

practice of pharmacy in Rhode Island;

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

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

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

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

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

benefits plan or program;

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

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

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

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

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

reside in or are employed in this state.

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

maximum allowable cost list, the drug shall:

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

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

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

rating by a nationally recognized reference;

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

wholesalers operating in Rhode Island; and

     (3) Not be obsolete.

     (c) A pharmacy benefits manager shall:

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

maximum allowable cost list;

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

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

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

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

value of a variable involved in the methodology;

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

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

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

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

for a specific drug or drugs as:

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

     (B) Being below pharmacy acquisition cost.

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

conditions:

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

LC001592 - Page 2 of 25

submitting administrative appeals;

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

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

administrative organization; and

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

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

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

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

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

     (1) If the appeal is upheld:

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

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

question; and

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

pharmacy or pharmacist; and

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

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

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

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

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

below the maximum allowable cost list; or

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

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

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

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

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

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

maximum allowable cost.

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

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

benefits manager affiliate for providing the same pharmacist services.

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

generic product identifier or generic code number.

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

LC001592 - Page 3 of 25

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

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

pharmacist services.

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

Medicaid program and its contracted managed care entities.

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

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

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

chapter.

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

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

     27-18-33.3. Maximum allowable cost lists.

     (a) As used in this section:

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

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

may be based;

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

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

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

pharmacy;

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

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

practice of pharmacy in Rhode Island;

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

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

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

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

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

benefits plan or program;

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

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

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

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

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

LC001592 - Page 4 of 25

reside in or are employed in this state.

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

maximum allowable cost list, the drug shall:

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

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

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

rating by a nationally recognized reference;

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

wholesalers operating in Rhode Island; and

     (3) Not be obsolete.

     (c) A pharmacy benefits manager shall:

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

maximum allowable cost list;

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

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

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

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

value of a variable involved in the methodology;

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

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

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

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

for a specific drug or drugs as:

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

     (B) Being below pharmacy acquisition cost.

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

conditions:

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

submitting administrative appeals;

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

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

administrative organization; and

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

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

LC001592 - Page 5 of 25

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

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

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

     (1) If the appeal is upheld:

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

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

question; and

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

pharmacy or pharmacist; and

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

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

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

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

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

below the maximum allowable cost list; or

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

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

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

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

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

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

maximum allowable cost.

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

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

benefits manager affiliate for providing the same pharmacist services.

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

generic product identifier or generic code number.

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

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

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

pharmacist services.

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

Medicaid program and its contracted managed care entities.

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

LC001592 - Page 6 of 25

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

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

chapter.

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

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

     27-19-26.3. Maximum allowable cost lists.

     (a) As used in this section:

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

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

may be based;

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

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

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

pharmacy;

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

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

practice of pharmacy in Rhode Island;

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

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

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

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

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

benefits plan or program;

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

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

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

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

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

reside in or are employed in this state.

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

maximum allowable cost list, the drug shall:

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

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

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

LC001592 - Page 7 of 25

rating by a nationally recognized reference;

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

wholesalers operating in Rhode Island; and

     (3) Not be obsolete.

     (c) A pharmacy benefits manager shall:

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

maximum allowable cost list;

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

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

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

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

value of a variable involved in the methodology;

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

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

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

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

for a specific drug or drugs as:

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

     (B) Being below pharmacy acquisition cost.

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

conditions:

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

submitting administrative appeals;

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

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

administrative organization; and

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

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

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

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

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

     (1) If the appeal is upheld:

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

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

LC001592 - Page 8 of 25

question; and

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

pharmacy or pharmacist; and

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

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

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

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

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

below the maximum allowable cost list; or

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

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

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

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

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

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

maximum allowable cost.

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

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

benefits manager affiliate for providing the same pharmacist services.

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

generic product identifier or generic code number.

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

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

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

pharmacist services.

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

Medicaid program and its contracted managed care entities.

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

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

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

chapter.

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

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

     27-20-23.3. Maximum allowable cost lists.

LC001592 - Page 9 of 25

     (a) As used in this section:

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

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

may be based;

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

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

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

pharmacy;

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

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

practice of pharmacy in Rhode Island;

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

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

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

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

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

benefits plan or program;

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

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

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

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

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

reside in or are employed in this state.

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

maximum allowable cost list, the drug shall:

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

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

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

rating by a nationally recognized reference;

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

wholesalers operating in Rhode Island; and

     (3) Not be obsolete.

     (c) A pharmacy benefits manager shall:

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

LC001592 - Page 10 of 25

maximum allowable cost list;

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

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

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

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

value of a variable involved in the methodology;

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

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

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

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

for a specific drug or drugs as:

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

     (B) Being below pharmacy acquisition cost.

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

conditions:

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

submitting administrative appeals;

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

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

administrative organization; and

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

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

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

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

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

     (1) If the appeal is upheld:

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

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

question; and

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

pharmacy or pharmacist; and

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

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

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

LC001592 - Page 11 of 25

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

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

below the maximum allowable cost list; or

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

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

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

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

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

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

maximum allowable cost.

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

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

benefits manager affiliate for providing the same pharmacist services.

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

generic product identifier or generic code number.

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

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

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

pharmacist services.

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

Medicaid program and its contracted managed care entities.

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

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

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

chapter.

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

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

     27-20.1-15.2. Maximum allowable cost limits.

     (a) As used in this section:

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

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

may be based;

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

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

LC001592 - Page 12 of 25

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

pharmacy;

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

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

practice of pharmacy in Rhode Island;

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

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

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

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

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

benefits plan or program;

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

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

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

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

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

reside in or are employed in this state.

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

maximum allowable cost list, the drug shall:

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

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

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

rating by a nationally recognized reference;

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

wholesalers operating in Rhode Island; and

     (3) Not be obsolete.

     (c) A pharmacy benefits manager shall:

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

maximum allowable cost list;

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

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

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

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

value of a variable involved in the methodology;

LC001592 - Page 13 of 25

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

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

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

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

for a specific drug or drugs as:

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

     (B) Being below pharmacy acquisition cost.

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

conditions:

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

submitting administrative appeals;

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

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

administrative organization; and

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

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

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

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

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

     (1) If the appeal is upheld:

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

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

question; and

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

pharmacy or pharmacist; and

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

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

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

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

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

below the maximum allowable cost list; or

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

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

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

LC001592 - Page 14 of 25

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

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

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

maximum allowable cost.

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

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

benefits manager affiliate for providing the same pharmacist services.

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

generic product identifier or generic code number.

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

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

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

pharmacist services.

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

Medicaid program and its contracted managed care entities.

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

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

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

chapter.

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

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

     27-41-38.3. Maximum allowable cost limits.

     (a) As used in this section:

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

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

may be based;

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

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

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

pharmacy;

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

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

practice of pharmacy in Rhode Island;

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

LC001592 - Page 15 of 25

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

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

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

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

benefits plan or program;

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

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

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

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

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

reside in or are employed in this state.

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

maximum allowable cost list, the drug shall:

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

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

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

rating by a nationally recognized reference;

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

wholesalers operating in Rhode Island; and

     (3) Not be obsolete.

     (c) A pharmacy benefits manager shall:

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

maximum allowable cost list;

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

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

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

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

value of a variable involved in the methodology;

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

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

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

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

for a specific drug or drugs as:

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

LC001592 - Page 16 of 25

     (B) Being below pharmacy acquisition cost.

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

conditions:

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

submitting administrative appeals;

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

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

administrative organization; and

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

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

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

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

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

     (1) If the appeal is upheld:

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

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

question; and

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

pharmacy or pharmacist; and

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

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

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

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

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

below the maximum allowable cost list; or

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

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

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

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

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

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

maximum allowable cost.

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

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

LC001592 - Page 17 of 25

benefits manager affiliate for providing the same pharmacist services.

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

generic product identifier or generic code number.

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

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

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

pharmacist services.

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

Medicaid program and its contracted managed care entities.

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

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

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

chapter.

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

and Sickness Insurance Policies" is hereby repealed.

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

generic pricing updates to pharmacies.

     (a) Definitions. As used herein:

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

benefits manager will reimburse toward the cost of a drug;

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

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

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

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

prescription-drug benefits to residents of this state.

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

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

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

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

at least every ten (10) calendar days;

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

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

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

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

LC001592 - Page 18 of 25

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

that:

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

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

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

rating by a nationally recognized reference; and

     (2) The product must be nationally available.

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

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

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

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

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

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

of the appeal;

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

process;

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

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

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

than one day after the date of determination; and

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

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

Hospital Service Corporations" is hereby repealed.

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

generic pricing updates to pharmacies.

     (a) Definitions. As used herein:

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

benefits manager will reimburse toward the cost of a drug;

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

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

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

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

prescription-drug benefits to residents of this state.

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

LC001592 - Page 19 of 25

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

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

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

at least every ten (10) calendar days;

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

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

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

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

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

that:

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

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

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

rating by a nationally recognized reference; and

     (2) The product must be nationally available.

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

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

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

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

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

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

of the appeal;

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

process;

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

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

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

than one day after the date of determination; and

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

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

Medical Service Corporations" is hereby repealed.

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

generic pricing updates to pharmacies.

     (a) Definitions. As used herein:

LC001592 - Page 20 of 25

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

benefits manager will reimburse toward the cost of a drug;

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

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

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

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

prescription-drug benefits to residents of this state.

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

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

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

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

at least every ten (10) calendar days;

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

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

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

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

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

that:

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

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

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

rating by a nationally recognized reference; and

     (2) The product must be nationally available.

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

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

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

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

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

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

of the appeal;

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

process;

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

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

LC001592 - Page 21 of 25

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

than one day after the date of determination; and

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

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

"Nonprofit Dental Service Corporations" is hereby repealed.

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

generic pricing updates to pharmacies.

     (a) Definitions. As used herein:

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

benefits manager will reimburse toward the cost of a drug;

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

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

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

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

prescription-drug benefits to residents of this state.

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

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

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

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

at least every ten (10) calendar days;

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

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

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

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

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

that:

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

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

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

rating by a nationally recognized reference; and

     (2) The product must be nationally available.

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

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

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

LC001592 - Page 22 of 25

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

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

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

of the appeal;

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

process;

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

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

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

than one day after the date of determination; and

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

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

Maintenance Organizations" is hereby repealed.

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

generic pricing updates to pharmacies.

     (a) Definitions. As used herein:

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

benefits manager will reimburse toward the cost of a drug;

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

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

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

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

prescription-drug benefits to residents of this state.

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

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

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

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

at least every ten (10) calendar days;

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

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

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

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

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

that:

LC001592 - Page 23 of 25

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

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

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

rating by a nationally recognized reference; and

     (2) The product must be nationally available.

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

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

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

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

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

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

of the appeal;

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

process;

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

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

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

than one day after the date of determination; and

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

     SECTION 12. This act shall take effect upon passage.

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LC001592

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LC001592 - Page 24 of 25

EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO BUSINESSES AND PROFESSIONS -- PHARMACIES--INSURANCE

***

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

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

amended administrative appeal procedures.

     This act would take effect upon passage.

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LC001592

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LC001592 - Page 25 of 25