Bill Text: CA AB29 | 2017-2018 | Regular Session | Amended
Bill Title: Pharmacy benefit managers.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Failed) 2018-02-01 - From committee: Filed with the Chief Clerk pursuant to Joint Rule 56. [AB29 Detail]
Download: California-2017-AB29-Amended.html
Amended
IN
Assembly
May 11, 2017 |
Amended
IN
Assembly
May 04, 2017 |
Amended
IN
Assembly
March 28, 2017 |
Assembly Bill | No. 29 |
Introduced by Assembly Member Nazarian |
December 05, 2016 |
LEGISLATIVE COUNSEL'S DIGEST
Digest Key
Vote: MAJORITY Appropriation: NO Fiscal Committee:Bill Text
The people of the State of California do enact as follows:
SECTION 1.
Article 11.10 (commencing with Section 1399.880) is added to Chapter 2.2 of Division 2 of the Health and Safety Code, to read:Article 11.10. Pharmacy Benefit Managers
1399.880.
For the purposes of this article, the following definitions apply:1399.881.
A pharmacy benefit manager shall disclose to a purchaser, in writing and no less frequently than on a quarterly basis, all of the following:1399.882.
(a) Except for utilization information, a pharmacy benefit manager need not make the disclosures required in Section 1399.881 unless and until the purchaser agrees, in writing, to maintain as confidential any proprietary information. That agreement may provide for equitable and legal remedies in the event of a violation of the agreement. That agreement may also include persons or entities with whom the purchaser contracts to provide consultation regarding pharmacy services. Proprietary information includes trade secrets, and information on pricing, costs, revenues, taxes, market share, negotiating strategies, customers, and personnel held by a pharmacy benefit manager and used for its business purposes.1399.883.
A pharmacy benefit manager shall report to the department, on a quarterly basis, regarding its compliance with the standards set forth in this article in a manner to be determined by the department.1399.884.
(a) The department has the authority to enforce the provisions of this article, including the authority to adopt, amend, or repeal any rules and regulations, not inconsistent with the laws of this state, as may be necessary for the protection of the public and to implement this article.1399.885.
(a) A pharmacy benefit manager shall obtain a license from the department in order to conduct business as a pharmacy benefit manager in this state.SEC. 2.
No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.For the purposes of this division, the following definitions shall apply:
(a)“Labeler” means a person who receives prescription drugs from a manufacturer or wholesaler and repackages those drugs for later retail sale and who has a labeler code from the federal Food and Drug Administration under Section 207.20 of Title 21 of the Code of Federal Regulations.
(b)“Pharmacy benefit management” means the administration or management of prescription drug benefits. Pharmacy benefit management shall include the procurement of prescription drugs at a negotiated rate for dispensation within this state, the processing
of prescription drug claims, and the administration of payments related to prescription drug claims.
(c)“Pharmacy benefit manager” means a person, business, or other entity described in subdivision (j) of Section 4430 of the Business and Professions Code, except that it shall not include a health care service plan or health insurer if the health care service plan or health insurer offers or provides pharmacy benefit management services and if those services are offered or provided only to enrollees, subscribers, policyholders, or insureds who are also covered by health benefits offered or provided by that health care service plan or health insurer, nor shall it include an affiliate, subsidiary, or other related entity of the health care service plan or health insurer that would otherwise qualify as a pharmacy benefit manager as long as
the services offered or provided by the related entity are offered or provided only to enrollees, subscribers, policyholders, or insureds who are also covered by the health
benefits offered or provided by that health care service plan or health insurer.
(d)“Purchaser” means a person who enters into an agreement with a pharmacy benefit manager for the provision of pharmacy benefit management services.
A pharmacy benefit manager shall disclose to a purchaser, in writing and no less frequently than on a quarterly basis, all of the following:
(a)The aggregate amount of all rebates and other retrospective utilization discounts that the pharmacy benefit manager receives, directly or indirectly, from a pharmaceutical manufacturer or labeler in connection with prescription drug benefits specific to the purchaser.
(b)The aggregate amount for each therapeutic class of all rebates and other retrospective utilization discounts that the pharmacy benefit manager receives, directly or indirectly, from a pharmaceutical
manufacturer or labeler for each therapeutic class of drugs related to prescription drug benefits specific to the purchaser. A therapeutic class shall include at least two drugs.
(c)The nature, type, and amount of all other revenue that the pharmacy benefit manager receives, directly or indirectly, from a pharmaceutical manufacturer or labeler in connection with prescription drug benefits related to the purchaser.
(d)Prescription drug utilization information related to utilization by the purchaser’s enrollees or insureds or the aggregate utilization data that is not specific to an individual consumer, prescriber, or purchaser.
(e)Administrative or other fees charged by the pharmacy benefit manager to the purchaser.
(f)Arrangements with prescribing providers, medical groups, individual practice associations, pharmacists, or other entities that are associated with activities of the pharmacy benefit manager to encourage formulary compliance or otherwise manage prescription drug benefits.
Except for utilization information, a pharmacy benefit manager need not make the disclosures required in Section 152001 unless and until the purchaser agrees, in writing, to maintain as confidential any proprietary information. That agreement may provide for equitable and legal remedies in the event of a violation of the agreement. That agreement may also include persons or entities with whom the
purchaser contracts to provide consultation regarding pharmacy services. Proprietary information includes trade secrets, and information on pricing, costs, revenues, taxes, market share, negotiating strategies, customers, and personnel held by a pharmacy benefit manager and used for its business purposes.
All disclosures made pursuant to this division shall comply with the privacy standards of the federal Health Insurance Portability and Accountability Act of 1996 (Public Law 104-191)(HIPAA).