Bill Text: IL HB3572 | 2017-2018 | 100th General Assembly | Introduced
Bill Title: Amends the Illinois Insurance Code. Provides regulation for the creation of a list of drugs used to set the maximum allowable cost on which reimbursement to a pharmacy or pharmacist may be based. Provides that before a pharmacy benefits manager places or continues a particular drug on a maximum allowable cost list, the drug shall meet specified requirements. Provides for the duties of a pharmacy benefits manager in his or her use of a maximum allowable cost list. Provides for 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. Provides that a pharmacy benefits manager shall not reimburse a pharmacy or pharmacist in this State in an amount less than the amount that the pharmacy benefits manager reimburses a pharmacy benefits manager affiliate for providing the same pharmacist services. Provides that a pharmacy or pharmacist may decline to provide 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. Provides that a violation of the provisions concerning maximum allowable cost lists and pharmacy benefits managers is a deceptive trade practice. Amends the Uniform Deceptive Trade Practices Act to make a conforming change. Defines terms.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Failed) 2019-01-08 - Session Sine Die [HB3572 Detail]
Download: Illinois-2017-HB3572-Introduced.html
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1 | AN ACT concerning regulation.
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2 | Be it enacted by the People of the State of Illinois,
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3 | represented in the General Assembly:
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4 | Section 5. The Illinois Insurance Code is amended by adding | ||||||||||||||||||||||||||
5 | Section 512-11 as follows:
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6 | (215 ILCS 5/512-11 new) | ||||||||||||||||||||||||||
7 | Sec. 512-11. Maximum allowable cost list; pharmacy | ||||||||||||||||||||||||||
8 | benefits manager. | ||||||||||||||||||||||||||
9 | (a) As used in this Section: | ||||||||||||||||||||||||||
10 | "Maximum allowable cost list" means a listing of drugs | ||||||||||||||||||||||||||
11 | used by a pharmacy benefits manager setting the maximum | ||||||||||||||||||||||||||
12 | allowable cost on which reimbursement to a pharmacy or | ||||||||||||||||||||||||||
13 | pharmacist may be based. | ||||||||||||||||||||||||||
14 | "Pharmaceutical wholesaler" means a person or entity | ||||||||||||||||||||||||||
15 | that sells and distributes prescription pharmaceutical | ||||||||||||||||||||||||||
16 | products, including, but not limited to, a full line of | ||||||||||||||||||||||||||
17 | brand-name, generic, and over-the-counter pharmaceuticals, | ||||||||||||||||||||||||||
18 | and that offers regular and private delivery to a pharmacy. | ||||||||||||||||||||||||||
19 | "Pharmacy acquisition cost" means the amount that a | ||||||||||||||||||||||||||
20 | pharmaceutical wholesaler charges for a pharmaceutical | ||||||||||||||||||||||||||
21 | product as listed on the pharmacy's billing invoice. | ||||||||||||||||||||||||||
22 | "Pharmacy benefits manager" means an entity that | ||||||||||||||||||||||||||
23 | administers or manages a pharmacy benefits plan or program. |
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1 | "Pharmacy benefits manager affiliate" means a pharmacy | ||||||
2 | or pharmacist that directly or indirectly, through one or | ||||||
3 | more intermediaries, owns or controls, is owned or | ||||||
4 | controlled by, or is under common ownership or control with | ||||||
5 | a pharmacy benefits manager. | ||||||
6 | "Pharmacy benefits plan or program" means a plan or | ||||||
7 | program that pays for, reimburses, covers the cost of, or | ||||||
8 | otherwise provides for pharmacist services to individuals | ||||||
9 | who reside in or are employed in this State. | ||||||
10 | (b) Before a pharmacy benefits manager places or continues | ||||||
11 | a particular drug on a maximum allowable cost list, the drug: | ||||||
12 | (1) shall be listed as therapeutically equivalent and | ||||||
13 | pharmaceutically equivalent "A" or "B" rated in the United | ||||||
14 | States Food and Drug Administration's most recent version | ||||||
15 | of the "Orange Book" or "Green Book" or has an NR or NA | ||||||
16 | rating by Medi-Span, Gold Standard, or a similar rating by | ||||||
17 | a nationally recognized reference; | ||||||
18 | (2) shall be available for purchase by each pharmacy in | ||||||
19 | the State from national or regional wholesalers operating | ||||||
20 | in Illinois; and | ||||||
21 | (3) shall not be obsolete. | ||||||
22 | (c) A pharmacy benefits manager shall: | ||||||
23 | (1) provide access to its maximum allowable cost list | ||||||
24 | to each pharmacy subject to the maximum allowable cost | ||||||
25 | list; | ||||||
26 | (2) update its maximum allowable cost list on a timely |
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1 | basis, but in no event longer than 7 calendar days from an | ||||||
2 | increase of 10% or more in the pharmacy acquisition cost or | ||||||
3 | from 60% or more of the pharmaceutical wholesalers doing | ||||||
4 | business in the State, or a change in the methodology on | ||||||
5 | 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 | ||||||
8 | maximum allowable cost list to receive prompt notification | ||||||
9 | of an update to the maximum allowable cost list; and | ||||||
10 | (4) provide a reasonable administrative appeal | ||||||
11 | procedure to allow pharmacies to challenge maximum | ||||||
12 | allowable costs and reimbursements made under a maximum | ||||||
13 | allowable cost for a specific drug or drugs as: (A) not | ||||||
14 | meeting the requirements of this Section or (B) being below | ||||||
15 | the pharmacy acquisition cost. The reasonable | ||||||
16 | administrative appeal procedure shall include: (i) a | ||||||
17 | dedicated telephone number and email address or website for | ||||||
18 | the purpose of submitting administrative appeals; (ii) the | ||||||
19 | ability to submit an administrative appeal directly to the | ||||||
20 | pharmacy benefits manager regarding the pharmacy benefits | ||||||
21 | plan or program or through a pharmacy service | ||||||
22 | administrative organization; and (iii) no less than 7 | ||||||
23 | business days to file an administrative appeal. | ||||||
24 | (d) The pharmacy benefits manager shall respond to the | ||||||
25 | challenge under paragraph (4) of subsection (c) within 7 | ||||||
26 | business days after receipt of the challenge. If a challenge is |
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1 | under paragraph (4) of subsection (c), the pharmacy benefits | ||||||
2 | manager shall within 7 business days after receipt of the | ||||||
3 | challenge either: | ||||||
4 | (1) if the appeal is upheld: | ||||||
5 | (A) make the change in the maximum allowable cost; | ||||||
6 | (B) permit the challenging pharmacy or pharmacist | ||||||
7 | to reverse and rebill the claim in question; | ||||||
8 | (C) provide the National Drug Code number that the | ||||||
9 | increase or change is based on to the pharmacy or | ||||||
10 | pharmacist; and | ||||||
11 | (D) make the change under subparagraph (A) of this | ||||||
12 | paragraph (1) effective for each similarly situated | ||||||
13 | pharmacy as defined by the payor subject to the maximum | ||||||
14 | allowable cost list; | ||||||
15 | (2) if the appeal is denied, provide the challenging | ||||||
16 | pharmacy or pharmacist the National Drug Code number and | ||||||
17 | the name of the national or regional pharmaceutical | ||||||
18 | wholesalers operating in Illinois that have the drug | ||||||
19 | currently in stock at a price below the maximum allowable | ||||||
20 | cost list; or | ||||||
21 | (3) if the National Drug Code number provided by the | ||||||
22 | pharmacy benefits manager is not available below the | ||||||
23 | pharmacy acquisition cost from the pharmaceutical | ||||||
24 | wholesaler from whom the pharmacy or pharmacist purchases | ||||||
25 | the majority of prescription drugs for resale, then the | ||||||
26 | pharmacy benefits manager shall adjust the maximum |
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1 | allowable cost list above the challenging pharmacy's | ||||||
2 | pharmacy acquisition cost and permit the pharmacy to | ||||||
3 | reverse and rebill each claim affected by the inability to | ||||||
4 | procure the drug at a cost that is equal to or less than | ||||||
5 | the previously challenged maximum allowable cost. | ||||||
6 | (e) A pharmacy benefits manager shall not reimburse a | ||||||
7 | pharmacy or pharmacist in this State in an amount less than the | ||||||
8 | amount that the pharmacy benefits manager reimburses a pharmacy | ||||||
9 | benefits manager affiliate for providing the same pharmacist | ||||||
10 | services. The amount shall be calculated on a per unit basis | ||||||
11 | based on the same generic product identifier or generic code | ||||||
12 | number. | ||||||
13 | (f) A pharmacy or pharmacist may decline to provide | ||||||
14 | pharmacist services to a patient or pharmacy benefits manager | ||||||
15 | if, as a result of a maximum allowable cost list, a pharmacy or | ||||||
16 | pharmacist is to be paid less than the pharmacy acquisition | ||||||
17 | cost of the pharmacy providing pharmacist services. | ||||||
18 | (g) A violation of this Section is a deceptive trade | ||||||
19 | practice under Section 2 of the Uniform Deceptive Trade | ||||||
20 | Practices Act.
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21 | Section 10. The Uniform Deceptive Trade Practices Act is | ||||||
22 | amended by changing Section 2 as follows:
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23 | (815 ILCS 510/2) (from Ch. 121 1/2, par. 312)
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24 | Sec. 2. Deceptive trade practices.
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1 | (a) A person engages in a deceptive trade practice when, in | ||||||
2 | the course
of his or her business, vocation, or occupation, the | ||||||
3 | person:
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4 | (1) passes off goods or services as those of another;
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5 | (2) causes likelihood of confusion or of | ||||||
6 | misunderstanding as to the
source, sponsorship, approval, | ||||||
7 | or certification of goods or services;
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8 | (3) causes likelihood of confusion or of | ||||||
9 | misunderstanding as to
affiliation, connection, or | ||||||
10 | association with or certification by another;
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11 | (4) uses deceptive representations or designations of | ||||||
12 | geographic origin
in connection with goods or services;
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13 | (5) represents that goods or services have | ||||||
14 | sponsorship, approval,
characteristics, ingredients, uses, | ||||||
15 | benefits, or quantities that they do
not have or that a | ||||||
16 | person has a sponsorship, approval, status, affiliation,
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17 | or connection that he or she does not have;
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18 | (6) represents that goods are original or new if they | ||||||
19 | are deteriorated,
altered, reconditioned, reclaimed, used, | ||||||
20 | or secondhand;
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21 | (7) represents that goods or services are of a | ||||||
22 | particular standard,
quality, or grade or that goods are a | ||||||
23 | particular style or model, if they
are of another;
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24 | (8) disparages the goods, services, or business of | ||||||
25 | another by false
or misleading representation of fact;
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26 | (9) advertises goods or services with intent not to |
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1 | sell them as
advertised;
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2 | (10) advertises goods or services with intent not to | ||||||
3 | supply reasonably
expectable public demand, unless the | ||||||
4 | advertisement discloses a limitation
of quantity;
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5 | (11) makes false or misleading statements of fact | ||||||
6 | concerning
the reasons for, existence of, or amounts of | ||||||
7 | price reductions;
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8 | (12) engages in any other conduct which similarly | ||||||
9 | creates a likelihood
of confusion or misunderstanding ; or .
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10 | (13) engages in conduct as a pharmacy benefits manager | ||||||
11 | that is in violation of Section 512-11 of the Illinois | ||||||
12 | Insurance Code. | ||||||
13 | (b) In order to prevail in an action under this Act, a | ||||||
14 | plaintiff
need not prove competition between the parties or | ||||||
15 | actual confusion or
misunderstanding.
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16 | (c) This Section does not affect unfair trade practices | ||||||
17 | otherwise
actionable at common law or under other statutes of | ||||||
18 | this State.
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19 | (Source: P.A. 92-16, eff. 6-28-01)
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