Bill Text: IL HB3631 | 2023-2024 | 103rd General Assembly | Engrossed
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Amends the Pharmacy Benefit Managers Article of the Illinois Insurance Code. Provides that a pharmacy benefit manager may not retaliate against a pharmacist or pharmacy for disclosing information in a court, in an administrative hearing, before a legislative commission or committee, in any other proceeding, or to a government or law enforcement agency, if the pharmacist or pharmacy has reasonable cause to believe that the disclosed information is evidence of a violation of a State or federal law, rule, or regulation. Provides that a pharmacist or pharmacy shall make commercially reasonable efforts to limit the disclosure of confidential and proprietary information. Provides that retaliatory actions against a pharmacy or pharmacist include specified actions.
Spectrum: Strong Partisan Bill (Democrat 32-2)
Status: (Passed) 2023-08-04 - Public Act . . . . . . . . . 103-0453 [HB3631 Detail]
Download: Illinois-2023-HB3631-Engrossed.html
Bill Title: Amends the Pharmacy Benefit Managers Article of the Illinois Insurance Code. Provides that a pharmacy benefit manager may not retaliate against a pharmacist or pharmacy for disclosing information in a court, in an administrative hearing, before a legislative commission or committee, in any other proceeding, or to a government or law enforcement agency, if the pharmacist or pharmacy has reasonable cause to believe that the disclosed information is evidence of a violation of a State or federal law, rule, or regulation. Provides that a pharmacist or pharmacy shall make commercially reasonable efforts to limit the disclosure of confidential and proprietary information. Provides that retaliatory actions against a pharmacy or pharmacist include specified actions.
Spectrum: Strong Partisan Bill (Democrat 32-2)
Status: (Passed) 2023-08-04 - Public Act . . . . . . . . . 103-0453 [HB3631 Detail]
Download: Illinois-2023-HB3631-Engrossed.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 | ||||||
5 | changing Section 513b1 as follows:
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6 | (215 ILCS 5/513b1) | ||||||
7 | Sec. 513b1. Pharmacy benefit manager contracts. | ||||||
8 | (a) As used in this Section: | ||||||
9 | "340B drug discount program" means the program established
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10 | under Section 340B of the federal Public Health Service Act, | ||||||
11 | 42 U.S.C. 256b. | ||||||
12 | "340B entity" means a covered entity as defined in 42 | ||||||
13 | U.S.C. 256b(a)(4) authorized to participate in the 340B drug | ||||||
14 | discount program. | ||||||
15 | "340B pharmacy" means any pharmacy used to dispense 340B | ||||||
16 | drugs for a covered entity, whether entity-owned or external. | ||||||
17 | "Biological product" has the meaning ascribed to that term | ||||||
18 | in Section 19.5 of the Pharmacy Practice Act. | ||||||
19 | "Maximum allowable cost" means the maximum amount that a | ||||||
20 | pharmacy benefit manager will reimburse a pharmacy for the | ||||||
21 | cost of a drug. | ||||||
22 | "Maximum allowable cost list" means a list of drugs for | ||||||
23 | which a maximum allowable cost has been established by a |
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1 | pharmacy benefit manager. | ||||||
2 | "Pharmacy benefit manager" means a person, business, or | ||||||
3 | entity, including a wholly or partially owned or controlled | ||||||
4 | subsidiary of a pharmacy benefit manager, that provides claims | ||||||
5 | processing services or other prescription drug or device | ||||||
6 | services, or both, for health benefit plans. | ||||||
7 | "Retail price" means the price an individual without | ||||||
8 | prescription drug coverage would pay at a retail pharmacy, not | ||||||
9 | including a pharmacist dispensing fee. | ||||||
10 | "Third-party payer" means any entity that pays for | ||||||
11 | prescription drugs on behalf of a patient other than a health | ||||||
12 | care provider or sponsor of a plan subject to regulation under | ||||||
13 | Medicare Part D, 42 U.S.C. 1395w-101 , et seq. | ||||||
14 | (b) A contract between a health insurer and a pharmacy | ||||||
15 | benefit manager must require that the pharmacy benefit | ||||||
16 | manager: | ||||||
17 | (1) Update maximum allowable cost pricing information | ||||||
18 | at least every 7 calendar days. | ||||||
19 | (2) Maintain a process that will, in a timely manner, | ||||||
20 | eliminate drugs from maximum allowable cost lists or | ||||||
21 | modify drug prices to remain consistent with changes in | ||||||
22 | pricing data used in formulating maximum allowable cost | ||||||
23 | prices and product availability. | ||||||
24 | (3) Provide access to its maximum allowable cost list | ||||||
25 | to each pharmacy or pharmacy services administrative | ||||||
26 | organization subject to the maximum allowable cost list. |
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1 | Access may include a real-time pharmacy website portal to | ||||||
2 | be able to view the maximum allowable cost list. As used in | ||||||
3 | this Section, "pharmacy services administrative | ||||||
4 | organization" means an entity operating within the State | ||||||
5 | that contracts with independent pharmacies to conduct | ||||||
6 | business on their behalf with third-party payers. A | ||||||
7 | pharmacy services administrative organization may provide | ||||||
8 | administrative services to pharmacies and negotiate and | ||||||
9 | enter into contracts with third-party payers or pharmacy | ||||||
10 | benefit managers on behalf of pharmacies. | ||||||
11 | (4) Provide a process by which a contracted pharmacy | ||||||
12 | can appeal the provider's reimbursement for a drug subject | ||||||
13 | to maximum allowable cost pricing. The appeals process | ||||||
14 | must, at a minimum, include the following: | ||||||
15 | (A) A requirement that a contracted pharmacy has | ||||||
16 | 14 calendar days after the applicable fill date to | ||||||
17 | appeal a maximum allowable cost if the reimbursement | ||||||
18 | for the drug is less than the net amount that the | ||||||
19 | network provider paid to the supplier of the drug. | ||||||
20 | (B) A requirement that a pharmacy benefit manager | ||||||
21 | must respond to a challenge within 14 calendar days of | ||||||
22 | the contracted pharmacy making the claim for which the | ||||||
23 | appeal has been submitted. | ||||||
24 | (C) A telephone number and e-mail address or | ||||||
25 | website to network providers, at which the provider | ||||||
26 | can contact the pharmacy benefit manager to process |
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1 | and submit an appeal. | ||||||
2 | (D) A requirement that, if an appeal is denied, | ||||||
3 | the pharmacy benefit manager must provide the reason | ||||||
4 | for the denial and the name and the national drug code | ||||||
5 | number from national or regional wholesalers. | ||||||
6 | (E) A requirement that, if an appeal is sustained, | ||||||
7 | the pharmacy benefit manager must make an adjustment | ||||||
8 | in the drug price effective the date the challenge is | ||||||
9 | resolved and make the adjustment applicable to all | ||||||
10 | similarly situated network pharmacy providers, as | ||||||
11 | determined by the managed care organization or | ||||||
12 | pharmacy benefit manager. | ||||||
13 | (5) Allow a plan sponsor contracting with a pharmacy | ||||||
14 | benefit manager an annual right to audit compliance with | ||||||
15 | the terms of the contract by the pharmacy benefit manager, | ||||||
16 | including, but not limited to, full disclosure of any and | ||||||
17 | all rebate amounts secured, whether product specific or | ||||||
18 | generalized rebates, that were provided to the pharmacy | ||||||
19 | benefit manager by a pharmaceutical manufacturer. | ||||||
20 | (6) Allow a plan sponsor contracting with a pharmacy | ||||||
21 | benefit manager to request that the pharmacy benefit | ||||||
22 | manager disclose the actual amounts paid by the pharmacy | ||||||
23 | benefit manager to the pharmacy. | ||||||
24 | (7) Provide notice to the party contracting with the | ||||||
25 | pharmacy benefit manager of any consideration that the | ||||||
26 | pharmacy benefit manager receives from the manufacturer |
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1 | for dispense as written prescriptions once a generic or | ||||||
2 | biologically similar product becomes available. | ||||||
3 | (c) In order to place a particular prescription drug on a | ||||||
4 | maximum allowable cost list, the pharmacy benefit manager | ||||||
5 | must, at a minimum, ensure that: | ||||||
6 | (1) if the drug is a generically equivalent drug, it | ||||||
7 | is listed as therapeutically equivalent and | ||||||
8 | pharmaceutically equivalent "A" or "B" rated in the United | ||||||
9 | States Food and Drug Administration's most recent version | ||||||
10 | of the "Orange Book" or have an NR or NA rating by | ||||||
11 | Medi-Span, Gold Standard, or a similar rating by a | ||||||
12 | nationally recognized reference; | ||||||
13 | (2) the drug is available for purchase by each | ||||||
14 | pharmacy in the State from national or regional | ||||||
15 | wholesalers operating in Illinois; and | ||||||
16 | (3) the drug is not obsolete. | ||||||
17 | (d) A pharmacy benefit manager is prohibited from limiting | ||||||
18 | a pharmacist's ability to disclose whether the cost-sharing | ||||||
19 | obligation exceeds the retail price for a covered prescription | ||||||
20 | drug, and the availability of a more affordable alternative | ||||||
21 | drug, if one is available in accordance with Section 42 of the | ||||||
22 | Pharmacy Practice Act. | ||||||
23 | (e) A health insurer or pharmacy benefit manager shall not | ||||||
24 | require an insured to make a payment for a prescription drug at | ||||||
25 | the point of sale in an amount that exceeds the lesser of: | ||||||
26 | (1) the applicable cost-sharing amount; or |
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1 | (2) the retail price of the drug in the absence of | ||||||
2 | prescription drug coverage. | ||||||
3 | (f) Unless required by law, a contract between a pharmacy | ||||||
4 | benefit manager or third-party payer and a 340B entity or 340B | ||||||
5 | pharmacy shall not contain any provision that: | ||||||
6 | (1) distinguishes between drugs purchased through the | ||||||
7 | 340B drug discount program and other drugs when | ||||||
8 | determining reimbursement or reimbursement methodologies, | ||||||
9 | or contains otherwise less favorable payment terms or | ||||||
10 | reimbursement methodologies for 340B entities or 340B | ||||||
11 | pharmacies when compared to similarly situated non-340B | ||||||
12 | entities; | ||||||
13 | (2) imposes any fee, chargeback, or rate adjustment | ||||||
14 | that is not similarly imposed on similarly situated | ||||||
15 | pharmacies that are not 340B entities or 340B pharmacies; | ||||||
16 | (3) imposes any fee, chargeback, or rate adjustment | ||||||
17 | that exceeds the fee, chargeback, or rate adjustment that | ||||||
18 | is not similarly imposed on similarly situated pharmacies | ||||||
19 | that are not 340B entities or 340B pharmacies; | ||||||
20 | (4) prevents or interferes with an individual's choice | ||||||
21 | to receive a covered prescription drug from a 340B entity | ||||||
22 | or 340B pharmacy through any legally permissible means, | ||||||
23 | except that nothing in this paragraph shall prohibit the | ||||||
24 | establishment of differing copayments or other | ||||||
25 | cost-sharing amounts within the benefit plan for covered | ||||||
26 | persons who acquire covered prescription drugs from a |
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1 | nonpreferred or nonparticipating provider; | ||||||
2 | (5) excludes a 340B entity or 340B pharmacy from a | ||||||
3 | pharmacy network on any basis that includes consideration | ||||||
4 | of whether the 340B entity or 340B pharmacy participates | ||||||
5 | in the 340B drug discount program; | ||||||
6 | (6) prevents a 340B entity or 340B pharmacy from using | ||||||
7 | a drug purchased under the 340B drug discount program; or | ||||||
8 | (7) any other provision that discriminates against a | ||||||
9 | 340B entity or 340B pharmacy by treating the 340B entity | ||||||
10 | or 340B pharmacy differently than non-340B entities or | ||||||
11 | non-340B pharmacies for any reason relating to the | ||||||
12 | entity's participation in the 340B drug discount program. | ||||||
13 | As used in this subsection, "pharmacy benefit manager" and | ||||||
14 | "third-party payer" do not include pharmacy benefit managers | ||||||
15 | and third-party payers acting on behalf of a Medicaid program. | ||||||
16 | (g) A violation of this Section by a pharmacy benefit | ||||||
17 | manager constitutes an unfair or deceptive act or practice in | ||||||
18 | the business of insurance under Section 424. | ||||||
19 | (h) A provision that violates subsection (f) in a contract | ||||||
20 | between a pharmacy benefit manager or a third-party payer and | ||||||
21 | a 340B entity that is entered into, amended, or renewed after | ||||||
22 | July 1, 2022 shall be void and unenforceable. | ||||||
23 | (i)(1) A pharmacy benefit manager may not retaliate | ||||||
24 | against a pharmacist or pharmacy for disclosing information in | ||||||
25 | a court, in an administrative hearing, before a legislative | ||||||
26 | commission or committee, or in any other proceeding, if the |
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1 | pharmacist or pharmacy has reasonable cause to believe that | ||||||
2 | the disclosed information is evidence of a violation of a | ||||||
3 | State or federal law, rule, or regulation. | ||||||
4 | (2) A pharmacy benefit manager may not retaliate against a | ||||||
5 | pharmacist or pharmacy for disclosing information to a | ||||||
6 | government or law enforcement agency, if the pharmacist or | ||||||
7 | pharmacy has reasonable cause to believe that the disclosed | ||||||
8 | information is evidence of a violation of a State or federal | ||||||
9 | law, rule, or regulation. | ||||||
10 | (3) A pharmacist or pharmacy shall make commercially | ||||||
11 | reasonable efforts to limit the disclosure of confidential and | ||||||
12 | proprietary information. | ||||||
13 | (4) Retaliatory actions against a pharmacy or pharmacist | ||||||
14 | include cancellation of, restriction of, or refusal to renew | ||||||
15 | or offer a contract to a pharmacy solely because the pharmacy | ||||||
16 | or pharmacist has: | ||||||
17 | (A) made disclosures of information that the | ||||||
18 | pharmacist or pharmacy has reasonable cause to believe is | ||||||
19 | evidence of a violation of a State or federal law, rule, or | ||||||
20 | regulation; | ||||||
21 | (B) filed complaints with the plan or pharmacy benefit | ||||||
22 | manager; or | ||||||
23 | (C) filed complaints against the plan or pharmacy | ||||||
24 | benefit manager with the Department. | ||||||
25 | (j) (i) This Section applies to contracts entered into or | ||||||
26 | renewed on or after July 1, 2023 2022 . |
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1 | (k) (j) This Section applies to any group or individual | ||||||
2 | policy of accident and health insurance or managed care plan | ||||||
3 | that provides coverage for prescription drugs and that is | ||||||
4 | amended, delivered, issued, or renewed on or after July 1, | ||||||
5 | 2020.
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6 | (Source: P.A. 101-452, eff. 1-1-20; 102-778, eff. 7-1-22; | ||||||
7 | revised 8-19-22.)
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