Bill Text: OR HB4122 | 2012 | Regular Session | Introduced
Bill Title: Relating to pharmacy benefit managers; declaring an emergency.
Spectrum: Slight Partisan Bill (Democrat 5-3)
Status: (Failed) 2012-03-05 - In committee upon adjournment. [HB4122 Detail]
Download: Oregon-2012-HB4122-Introduced.html
76th OREGON LEGISLATIVE ASSEMBLY--2012 Regular Session
NOTE: Matter within { + braces and plus signs + } in an
amended section is new. Matter within { - braces and minus
signs - } is existing law to be omitted. New sections are within
{ + braces and plus signs + } .
LC 143
House Bill 4122
Sponsored by Representatives BAILEY, FREEMAN, Senator BATES,
Representative GREENLICK; Representatives COWAN, KOTEK,
THOMPSON (Presession filed.)
SUMMARY
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure as
introduced.
Requires pharmacy benefit managers conducting business in
Oregon to obtain license from and annually renew license with
State Board of Pharmacy. Requires board to examine and make
financial reports of licensed pharmacy benefit managers. Requires
disclosure of certain information to pharmacists, pharmacies or
providers of certain health insurance plans. Subjects pharmacy
benefit managers to general licensure and civil enforcement
powers of board.
Becomes operative July 1, 2012.
Declares emergency, effective on passage.
A BILL FOR AN ACT
Relating to pharmacy benefit managers; creating new provisions;
amending ORS 689.005, 689.832 and 689.995; and declaring an
emergency.
Be It Enacted by the People of the State of Oregon:
{ +
REGULATION OF PHARMACY BENEFIT MANAGERS + }
{ +
(Subjection to General Powers of State Board of Pharmacy) + }
SECTION 1. { + Sections 2 to 4 of this 2012 Act are added to
and made a part of ORS chapter 689. + }
{ +
(Licensure) + }
SECTION 2. { + (1) To conduct business in this state, a
pharmacy benefit manager must obtain a license from and annually
renew a license with the State Board of Pharmacy.
(2) To obtain a license under this section, a pharmacy benefit
manager must:
(a) Submit an application on a form prescribed by the board by
rule;
(b) Pay a licensure fee adopted by the board by rule;
(c) Submit the pharmacy benefit manager's balance sheet and
income statement from the preceding calendar year or from the
pharmacy benefit manager's preceding fiscal year, unless the
pharmacy benefit manager is in its first year of conducting
business; and
(d) Submit any other information relating to the operations of
the pharmacy benefit manager required by the board by rule.
(3) To renew a license under this section, a pharmacy benefit
manager must:
(a) Pay a renewal fee adopted by the board by rule;
(b) Submit the pharmacy benefit manager's balance sheet and
income statement from the preceding calendar year or from the
pharmacy benefit manager's preceding fiscal year; and
(c) Submit any other information relating to the operations of
the pharmacy benefit manager required by the board by rule.
(4)(a) A pharmacy benefit manager must annually renew a license
under this section:
(A) If the pharmacy benefit manager submits a balance sheet and
income statement from the preceding calendar year, by March 1; or
(B) If the pharmacy benefit manager submits a balance sheet and
income statement from the pharmacy benefit manager's preceding
fiscal year, within two months of the date on which the pharmacy
benefit manager's fiscal year ends.
(b) The board may extend the date by which a pharmacy benefit
manager must renew a license for good cause shown. An extension
made under this paragraph may not exceed 60 days.
(5) In adopting fees under subsections (2)(b) and (3)(a) of
this section, the board shall adopt fees that are reasonably
calculated to cover the costs incurred by the board in
administering sections 2 to 4 of this 2012 Act.
(6) In adopting rules under subsections (2)(d) and (3)(c) of
this section, the board shall adopt rules that permit a pharmacy
benefit manager to submit copies of substantially similar
information that the pharmacy benefit manager is required by the
laws of this state to submit to the Department of Consumer and
Business Services.
(7) The board may refuse to issue or renew, or may suspend,
revoke or restrict, the license of any pharmacy benefit manager
for violation of this section.
(8) The board shall deposit all moneys collected under this
section into the State Board of Pharmacy Account established in
ORS 689.139. + }
{ +
(Financial Examinations) + }
SECTION 3. { + (1) Using the information submitted by a
pharmacy benefit manager under section 2 of this 2012 Act, the
State Board of Pharmacy shall:
(a) Examine and make a report on the finances of each pharmacy
benefit manager that conducts business in this state; or
(b) If the pharmacy benefit manager is required to submit
substantially similar information under the laws of another
state, keep on file a notarized report prepared by a public body
of that state that is responsible for keeping and maintaining
that information.
(2) The board shall annually update reports made and kept under
this section.
(3) The board may contract with an independent financial
consultant to make an examination and a report under this
section. + }
{ +
(Disclosure Requirements) + }
SECTION 4. { + (1) As used in this section, 'trade secret' has
the meaning given that term in ORS 192.501.
(2) The State Board of Pharmacy, upon request, shall provide a
copy of any information submitted by a pharmacy benefit manager
under section 2 of this 2012 Act or prepared by the board or an
independent financial consultant under section 3 of this 2012 Act
to a pharmacist, pharmacy or provider of a health insurance plan
for which the pharmacy benefit manager processes or pays
prescription drug claims.
(3) The board may disclose any information submitted by a
pharmacy benefit manager under section 2 of this 2012 Act or
prepared by the board or an independent financial consultant
under section 3 of this 2012 Act that does not constitute a trade
secret to any person who requests the information, but the board
may disclose information that constitutes a trade secret only to
a pharmacist, pharmacy or the provider of a health insurance plan
for which the pharmacy benefit manager processes or pays
prescription drug claims. + }
{ +
(Definition of 'Pharmacy Benefit Manager') + }
SECTION 5. ORS 689.005 is amended to read:
689.005. As used in this chapter:
(1) 'Administer' means the direct application of a drug or
device whether by injection, inhalation, ingestion, or any other
means, to the body of a patient or research subject by:
(a) A practitioner or the practitioner's authorized agent; or
(b) The patient or research subject at the direction of the
practitioner.
(2) 'Approved continuing pharmacy education program' means
those seminars, classes, meetings, workshops and other
educational programs on the subject of pharmacy approved by the
board.
(3) 'Board of pharmacy' or 'board' means the State Board of
Pharmacy.
(4) 'Continuing pharmacy education' means:
(a) Professional, pharmaceutical post-graduate education in the
general areas of socio-economic and legal aspects of health care;
(b) The properties and actions of drugs and dosage forms; and
(c) The etiology, characteristics and therapeutics of the
disease state.
(5) 'Continuing pharmacy education unit' means the unit of
measurement of credits for approved continuing education courses
and programs.
(6) 'Deliver' or 'delivery' means the actual, constructive or
attempted transfer of a drug or device other than by
administration from one person to another, whether or not for a
consideration.
(7) 'Device' means an instrument, apparatus, implement,
machine, contrivance, implant, in vitro reagent or other similar
or related article, including any component part or accessory,
which is required under federal or state law to be prescribed by
a practitioner and dispensed by a pharmacist.
(8) 'Dispense' or 'dispensing' means the preparation and
delivery of a prescription drug pursuant to a lawful order of a
practitioner in a suitable container appropriately labeled for
subsequent administration to or use by a patient or other
individual entitled to receive the prescription drug.
(9) 'Distribute' means the delivery of a drug other than by
administering or dispensing.
(10) 'Drug' means:
(a) Articles recognized as drugs in the official United States
Pharmacopoeia, official National Formulary, official Homeopathic
Pharmacopoeia, other drug compendium or any supplement to any of
them;
(b) Articles intended for use in the diagnosis, cure,
mitigation, treatment or prevention of disease in a human or
other animal;
(c) Articles, other than food, intended to affect the structure
or any function of the body of humans or other animals; and
(d) Articles intended for use as a component of any articles
specified in paragraph (a), (b) or (c) of this subsection.
(11) 'Drug order' means a written order, in a hospital or other
inpatient care facility, for an ultimate user of any drug or
device issued and signed by a practitioner, or an order
transmitted by other means of communication from a practitioner,
that is immediately reduced to writing by a pharmacist, licensed
nurse or other practitioner.
(12) 'Drug outlet' means any pharmacy, nursing home, shelter
home, convalescent home, extended care facility, drug abuse
treatment center, penal institution, hospital, family planning
clinic, student health center, retail store, wholesaler,
manufacturer, mail-order vendor or other establishment with
facilities located within or out of this state that is engaged in
dispensing, delivery or distribution of drugs within this state.
(13) 'Drug room' means a secure and lockable location within an
inpatient care facility that does not have a licensed pharmacy.
(14) 'Electronically transmitted' or 'electronic transmission'
means a communication sent or received through technological
apparatuses, including computer terminals or other equipment or
mechanisms linked by telephone or microwave relays, or any
similar apparatus having electrical, digital, magnetic, wireless,
optical, electromagnetic or similar capabilities.
(15) 'Institutional drug outlet' means hospitals and inpatient
care facilities where medications are dispensed to another health
care professional for administration to patients served by the
hospitals or facilities.
(16) 'Intern' means a person who is enrolled in or has
completed a course of study at a school or college of pharmacy
approved by the board and who is licensed with the board as an
intern.
(17) 'Internship' means a professional experiential program
approved by the board under the supervision of a licensed
pharmacist registered with the board as a preceptor.
(18) 'Itinerant vendor' means a person who sells or distributes
nonprescription drugs by passing from house to house, or by
haranguing the people on the public streets or in public places,
or who uses the customary devices for attracting crowds,
recommending their wares and offering them for sale.
(19) 'Labeling' means the process of preparing and affixing of
a label to any drug container exclusive, however, of the labeling
by a manufacturer, packer or distributor of a nonprescription
drug or commercially packaged legend drug or device.
(20) 'Manufacture' means the production, preparation,
propagation, compounding, conversion or processing of a device or
a drug, either directly or indirectly by extraction from
substances of natural origin or independently by means of
chemical synthesis or by a combination of extraction and chemical
synthesis and includes any packaging or repackaging of the
substances or labeling or relabeling of its container, except
that this term does not include the preparation or compounding of
a drug by an individual for their own use or the preparation,
compounding, packaging or labeling of a drug:
(a) By a practitioner as an incident to administering or
dispensing of a drug in the course of professional practice; or
(b) By a practitioner or by the practitioner's authorization
under supervision of the practitioner for the purpose of or as an
incident to research, teaching or chemical analysis and not for
sale.
(21) 'Manufacturer' means a person engaged in the manufacture
of drugs.
(22) 'Nonprescription drug outlet' means shopkeepers and
itinerant vendors registered under ORS 689.305.
(23) 'Nonprescription drugs' means drugs which may be sold
without a prescription and which are prepackaged for use by the
consumer and labeled in accordance with the requirements of the
statutes and regulations of this state and the federal
government.
(24) 'Person' means an individual, corporation, partnership,
association or any other legal entity.
(25) 'Pharmacist' means an individual licensed by this state to
engage in the practice of pharmacy.
(26) 'Pharmacy' means a place that meets the requirements of
rules of the board, is licensed and approved by the board where
the practice of pharmacy may lawfully occur and includes
apothecaries, drug stores, dispensaries, hospital outpatient
pharmacies, pharmacy departments and prescription laboratories
but does not include a place used by a manufacturer or
wholesaler.
{ + (27) 'Pharmacy benefit manager' means an entity that
negotiates and executes contracts with pharmacies, manages
preferred drug lists or negotiates rebates with prescription drug
manufacturers. + }
{ - (27) - } { + (28) + } 'Pharmacy technician' means a
person licensed by the State Board of Pharmacy who assists the
pharmacist in the practice of pharmacy pursuant to rules of the
board.
{ - (28) - } { + (29) + } 'Practice of pharmacy' means:
(a) The interpretation and evaluation of prescription orders;
(b) The compounding, dispensing and labeling of drugs and
devices, except labeling by a manufacturer, packer or distributor
of nonprescription drugs and commercially packaged legend drugs
and devices;
(c) The prescribing and administering of vaccines and
immunizations pursuant to ORS 689.645;
(d) The administering of drugs and devices to the extent
permitted under ORS 689.655;
(e) The participation in drug selection and drug utilization
reviews;
(f) The proper and safe storage of drugs and devices and the
maintenance of proper records therefor;
(g) The responsibility for advising, where necessary or where
regulated, of therapeutic values, content, hazards and use of
drugs and devices;
(h) The monitoring of therapeutic response or adverse effect to
drug therapy; and
(i) The offering or performing of those acts, services,
operations or transactions necessary in the conduct, operation,
management and control of pharmacy.
{ - (29) - } { + (30) + } 'Practitioner' means a person
licensed and operating within the scope of such license to
prescribe, dispense, conduct research with respect to or
administer drugs in the course of professional practice or
research:
(a) In this state; or
(b) In another state or territory of the United States if the
person does not reside in Oregon and is registered under the
federal Controlled Substances Act.
{ - (30) - } { + (31) + } 'Preceptor' means a pharmacist or
a person licensed by the board to supervise the internship
training of a licensed intern.
{ - (31) - } { + (32) + } 'Prescription drug' or 'legend
drug' means a drug which is:
(a) Required by federal law, prior to being dispensed or
delivered, to be labeled with either of the following statements:
(A) 'Caution: Federal law prohibits dispensing without
prescription'; or
(B) 'Caution: Federal law restricts this drug to use by or on
the order of a licensed veterinarian'; or
(b) Required by any applicable federal or state law or
regulation to be dispensed on prescription only or is restricted
to use by practitioners only.
{ - (32) - } { + (33) + } 'Prescription' or 'prescription
drug order ' means a written, oral or electronically transmitted
direction, given by a practitioner authorized to prescribe drugs,
for the preparation and use of a drug. When the context requires,
' prescription' also means the drug prepared under such written,
oral or electronically transmitted direction.
{ - (33) - } { + (34) + } 'Retail drug outlet' means a
place used for the conduct of the retail sale, administering or
dispensing or compounding of drugs or chemicals or for the
administering or dispensing of prescriptions and licensed by the
board as a place wherein the practice of pharmacy may lawfully
occur.
{ - (34) - } { + (35) + } 'Shopkeeper' means a business or
other establishment, open to the general public, for the sale or
nonprofit distribution of drugs.
{ - (35) - } { + (36) + } 'Unit dose' means a sealed
single-unit container so designed that the contents are
administered to the patient as a single dose, direct from the
container. Each unit dose container must bear a separate label,
be labeled with the name and strength of the medication, the name
of the manufacturer or distributor, an identifying lot number
and, if applicable, the expiration date of the medication.
{ - (36) - } { + (37) + } 'Wholesale drug outlet' means any
person who imports, stores, distributes or sells for resale any
drugs including legend drugs and nonprescription drugs.
{ +
(Penalties) + }
SECTION 6. ORS 689.832 is amended to read:
689.832. (1) In addition to any other liability or penalty
provided by law, the State Board of Pharmacy may impose a civil
penalty for any violation of the provisions of this chapter or
ORS chapter 475 or any rule of the board. A civil penalty imposed
under this subsection may not exceed $1,000 for each violation by
an individual and $10,000 for each violation by a drug outlet
{ + or pharmacy benefit manager + }.
(2) All penalties recovered under this section shall be
deposited into the State Board of Pharmacy Account established in
ORS 689.139.
(3) Any civil penalty under this section shall be imposed in
the manner provided in ORS 183.745.
(4) Notwithstanding ORS 183.745, the person to whom the notice
is addressed shall have 10 days from the date of service of the
notice in which to make written application for a hearing before
the board.
SECTION 7. ORS 689.995 is amended to read:
689.995. (1) { + (a) + } Violation of any provision of this
chapter or of any rule of the State Board of Pharmacy is a
misdemeanor.
{ + (b) This subsection does not apply to sections 2 to 4 of
this 2012 Act or any rule adopted by the board under sections 2
to 4 of this 2012 Act. + }
(2) Failure to comply with any notice, citation or subpoena
issued by the board under ORS 689.135 (12) is a misdemeanor. Each
day during which the violation continues is a separate offense.
(3) { + (a) + } Refusal to furnish information required under
this chapter or willfully furnishing false information, is a
misdemeanor.
{ + (b) This subsection does not apply to sections 2 to 4 of
this 2012 Act. + }
(4) Any attempt to secure or the securing of registration or
licensure for any person under any certificate, license or permit
authorized by this chapter by making or causing to be made any
false representations is a misdemeanor.
{ +
OPERATIVE DATE + }
SECTION 8. { + (1) Sections 1 to 4 of this 2012 Act and the
amendments to ORS 689.005, 689.832 and 689.995 by sections 5 to 7
of this 2012 Act become operative on July 1, 2012.
(2) Notwithstanding the operative date specified in subsection
(1) of this section, the State Board of Pharmacy may take any
action before the operative date that is necessary to enable the
board to exercise, on and after the operative date specified in
subsection (1) of this section, all the duties, functions and
powers conferred on the board by sections 1 to 4 of this 2012 Act
and the amendments to ORS 689.005, 689.832 and 689.995 by
sections 5 to 7 of this 2012 Act. + }
{ +
UNIT CAPTIONS + }
SECTION 9. { + The unit captions used in this 2012 Act are
provided only for the convenience of the reader and do not become
part of the statutory law of this state or express any
legislative intent in the enactment of this 2012 Act. + }
{ +
EMERGENCY CLAUSE + }
SECTION 10. { + This 2012 Act being necessary for the
immediate preservation of the public peace, health and safety, an
emergency is declared to exist, and this 2012 Act takes effect on
its passage. + }
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