5857-S.E AMS PARL NEED 103
ESSB 5857 - S AMD 467
By Senator Parlette
Strike everything after the enacting clause and insert the following:
"Sec. 1. RCW 19.340.030 and 2014 c 213 s 2 are each amended to read as follows:
(1) To conduct
business in this state, a pharmacy benefit manager must register with the ((department
of revenue's business licensing service)) office of the insurance
commissioner and annually renew the registration.
(2) To register under this section, a pharmacy benefit manager must:
(a) Submit an application requiring the following information:
(i) The identity of the pharmacy benefit manager;
(ii) The name, business address, phone number, and contact person for the pharmacy benefit manager; and
(iii) Where applicable, the federal tax employer identification number for the entity; and
(b) Pay a
registration fee ((of two hundred dollars)) established in rule by
the commissioner. The registration fee must be set to allow the registration
and oversight activities to be self-supporting.
(3) To renew a
registration under this section, a pharmacy benefit manager must pay a renewal
fee ((of two hundred dollars)) established in rule by the
commissioner. The renewal fee must be set to allow the renewal and oversight
activities to be self-supporting.
(4) All receipts
from registrations and renewals collected by the ((department)) commissioner
must be deposited into the ((business license account created in RCW
19.02.210)) insurance commissioner's regulatory account created in RCW
48.02.190.
NEW SECTION. Sec. 2. A new section is added to chapter 19.340 RCW to read as follows:
(1) The commissioner shall have enforcement authority over this chapter and shall have authority to render a binding decision in any dispute between a pharmacy benefit manager, or third-party administrator of prescription drug benefits, and a pharmacy arising out of an appeal regarding drug pricing and reimbursement.
(2) Any person, corporation, or third-party administrator of prescription drug benefits, pharmacy benefit manager, or business entity which violates any provision of this chapter shall be subject to a civil penalty in the amount of one thousand dollars for each act in violation of this chapter or, if the violation was knowing and willful, a civil penalty of five thousand dollars for each violation of this chapter.
Sec. 3. RCW 19.340.010 and 2014 c 213 s 1 are each amended to read as follows:
The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
(1) "Claim" means a request from a pharmacy or pharmacist to be reimbursed for the cost of filling or refilling a prescription for a drug or for providing a medical supply or service.
(2) "Commissioner" means the insurance commissioner established in chapter 48.02 RCW.
(3) "Insurer" has the same meaning as in RCW 48.01.050.
(((3))) (4)
"Pharmacist" has the same meaning as in RCW 18.64.011.
(((4))) (5)
"Pharmacy" has the same meaning as in RCW 18.64.011.
(((5))) (6)(a)
"Pharmacy benefit manager" means a person that contracts with
pharmacies on behalf of an insurer, a third-party payor, or the prescription
drug purchasing consortium established under RCW 70.14.060 to:
(i) Process claims for prescription drugs or medical supplies or provide retail network management for pharmacies or pharmacists;
(ii) Pay pharmacies or pharmacists for prescription drugs or medical supplies; or
(iii) Negotiate rebates with manufacturers for drugs paid for or procured as described in this subsection.
(b) "Pharmacy benefit manager" does not include a health care service contractor as defined in RCW 48.44.010.
(((6))) (7)
"Third-party payor" means a person licensed under RCW 48.39.005.
Sec. 4. RCW 19.340.100 and 2014 c 213 s 10 are each amended to read as follows:
(1) As used in this section:
(a) "Denial" of an appeal includes failing to reimburse a pharmacy or pharmacist and reimbursing a pharmacy or pharmacist for less than the amount that the pharmacy or pharmacist paid to the supplier of the drug.
(b) "List" means the list of drugs for which maximum allowable costs have been established.
(((b))) (c)
"Maximum allowable cost" means the maximum amount that a pharmacy
benefit manager will reimburse a pharmacy for the cost of a drug.
(((c))) (d)
"Multiple source drug" means a therapeutically equivalent drug that
is available from at least two manufacturers.
(((d))) (e)
"Network pharmacy" means a retail drug outlet licensed as a pharmacy
under RCW 18.64.043 that contracts with a pharmacy benefit manager.
(((e))) (f)
"Therapeutically equivalent" has the same meaning as in RCW
69.41.110.
(2) A pharmacy benefit manager:
(a) May not
place a drug on a list unless ((are is [there are])) there are at
least two therapeutically equivalent multiple source drugs, or at least one
generic drug available from only one manufacturer, generally available for
purchase by network pharmacies from national or regional wholesalers;
(b) Shall ensure
that all drugs on a list are ((generally)) readily available for
purchase by network pharmacies in this state from national or regional
wholesalers that serve community pharmacies in Washington;
(c) Shall ensure that all drugs on a list are not obsolete;
(d) Shall make available to each network pharmacy at the beginning of the term of a contract, and upon renewal of a contract, the sources utilized to determine the maximum allowable cost pricing of the pharmacy benefit manager;
(e) Shall make a list available to a network pharmacy upon request in a format that is readily accessible to and usable by the network pharmacy;
(f) Shall update each list maintained by the pharmacy benefit manager every seven business days and make the updated lists, including all changes in the price of drugs, available to network pharmacies in a readily accessible and usable format;
(g) Shall ensure that dispensing fees are not included in the calculation of maximum allowable cost.
(3) A pharmacy benefit manager must establish a process by which a network pharmacy may appeal its reimbursement for a drug subject to maximum allowable cost pricing. A network pharmacy may appeal a maximum allowable cost if the reimbursement for the drug is less than the net amount that the network pharmacy paid to the supplier of the drug. The pharmacy benefit manager shall reimburse the network pharmacy or pharmacist the amount that the network pharmacy or pharmacist paid to the supplier of the drug if the network pharmacy or pharmacist can demonstrate that it is unable to purchase a therapeutically equivalent interchangeable product from its supplier at the pharmacy benefit manager's list price. An appeal requested under this section must be completed within thirty calendar days of the pharmacy making the claim for which an appeal has been requested. If after thirty days the network pharmacy has not received the decision on the appeal from the pharmacy benefit manager, then the appeal is considered denied.
(4) A pharmacy benefit manager must provide as part of the appeals process established under subsection (3) of this section:
(a) A telephone number at which a network pharmacy may contact the pharmacy benefit manager and speak with an individual who is responsible for processing appeals;
(b) A final response to an appeal of a maximum allowable cost within seven business days; and
(c) If the appeal is denied, the reason for the denial and the national drug code of a drug that may be purchased by similarly situated pharmacies at a price that is equal to or less than the maximum allowable cost.
(5)(a) If an appeal is upheld under this section, the pharmacy benefit manager shall make an adjustment on a date no later than one day after the date of determination. The pharmacy benefit manager shall make the adjustment effective for all network pharmacies in this state.
(b) If the request for an adjustment has come from a critical access pharmacy, as defined by the state health care authority by rule for purposes related to the prescription drug purchasing consortium established under RCW 70.14.060, the adjustment approved under (a) of this subsection shall apply only to critical access pharmacies.
(6) If a network pharmacy appeal to the pharmacy benefit manager is denied or if the network pharmacy is unsatisfied with the outcome of the appeal, the pharmacy or pharmacist may dispute the denial and request review by the commissioner.
(a) All relevant information from the parties may be presented to the commissioner, and the commissioner may enter an order directing the pharmacy benefit manager to make an adjustment to the disputed claim, deny the network pharmacy appeal, or take other actions deemed fair and equitable. An appeal requested under this section must be completed within thirty calendar days of the pharmacy making the claim for which an appeal has been requested.
(b) Upon resolution of the dispute, the commissioner shall provide a copy of the decision to both parties within seven calendar days.
(7) This section does not apply to the state medical assistance program.
NEW SECTION. Sec. 5. A new section is added to chapter 48.02 RCW to read as follows:
(1) The commissioner shall accept registration of pharmacy benefit managers as established in RCW 19.340.030 and receipts shall be deposited in the insurance commissioner's regulatory account.
(2) The commissioner shall have enforcement authority over chapter 19.340 RCW consistent with requirements established in section 2 of this act.
(3) The commissioner may write rules to implement chapter 19.340 RCW and to establish registration and renewal fees that ensure the registration, renewal, and oversight activities are self-supporting.
NEW SECTION. Sec. 6. The joint select committee on health care oversight must convene a stakeholder work group comprised of participants in the prescription drug delivery chain, including pharmacy benefit managers, drug manufacturers, wholesalers, pharmacy service administrative organizations, pharmacies, health plans, and other payors. The work group assignments may include, but are not limited to the following:
(1) Review the entire drug supply chain including plan and pharmacy benefit manager reimbursements to independent pharmacies, wholesaler or pharmacy service administrative organization price to independent pharmacies, and drug manufacturer prices to independent pharmacies;
(2) Discuss suggestions that recognize the unique nature of small retail pharmacies and possible options that support a viable business model that do not increase the cost of pharmacy products;
(3) Review the availability of all drugs on the list and list prices for retail pharmacies;
(4) Review the phone contacts and standards for response times and availability;
(5) Review the pharmacy acquisition cost from national or regional wholesalers that serve retail pharmacies in Washington, and consider when or whether to make an adjustment and under what standards. The review may assess the timing of pharmacy purchases of products and the relative risk of list price changes related to the timing of dispensing the products; and
(6) The work group must provide periodic updates to the joint select committee on health care oversight.
NEW SECTION. Sec. 7. Section 1 of this act takes effect January 1, 2016."
ESSB 5857 S AMD
By Senator Parlette
On page 1, line 2 of the title, after "managers;" strike the remainder of the title and insert "amending RCW 19.340.030, 19.340.010, and 19.340.100; adding a new section to chapter 19.340 RCW; adding a new section to chapter 48.02 RCW; creating a new section; prescribing penalties; and providing an effective date."
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EFFECT: · Defines "denial" of an appeal to include failing to reimburse a pharmacy or pharmacist and reimbursing a pharmacy or pharmacist for less than the amount the pharmacy or pharmacist paid to the supplier. · Modifies references to community pharmacies to network pharmacies · Requires as part of the appeals process that a pharmacy benefit manager (PBM) reimburse the amount that the network pharmacy or pharmacist paid to the supplier if the network pharmacy or pharmacist can demonstrate that it is unable to purchase a therapeutically equivalent interchangeable product from its supplier at the PBM's maximum allowable cost. If after thirty days the network pharmacy has not received the decision on the appeal from the PBM, then the appeal is considered denied. · If the network pharmacy appeal is denied or the network pharmacy is unsatisfied with the outcome of the appeal, the network pharmacy may request review of the dispute by the Commissioner. · The Commissioner may enter an order directing the PBM to make an adjustment to the disputed claim (not all MAC prices)… An appeal must be completed within thirty calendar days.
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