PRINTER'S NO. 2833
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
1993
Session of
2024
INTRODUCED BY BENHAM, GAYDOS, KENYATTA, BURGOS, HARKINS,
DONAHUE, MADDEN, MAJOR, SANCHEZ, CERRATO, HILL-EVANS,
D'ORSIE, CIRESI, GREEN, DALEY, MATZIE, SOLOMON, MIHALEK,
ECKER, McNEILL, SCHLOSSBERG, PICKETT, PISCIOTTANO, WEBSTER,
HOHENSTEIN, KRUEGER, BOROWSKI, NEILSON, FEE, KIM, KHAN,
BERNSTINE, MENTZER, O'MARA, FLEMING, GROVE, MULLINS,
KOSIEROWSKI, ISAACSON, HEFFLEY, OBERLANDER, ARMANINI,
GREGORY, E. NELSON, STAATS, WAXMAN, STEELE, SALISBURY,
KINKEAD, McANDREW, KAUFFMAN, GIRAL, DELOZIER AND FRITZ,
APRIL 3, 2024
REFERRED TO COMMITTEE ON HEALTH, APRIL 3, 2024
AN ACT
Amending the act of November 21, 2016 (P.L.1318, No.169),
entitled "An act providing for pharmacy audit procedures, for
registration of pharmacy benefits managers and auditing
entities, for maximum allowable cost transparency and for
prescription drugs reimbursed under the PACE and PACENET
program; and making related repeals," further providing for
title of act; in preliminary provisions, further providing
for short title and for definitions; in pharmacy audits,
further providing for limitations; and providing for pharmacy
benefits manager contract requirements and prohibited acts.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. The title and section 101 of the act of November
21, 2016 (P.L.1318, No.169), known as the Pharmacy Audit
Integrity and Transparency Act, are amended to read:
AN ACT
Providing for pharmacy audit procedures, for registration of
pharmacy benefits managers and auditing entities, for maximum
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allowable cost transparency and for prescription drugs
reimbursed under the PACE and PACENET program and for
pharmacy benefit managers contract requirements and
prohibited activities; and making related repeals.
Section 101. Short title.
This act shall be known and may be cited as the [Pharmacy
Audit Integrity and Transparency] Community Pharmacy Protection
Act.
Section 2. Section 103 of the act is amended by adding
definitions to read:
Section 103. Definitions.
The following words and phrases when used in this act shall
have the meanings given to them in this section unless the
context clearly indicates otherwise:
* * *
" Brand effective rate." The reimbursement rate paid to the
pharmacy based on a percentage of the average wholesale cost for
brand-name drugs dispensed by the pharmacy under the contract
with the pharmacy benefit manager.
* * *
"Effective rate contract." A contract that sets a specific
discount rate for all prescriptions filled by a member pharmacy
during the term of the contract.
* * *
"Generic effective rate." The reimbursement rate paid to the
pharmacy based on a percentage of the average wholesale cost for
generic drugs dispensed by the pharmacy under the contract with
the pharmacy benefit manager.
* * *
"Patient steering." One of the following:
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(1) When a pharmacy benefit manager directs a patient to
use a preferred pharmacy through mandatory mail order
requirements or the creation by the PBM of a restricted
network that consists only of pharmacies approved by the PBM.
(2) The use of co-pay differentials between PBM-
affiliated pharmacies and nonaffiliated pharmacies.
* * *
"Spread pricing." An act of a pharmacy benefit manager
reimbursing a pharmacy for a prescription and then billing an
insurer or an employer that provides health insurance at a
higher price for the same prescription.
Section 3. Section 303 of the act is amended by adding a
subsection to read:
Section 303. Limitations.
* * *
(c) Scrivener error.--A scrivener error made by a pharmacy
not attributed to fraud, waste or abuse that is discovered
during an audit of the pharmacy by the PBM shall result in the
PBM recouping the dispensing fee for that particular
transaction, not the entire amount of the medication received by
the patient.
Section 4. The act is amended by adding a chapter to read:
CHAPTER 6
PHARMACY BENEFITS MANAGER CONTRACT
REQUIREMENTS AND PROHIBITED ACTS
Section 601. Contract provisions.
A contract between a pharmacy benefit manager or a designee
of the pharmacy benefit manager and a pharmacy may not:
(1) Require participation in the PBM's network
contingent on the pharmacy signing either an effective rate
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contract or a contract based on the National Average Drug
Acquisition Cost guidelines.
(2) Include provisions allowing for retroactive
recoupment of money paid to a pharmacy by the PBM, unless
both parties agree to that provision.
(3) Base reimbursement upon general effective rate or
the brand effective rate as a condition of entering a
network, unless both parties agree to that provision. Any
additional fees must be disclosed and applied at the time of
the adjudication of the claim. Fees may include:
(i) Transaction fees.
(ii) Chargebacks due to recalculation of the cost of
the ingredients used in a prescription drug.
(iii) Adjustments in the general effective rate,
brand effective rates or direct and indirect remuneration
fees made by the PBM.
Section 602. Spread pricing participation prohibited.
A pharmacy benefit manager may not conduct or participate in
spread pricing.
Section 603. Patient steering prohibited.
A pharmacy benefit manager may not conduct or participate in
patient steering.
Section 604. Duties of the department.
The department shall:
(1) Develop a process for receiving, hearing and
resolving complaints a pharmacy filed against a PBM.
(2) Have the ability to set fixed amounts for PBM claim
processing fees and administrative fees.
(3) Develop a Statewide National Average Drug
Acquisition Cost guideline that uses wholesale pricing based
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on manufacturer's invoices of those manufacturers who ship
drugs to this Commonwealth.
Section 605. Duties of pharmacy benefit managers.
Pharmacy benefit managers shall:
(1) Approve a request from a pharmacy to be a member of
the PBM's network within 30 days of the initial request to
join the network.
(2) Provide a dedicated telephone number and email
address for handling network admission requests.
Section 606. PBM for State Employee Health Plan.
A PBM hired for the State Employee Health Plan shall have a
transparent reimbursement methodology based on the National
Average Drug Acquisition Cost guidelines developed under
section 604(3) and a dispensing fee equal to or greater than the
maximum prevailing fee for service or PACE rate in this
Commonwealth.
Section 607. Reports by PBM.
A PBM shall report to the department the amount of rebates
and payments received from drug manufacturers and how the
rebates and payments were distributed by the PBM.
Section 5. This act shall take effect in 60 days.
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