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Senate of Pennsylvania
Session of 2013 - 2014 Regular Session


Posted: June 25, 2013 02:58 PM
From: Senator Robert M. Tomlinson
To: All Senate members
Subject: Pharmacy Benefit Manager Act
Please join me in cosponsoring the Pharmacy Benefit Manager Act. Currently there is no statutory requirement for oversight of Pharmacy Benefit Managers.

This legislation would regulate businesses (PBM) that procure prescription drugs at a negotiated contracted rate for dispensation to covered individuals; administer or manage drug benefits or provide services with regard to the administration of pharmacy benefits such as claims processing utilization and quality assurances. They might also perform rebate contracting, disease management programs and setting pharmacy reimbursement pricing.

Authority to provide services would require a PBM to obtain and maintain a certificate of authority as a preferred provider organization subject to the Insurance Law. In certain instances they will need to provide a certificate of authority as risk bearing preferred provider organization.

A PBM must apply to the Department including at a minimum the following information:
If it maintains a mail order pharmacy , the license number of all mail order pharmacies owned by the PBM;
Basic organizational documents;
A certificate of compliance that the PBM’s pharmacist holds a current Pennsylvania pharmacist license;
A detailed description of claims processing services, pharmacy services audit procedures for network pharmacies or other administrative services;
All incentive arrangements or programs such as rebates, discounts received with any pharmaceutical company or insurer that relates to prescription drug or device services;
A statement of income to show financial stability.

The legislation also contains certain prohibitions for the operation of the business of a PBM, and a standard of practice. The bill also sets out a procedure for the treatment of an individual’s personal health care information.

Finally the bill addresses the issue of maximum allowable cost list pricing disclosures.

The bill would take effect in 90 days.

Introduced as SB1089