H1993B2833A04888 SFR:MAC 06/10/24 #90 A04888
AMENDMENTS TO HOUSE BILL NO. 1993
Sponsor: REPRESENTATIVE BENHAM
Printer's No. 2833
Amend Bill, page 1, line 9, by striking out "and" and
inserting
in registration, further providing for PBM and auditing entity
registration;
Amend Bill, page 1, line 10, by striking out the period after
"acts" and inserting
; in PBM cost transparency requirements, providing for
transparency report required; and, in enforcements, further
providing for scope of enforcement authority and providing
for regulations and for construction.
Amend Bill, page 2, line 7, by striking out "Community
Pharmacy Protection" and inserting
Pharmacy Benefit Reform
Amend Bill, page 2, lines 9 and 10, by striking out all of
said lines and inserting
Section 2. The definitions of "covered entity" and "health
insurance policy" in section 103 of the act are amended and the
section is amended by adding definitions to read:
Amend Bill, page 2, by inserting between lines 20 and 21
"Covered entity." A contract holder or policy holder
providing pharmacy benefits to a covered individual under a
health [insurance policy] benefit plan pursuant to a contract
administered by a pharmacy benefit manager.
* * *
Amend Bill, page 2, line 30; page 3, lines 1 through 11; by
striking out all of said lines on said pages and inserting
"Health benefit plan." A policy, contract, certificate or
agreement entered into, offered, issued or renewed by a health
insurer to provide, deliver, arrange for, pay for or reimburse
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any of the costs of physical, mental or behavioral health care
services. The term does not include Medicare supplement or
Civilian Health and Medical Program of the Uniformed Services
(CHAMPUS) supplement insurance.
* * *
["Health insurance policy." A policy, subscriber contract,
certificate or plan that provides prescription drug coverage.
The term includes both comprehensive and limited benefit health
policies.]
* * *
"Licensee." An entity subject to oversight of the department
under this act. The term includes:
(1) An auditing entity.
(2) A health insurer.
(3) A pharmacy benefit manager.
* * *
"Monetary advantage or penalty." An incentive or deterrent
imposed under a health benefit plan that affects a beneficiary's
choice of pharmacy. The term includes, but is not limited to, a
higher copayment, a waiver of a copayment, a reduction in
reimbursement for services, a requirement or limit on the number
of days of a drug supply for which reimbursement will be allowed
or a promotion of one participating pharmacy over another by
these methods.
* * *
"Spread pricing." A model of prescription drug pricing in
which the PBM charges a health benefit plan or health insurer a
contracted price for prescription drugs and the contracted price
for the prescription drugs differs from the amount the PBM
directly or indirectly pays the pharmacist or pharmacy for
prescription drugs and related pharmacist services.
Amend Bill, page 3, line 16, by striking out "Scrivener
error.--A scrivener" and inserting
Scrivener's error.--A scrivener's
Amend Bill, page 3, line 20, by striking out "of" and
inserting
for
Amend Bill, page 3, by inserting between lines 21 and 22
Section 4. Section 501(b)(3) of the act is amended to read:
Section 501. PBM and auditing entity registration.
* * *
(b) Term and fee.--
* * *
(3) The amount of the initial application fee and
renewal application fee shall be sufficient to fund the
department's duties in relation to its responsibilities under
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this chapter but may not exceed [$1,000] $10,000.
* * *
Amend Bill, page 3, line 22, by striking out "4" and
inserting
5
Amend Bill, page 3, line 27, by striking out "pharmacy
benefit manager" and inserting
PBM
Amend Bill, page 3, line 28, by striking out "pharmacy
benefit manager" and inserting
PBM
Amend Bill, page 4, line 17, by striking out "participation"
Amend Bill, page 4, lines 18 through 30; page 5, lines 1
through 20; by striking out all of said lines on said pages and
inserting
A health benefit plan, health insurer or PBM contracting with
a health benefit plan or health insurer may not utilize any form
of spread pricing in this Commonwealth.
Section 603. Patient steering prohibited.
A health benefit plan, health insurer or PBM contracting with
a health benefit plan or health insurer may not:
(1) Require a covered individual, as a condition of
payment or reimbursement, to purchase pharmacist services,
including, but not limited to, prescription drugs,
exclusively through a mail-order pharmacy or PBM affiliate.
(2) Prohibit or limit any covered individual from
selecting an in-network pharmacy or in-network pharmacist of
the covered individual's choice who meets and agrees to the
terms and conditions, including reimbursements, in the PBM's
contract.
(3) Impose a monetary advantage or penalty under a
health benefit plan that affects a covered individual's
choice of pharmacy among those pharmacies that have chosen to
contract with the PBM under the same terms and conditions,
including reimbursements.
(4) Use a covered individual's pharmacy services data
collected under claims processing services for the purpose of
soliciting, marketing or referring the covered individual to
a mail-order pharmacy or PBM affiliate, except that a health
benefit plan or health insurer may use pharmacy services data
for the purpose of administering the health benefit plan.
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Section 604. Clawbacks prohibited.
(a) General rule.--A health benefit plan, health insurer or
PBM contracting with a health benefit plan or health insurer may
not require cost-sharing in an amount or direct a pharmacy to
collect cost-sharing in an amount, greater than the lesser of
either of the following from an individual purchasing a
prescription drug:
(1) The amount an individual would pay for the
prescription drug if the prescription drug were to be
purchased without coverage under a health benefit plan.
(2) The net reimbursement paid to the pharmacy for the
prescription drug by the health insurer or PBM.
(b) Duty when filling a prescription.--When filling a
prescription, if a pharmacist, pharmacy intern or technician
determines that information indicating that the cost-sharing
amount required by the patient's health benefit plan exceeds the
amount that may otherwise be charged for the same prescription
drug, both of the following shall apply:
(1) The pharmacist, pharmacy intern or technician shall
notify the patient.
(2) The patient may not be charged the higher amount.
Section 605. Network adequacy.
(a) General rule.--A PBM shall establish a reasonably
adequate and accessible PBM network for the provision of
prescription drugs under a health benefit plan that shall
provide for convenient patient access to pharmacies within a
reasonable distance from a patient's residence in accordance
with the following requirements:
(1) A mail-order pharmacy shall not be included in the
calculations determining PBM network adequacy.
(2) The network may not be limited to affiliated
pharmacies only.
(3) The network shall meet or exceed the requirements of
42 CFR 423.120(a)(1) (relating to access to covered Part D
drugs) or successor regulation.
(b) Report requirement.--Beginning April 1, 2026, and
annually thereafter, a PBM shall file with the department a
network adequacy report describing the PBM network and the PBM
network's accessibility in this Commonwealth on a form
prescribed by the department, which shall be posted on the
department's publicly accessible Internet website.
Section 606. Regulations.
The department may promulgate regulations as necessary and
appropriate to carry out this chapter.
Section 607. Applicability.
If a contract is in effect on the effective date of this
section that conflicts with this chapter, the provision of this
chapter shall not apply until the date the contract is amended,
extended or renewed.
Section 6. The act is amended by adding a section to read:
Section 703.1. Transparency report required.
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(a) General rule.--Beginning July 1, 2026, and annually
thereafter, each licensed PBM shall submit a transparency report
containing data from the prior calendar year to the department.
The transparency report shall contain the following information:
(1) The aggregate amount of all rebates that the PBM
received from all pharmaceutical manufacturers for all health
benefit plan and health insurer clients and for each health
benefit plan or health insurer client.
(2) The aggregate administrative fees that the PBM
received from all manufacturers for all health benefit plan
and health insurer clients and for each health benefit plan
or health insurer client.
(3) The aggregate retained rebates that the PBM received
from all pharmaceutical manufacturers and did not pass
through to health benefit plan or health insurer clients.
(4) The highest, lowest and mean aggregate retained
rebate percentage for all health benefit plan or health
insurer clients and for each health benefit plan or health
insurer client.
(5) For a PBM that controls or is affiliated with a
pharmacy, a description of any differences between what the
PBM reimburses or charges affiliated and nonaffiliated
pharmacies.
(b) Publication.--Within 60 days of receipt, the department
shall publish the transparency report under this section on the
department's publicly accessible Internet website in a form that
does not disclose the identity of a specific health benefit plan
or health insurer, the prices charged for specific drugs or
classes of drugs or the amount of any rebates provided for
specific drugs or classes of drugs.
(c) Additional categories.--The department may, by
regulation, direct PBMs to include additional categories for
aggregated data from health benefit plan or health insurer
clients in the annual transparency report submitted under this
section.
Section 7. Section 901 of the act is amended to read:
Section 901. Scope of enforcement authority.
(a) Scope.--The department may investigate and enforce the
provisions of this act only insofar as the actions or inactions
being investigated relate to prescription drug coverage under a
health [insurance policy] benefit plan.
[(b) Remedy.--Actions or inactions within the scope of the
department's investigative and enforcement authority under
subsection (a) found to violate this act constitute "unfair
methods of competition" and "unfair or deceptive acts or
practices" within the meaning of section 5 of the act of July
22, 1974 (P.L.589, No.205), known as the Unfair Insurance
Practices Act. A proceeding under this section shall be
conducted in accordance with 2 Pa.C.S. Ch. 5 Subch. A (relating
to practice and procedure of Commonwealth agencies).]
(b.1) Examination and access to records.--
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(1) The department may order a PBM, a health insurer and
a PBM's or health insurer's affiliates to produce records,
books or other information as reasonably necessary to
ascertain compliance with this act.
(2) The department may examine or audit the books and
records of a PBM, a health insurer and a PBM's or health
insurer's affiliates to ascertain compliance with this act.
The examination shall be conducted in accordance with Article
IX of the act of May 17, 1921 (P.L.789, No.285), known as the
Insurance Department Act of 1921.
(c) Penalties.--Upon the determination, after notice and
hearing, that this act has been violated, the commissioner may
impose the following penalties:
(1) Suspension or revocation of the licensee's license,
authorization to operate or registration.
(2) Refusal to issue or renew a license, authorization
to operate or registration.
(3) A cease and desist order.
(4) Order reimbursement to an insured, pharmacy or
dispenser that has incurred a monetary loss as a result of a
violation of this act.
(5) For each violation of this act that a licensee knew
or reasonably should have known was a violation, a penalty of
not more than $100,000, not to exceed an aggregate penalty of
$1,000,000 in a single calendar year.
(6) For each violation of this act that a licensee did
not know nor reasonably should have known was a violation, a
penalty of not more than $50,000, not to exceed an aggregate
penalty of $500,000 in a single calendar year.
Section 8. The act is amended by adding sections to read:
Section 902. Regulations.
The department may promulgate regulations as necessary and
appropriate to carry out this chapter.
Section 903. Construction.
Nothing in this act shall be construed to apply to the
conduct of a PBM in connection with a contract with a self-
funded group health plan subject to 29 U.S.C. Ch. 18 (relating
to Employee Retirement Income Security Program).
Amend Bill, page 5, line 21, by striking out "5" and
inserting
9
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