Legislation Document

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE:

Section 1. Amend Chapter 33A, Title 18 of the Delaware Code by making deletions as shown by strike through and insertions as shown by underline as follows:

Subchapter II. Maximum Allowable Cost Pricing for Prescription Drugs and Reimbursement for and Provision of Pharmacy Goods or Services.

Section 2. Amend § 3323A, Title 18 of the Delaware Code by making deletions as shown by strike through and insertions as shown by underline as follows:

§ 3323A. Requirements for maximum allowable cost pricing [For application of this section, see 80 Del. Laws, c. 245, § 2] [Effective June 1, 2020].

(a) To place a drug on a maximum allowable cost list, a pharmacy benefits manager must ensure that the drug meets all of the following requirements:

(1) It is listed as “A” or “B” rated in the most recent version of the FDA’s United States Food and Drug Administration’s Approved Drug Products with Therapeutic Equivalence Evaluations, also known as the Orange Book, or has an “NR” or “NA” rating or a similar rating by a nationally recognized reference.

(2) It is generally available for purchase by pharmacies in this State from national or regional wholesalers.

(3) It is not obsolete, temporarily unavailable, or listed on a drug shortage list as in shortage.

(4) If it is manufactured by more than 1 manufacturer, the drug is available for purchase by a contracted pharmacy, including a contracted retail pharmacy, in this State from a wholesale distributor with a permit in this State. State, with whom the pharmacy has an existing relationship.

(5) If it is manufactured by only 1 manufacturer, the drug is generally available for purchase by a contracted pharmacy, including a contracted retail pharmacy, in this State from at least 2 wholesale distributors with a permit in this State.

Section 3. Amend § 3324A, Title 18 of the Delaware Code by making deletions as shown by strike through and insertions as shown by underline as follows:

§ 3324A. Appeals [For application of this section, see 80 Del. Laws, c. 245, § 2] [Effective June 1, 2020].

(a) A pharmacy benefits manager must establish a process by which a contracted pharmacy can appeal the provider’s reimbursement for a drug subject to maximum allowable cost pricing. A contracted pharmacy has 10 calendar days after the applicable fill date to appeal a maximum allowable cost if the reimbursement for the drug is less than the net amount that the network provider paid to the supplier of the drug. A pharmacy benefits manager must respond with notice that the challenge appeal has been denied or sustained granted within 10 calendar days of the contracted pharmacy making the claim for which an appeal has been submitted.

(b) At the beginning of the term of a network provider’s contract, and upon renewal, a pharmacy benefits manager must provide to network providers a telephone number or e-mail address at which a network provider can contact the pharmacy benefits manager to process an appeal under this section.

(c) If an appeal is denied, the pharmacy benefits manager must provide the reason for the denial and the name and the national drug code number from of the national or regional wholesalers operating in Delaware. this State that have the drug in stock at a price below the maximum allowable cost.

(d) If the appeal is sustained, granted the pharmacy benefits manager shall do the following:

(1) For an appealing pharmacy, do all of the following:

a. Adjust the maximum allowable cost for the drug as of the date of the original claim for payment.

b. Without requiring the appealing pharmacy to reverse and rebill the claims, provide reimbursement for the claim and any subsequent and similar claims under similarly applicable contracts with the pharmacy benefits manager as follows:

1. For the original claim, in the first remittance to the pharmacy after the date the appeal was determined. granted.

2. For subsequent and similar claims under similarly applicable contracts, in the second remittance to the pharmacy after the date the appeal was determined. granted.

(2) For a similarly situated contracted pharmacy in this State, do all of the following:

a. Adjust the maximum allowable cost for the drug as of the date the appeal was determined. granted.

b. Provide notice to the pharmacy or the pharmacy’s contracted agent of all of the following:

1. That an appeal was upheld. granted.

2. That without filing a separate appeal, the pharmacy or the pharmacy’s contracted agent may reverse and rebill a similar claim.

(e) A pharmacy benefits manager shall make available on its website information about the appeal process, including all of the following:

(1) A telephone number at which the contracted pharmacy may contact the department or office responsible for processing appeals for the pharmacy benefits manager to speak to an individual specifically or leave a message for an individual or office who is responsible for processing appeals.

(2) An email address of the department or office responsible for processing appeals to which an individual who responsible for processing appeals has access.

(f) A pharmacy benefits manager may not charge a contracted pharmacy a fee related to the re-adjudication of a claim resulting from a sustained granted appeal under subsection (d) of this section or the upholding of an appeal under subsection (h) of this section.

(g) A pharmacy benefits manager may not retaliate against a contracted pharmacy for exercising its right to appeal or filing a complaint with the Commissioner, as permitted under this section. to the pharmacy benefits manager under subsection (a) of this section or to the Commissioner under subsection (h) of this section.

(h) (1) If a pharmacy benefits manager denies an appeal and a contract pharmacy files a complaint an appeal with the Commissioner, the Commissioner shall do all of the following:

a. Review the pharmacy benefits manager’s compensation program to ensure that the reimbursement for pharmacy benefits management services paid to the pharmacist or a pharmacy complies with this subchapter and the terms of the contract.

b. Based on a determination made by the Commissioner under paragraph (h)(1)a. of this section, do 1 of the following:

1. Dismiss Deny the appeal.

2. Uphold Grant the appeal and order the pharmacy benefits manager to pay the claim in accordance with the Commissioner’s findings.

(2) All pricing information and data collected by the Commissioner during a review required by paragraph (h)(1) of this section is confidential and not subject to subpoena or the Freedom of Information Act, Chapter 100 of Title 29.

Section 4. Amend Subchapter II, Chapter 33A, Title 18 of the Delaware Code by making deletions as shown by strike through and insertions as shown by underline as follows:

§ 3325A. Reimbursement for and Provision of Pharmacy Goods or Services.

(a) As used in this section:

(1) “Affiliate” means a pharmacy or pharmacist that directly or indirectly, through 1 or more intermediaries, owns or controls, is owned or controlled by, or is under common ownership or control with a pharmacy benefits manager.

(2) “Insured” means an individual entitled to health care benefits for pharmacy goods or services under a health insurance policy or contract issued or delivered in this State by an insurer.

(3) “Pharmaceutical wholesaler” means a person that sells and distributes a pharmaceutical product and offers regular and private delivery to a pharmacy.

(4) “Pharmacy acquisition cost” means the amount that a pharmaceutical wholesaler charges for a pharmaceutical product as listed on the pharmacy's billing invoice.

(5) “Pharmacy goods or services” means 1 or more of the following provided by a pharmacist or pharmacy:

a. A single-sourced drug, multi-sourced drug, or compounded drug.

b. A medical product.

c. A medical device.

d. A service.

(b) A pharmacy benefits manager may not reimburse a pharmacist or pharmacy for pharmacy goods or services in an amount less than the amount the pharmacy benefits manager reimburses itself or an affiliate for the same pharmacy goods or services.

(c) If the amount reimbursed by a pharmacy benefits manager for pharmacy goods or services is less than the pharmacy acquisition cost for the same pharmacy goods or services, a pharmacist or pharmacy may decline to provide the pharmacy service to an insured.

(d) A pharmacist or pharmacy acting under subsection (c) of this section shall do all of the following:

(1) Inform the insured that the pharmacist or pharmacy has made the decision not to provide pharmacy goods or services to the insured under subsection (c) of this section because of the costs associated with providing the pharmacy goods or services.

(2) Provide the insured with a list of pharmacies in the area that may provide the pharmacy goods or services.

Section 5. Amend § 3351A, Title 18 of the Delaware Code by making deletions as shown by strike through and insertions as shown by underline as follows:

§ 3351A. Definitions [Effective June 1, 2020].

For purposes of this subchapter:

(1) “Claim” means as defined under § 3321A of this title.

(2) “Health insurance plan” means as “health insurance” is defined under § 903 of this title.

(3) “Insurer” means as defined under § 3321A of this title.

(4) “Pharmacist” means as defined under § 2502 of Title 24.

(5) “Pharmacy” means as defined under § 2502 of Title 24.

(1) (6) “Pharmacy benefits management services” means all of the following:

a. The procurement of prescription drugs at a negotiated rate for dispensation within this State to beneficiaries.

b. The administration or management of prescription drug coverage provided by a purchaser for beneficiaries.

c. Any of the following services provided with regard to the administration of prescription drug coverage:

1. Mail service pharmacy.

2. Claims processing, retail network management, and payment of claims to pharmacies for prescription drugs dispensed to beneficiaries.

3. Clinical formulary development and management services.

4. Rebate contracting and administration.

5. Patient compliance, therapeutic intervention, and generic substitution programs.

6. Disease management programs.

(2) (7) “Pharmacy benefits manager” means as defined under § 3302A of this title.

(8) “Pharmacy goods or services” means as defined under § 3325A of this title.

(3) (9) “Purchaser” means an insurance company, health service corporation, health maintenance organization, managed care organization, and any other entity that does all of the following:

a. Provides prescription drug coverage or benefits in this State.

b. Enters into agreement with a pharmacy benefits manager for the provision of pharmacy benefits management services.

Section 6. Amend Subchapter V, Chapter 33A, Title 18 of the Delaware Code by making deletions as shown by strike through and insertions as shown by underline as follows:

§ 3360A. Pharmacy benefits manager network; report.

(a) As used in this section:

(1) “Insured” means as defined in § 3325A of this title.

(2) “Pharmacy benefits manager network” means a network of pharmacists or pharmacies that are offered by an agreement or insurance contract to provide pharmacy goods or services for health insurance plans.

(3)a. “Rebate” means a discount or other price concession, or a payment that is both of the following:

1. Based on utilization of a prescription drug.

2. Paid by a manufacturer or third party, directly or indirectly, to a pharmacy benefits manager, pharmacy services administrative organization, or pharmacy after a claim has been processed and paid at a pharmacy.

b. “Rebate” includes incentives, disbursements, and reasonable estimates of a volume-based or category-based discounts.

(b) A pharmacy benefits manager shall provide a reasonably adequate and accessible pharmacy benefits manager network for the provision of prescription drugs for a health insurance plan, which provides for convenient insured access to pharmacies within a reasonable distance from an insured’s residence.

(1) A mail-order pharmacy may not be included in the calculations for determining pharmacy benefits manager network adequacy under this subsection.

(2) A pharmacy benefits manager shall provide a pharmacy benefits manager network adequacy report describing the pharmacy benefits manager network and the pharmacy benefits manager network’s accessibility in this State. The Commissioner shall adopt regulations setting the time and manner for providing the report.

(c)(1) A pharmacy benefits manager shall report to the Commissioner on a quarterly basis all of the following information for each insurer:

a. The itemized amount of pharmacy benefits manager revenue sources, including professional fees, administrative fees, processing fees, audits, direct and indirect renumeration fees, or any other fees.

b. The aggregate amount of rebates distributed to the appropriate insurer.

c. The aggregate amount of rebates passed on to insureds of each insurer at the point of sale that reduced the insureds’ applicable deductible, copayment, coinsurance, or other cost-sharing amount.

d. The individual and aggregate amount the insurer paid to the pharmacy benefits manager for pharmacy goods or services itemized by all of the following:

1. Pharmacy.

2. Product.

3. Goods and services.

e. The individual and aggregate amount a pharmacy benefits manager paid for pharmacy goods or services itemized by all of the following:

1. Pharmacy.

2. Product.

3. Goods and services.

(2) The report provided under paragraph (c)(1) of this section is confidential and not subject to subpoena or the Freedom of Information Act, Chapter 100 of Title 29.

Section 7. Amend Subchapter V, Chapter 33A, Title 18 of the Delaware Code by making deletions as shown by strike through and insertions as shown by underline as follows:

§ 3361A. Prohibited practices.

(a) As used in this section:

(1) “Board of Pharmacy” means as defined under § 2502 of Title 24.

(2) “Spread pricing” means the model of prescription drug pricing in which the pharmacy benefits manager charges a health benefit plan a contracted price for prescription drugs, and the contracted price for the prescription drugs differs from the amount the pharmacy benefits manager directly or indirectly pays the pharmacist or pharmacy for pharmacy goods or services.

(b) A pharmacy benefits manager or representative of a pharmacy benefits manager may not do any of the following:

(1) Conduct spread pricing.

(2) Cause or knowingly permit the use of any advertisement, promotion, solicitation, representation, proposal, or offer that is untrue, deceptive, or misleading.

(3) Unless reviewed and approved by the Commissioner, charge a pharmacist or pharmacy a fee related to the adjudication of a claim, including a fee for any of the following:

a. The receipt and processing of a pharmacy claim.

b. The development or management of claims processing services in a pharmacy benefits manager network.

c. Participation in a pharmacy benefits manager network.

(4) Unless reviewed and approved by the Commissioner in coordination with the Board of Pharmacy, require pharmacy accreditation standards or certification requirements inconsistent with, more stringent than, or in addition to requirements of the Board.

(5) Violate § 3325A(b) of this title.

(6) Pay or reimburse a pharmacy or pharmacist for the ingredient drug product component of pharmacist services less than the national average drug acquisition cost or, if the national average drug acquisition cost is unavailable, the wholesale acquisition cost.

(7) Make or permit any reduction of payment for pharmacy goods or services by a pharmacy benefits manager or an insurer directly or indirectly to a pharmacy under a reconciliation process to an effective rate of reimbursement, including generic effective rates, brand effective rates, direct and indirect remuneration fees, or any other reduction or aggregate reduction of payment.

(8) After adjudication of a claim for pharmacy goods or services, directly or indirectly retroactively deny or reduce the claim unless 1 of the following applies:

a. The original claim was submitted fraudulently.

b. The original claim payment was incorrect because the pharmacy or pharmacist had already been paid for the pharmacy goods or services.

c. The pharmacy goods or services were not properly rendered by the pharmacy or pharmacist.

Section 8. This Act applies to contracts between pharmacy benefit managers and pharmacies that are entered into, renewed, or extended on or after the effective date of this Act.