Illinois General Assembly - Full Text of HB3631
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Full Text of HB3631  103rd General Assembly




HB3631 EnrolledLRB103 30054 BMS 56477 b

1    AN ACT concerning regulation.
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4    Section 5. The Illinois Insurance Code is amended by
5changing Section 513b1 as follows:
6    (215 ILCS 5/513b1)
7    Sec. 513b1. Pharmacy benefit manager contracts.
8    (a) As used in this Section:
9    "340B drug discount program" means the program established
10under Section 340B of the federal Public Health Service Act,
1142 U.S.C. 256b.
12    "340B entity" means a covered entity as defined in 42
13U.S.C. 256b(a)(4) authorized to participate in the 340B drug
14discount program.
15    "340B pharmacy" means any pharmacy used to dispense 340B
16drugs for a covered entity, whether entity-owned or external.
17    "Biological product" has the meaning ascribed to that term
18in Section 19.5 of the Pharmacy Practice Act.
19    "Maximum allowable cost" means the maximum amount that a
20pharmacy benefit manager will reimburse a pharmacy for the
21cost of a drug.
22    "Maximum allowable cost list" means a list of drugs for
23which a maximum allowable cost has been established by a



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1pharmacy benefit manager.
2    "Pharmacy benefit manager" means a person, business, or
3entity, including a wholly or partially owned or controlled
4subsidiary of a pharmacy benefit manager, that provides claims
5processing services or other prescription drug or device
6services, or both, for health benefit plans.
7    "Retail price" means the price an individual without
8prescription drug coverage would pay at a retail pharmacy, not
9including a pharmacist dispensing fee.
10    "Third-party payer" means any entity that pays for
11prescription drugs on behalf of a patient other than a health
12care provider or sponsor of a plan subject to regulation under
13Medicare Part D, 42 U.S.C. 1395w-101, et seq.
14    (b) A contract between a health insurer and a pharmacy
15benefit manager must require that the pharmacy benefit
17        (1) Update maximum allowable cost pricing information
18    at least every 7 calendar days.
19        (2) Maintain a process that will, in a timely manner,
20    eliminate drugs from maximum allowable cost lists or
21    modify drug prices to remain consistent with changes in
22    pricing data used in formulating maximum allowable cost
23    prices and product availability.
24        (3) Provide access to its maximum allowable cost list
25    to each pharmacy or pharmacy services administrative
26    organization subject to the maximum allowable cost list.



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1    Access may include a real-time pharmacy website portal to
2    be able to view the maximum allowable cost list. As used in
3    this Section, "pharmacy services administrative
4    organization" means an entity operating within the State
5    that contracts with independent pharmacies to conduct
6    business on their behalf with third-party payers. A
7    pharmacy services administrative organization may provide
8    administrative services to pharmacies and negotiate and
9    enter into contracts with third-party payers or pharmacy
10    benefit managers on behalf of pharmacies.
11        (4) Provide a process by which a contracted pharmacy
12    can appeal the provider's reimbursement for a drug subject
13    to maximum allowable cost pricing. The appeals process
14    must, at a minimum, include the following:
15            (A) A requirement that a contracted pharmacy has
16        14 calendar days after the applicable fill date to
17        appeal a maximum allowable cost if the reimbursement
18        for the drug is less than the net amount that the
19        network provider paid to the supplier of the drug.
20            (B) A requirement that a pharmacy benefit manager
21        must respond to a challenge within 14 calendar days of
22        the contracted pharmacy making the claim for which the
23        appeal has been submitted.
24            (C) A telephone number and e-mail address or
25        website to network providers, at which the provider
26        can contact the pharmacy benefit manager to process



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1        and submit an appeal.
2            (D) A requirement that, if an appeal is denied,
3        the pharmacy benefit manager must provide the reason
4        for the denial and the name and the national drug code
5        number from national or regional wholesalers.
6            (E) A requirement that, if an appeal is sustained,
7        the pharmacy benefit manager must make an adjustment
8        in the drug price effective the date the challenge is
9        resolved and make the adjustment applicable to all
10        similarly situated network pharmacy providers, as
11        determined by the managed care organization or
12        pharmacy benefit manager.
13        (5) Allow a plan sponsor contracting with a pharmacy
14    benefit manager an annual right to audit compliance with
15    the terms of the contract by the pharmacy benefit manager,
16    including, but not limited to, full disclosure of any and
17    all rebate amounts secured, whether product specific or
18    generalized rebates, that were provided to the pharmacy
19    benefit manager by a pharmaceutical manufacturer.
20        (6) Allow a plan sponsor contracting with a pharmacy
21    benefit manager to request that the pharmacy benefit
22    manager disclose the actual amounts paid by the pharmacy
23    benefit manager to the pharmacy.
24        (7) Provide notice to the party contracting with the
25    pharmacy benefit manager of any consideration that the
26    pharmacy benefit manager receives from the manufacturer



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1    for dispense as written prescriptions once a generic or
2    biologically similar product becomes available.
3    (c) In order to place a particular prescription drug on a
4maximum allowable cost list, the pharmacy benefit manager
5must, at a minimum, ensure that:
6        (1) if the drug is a generically equivalent drug, it
7    is listed as therapeutically equivalent and
8    pharmaceutically equivalent "A" or "B" rated in the United
9    States Food and Drug Administration's most recent version
10    of the "Orange Book" or have an NR or NA rating by
11    Medi-Span, Gold Standard, or a similar rating by a
12    nationally recognized reference;
13        (2) the drug is available for purchase by each
14    pharmacy in the State from national or regional
15    wholesalers operating in Illinois; and
16        (3) the drug is not obsolete.
17    (d) A pharmacy benefit manager is prohibited from limiting
18a pharmacist's ability to disclose whether the cost-sharing
19obligation exceeds the retail price for a covered prescription
20drug, and the availability of a more affordable alternative
21drug, if one is available in accordance with Section 42 of the
22Pharmacy Practice Act.
23    (e) A health insurer or pharmacy benefit manager shall not
24require an insured to make a payment for a prescription drug at
25the point of sale in an amount that exceeds the lesser of:
26        (1) the applicable cost-sharing amount; or



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1        (2) the retail price of the drug in the absence of
2    prescription drug coverage.
3    (f) Unless required by law, a contract between a pharmacy
4benefit manager or third-party payer and a 340B entity or 340B
5pharmacy shall not contain any provision that:
6        (1) distinguishes between drugs purchased through the
7    340B drug discount program and other drugs when
8    determining reimbursement or reimbursement methodologies,
9    or contains otherwise less favorable payment terms or
10    reimbursement methodologies for 340B entities or 340B
11    pharmacies when compared to similarly situated non-340B
12    entities;
13        (2) imposes any fee, chargeback, or rate adjustment
14    that is not similarly imposed on similarly situated
15    pharmacies that are not 340B entities or 340B pharmacies;
16        (3) imposes any fee, chargeback, or rate adjustment
17    that exceeds the fee, chargeback, or rate adjustment that
18    is not similarly imposed on similarly situated pharmacies
19    that are not 340B entities or 340B pharmacies;
20        (4) prevents or interferes with an individual's choice
21    to receive a covered prescription drug from a 340B entity
22    or 340B pharmacy through any legally permissible means,
23    except that nothing in this paragraph shall prohibit the
24    establishment of differing copayments or other
25    cost-sharing amounts within the benefit plan for covered
26    persons who acquire covered prescription drugs from a



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1    nonpreferred or nonparticipating provider;
2        (5) excludes a 340B entity or 340B pharmacy from a
3    pharmacy network on any basis that includes consideration
4    of whether the 340B entity or 340B pharmacy participates
5    in the 340B drug discount program;
6        (6) prevents a 340B entity or 340B pharmacy from using
7    a drug purchased under the 340B drug discount program; or
8        (7) any other provision that discriminates against a
9    340B entity or 340B pharmacy by treating the 340B entity
10    or 340B pharmacy differently than non-340B entities or
11    non-340B pharmacies for any reason relating to the
12    entity's participation in the 340B drug discount program.
13    As used in this subsection, "pharmacy benefit manager" and
14"third-party payer" do not include pharmacy benefit managers
15and third-party payers acting on behalf of a Medicaid program.
16    (g) A violation of this Section by a pharmacy benefit
17manager constitutes an unfair or deceptive act or practice in
18the business of insurance under Section 424.
19    (h) A provision that violates subsection (f) in a contract
20between a pharmacy benefit manager or a third-party payer and
21a 340B entity that is entered into, amended, or renewed after
22July 1, 2022 shall be void and unenforceable.
23    (i)(1) A pharmacy benefit manager may not retaliate
24against a pharmacist or pharmacy for disclosing information in
25a court, in an administrative hearing, before a legislative
26commission or committee, or in any other proceeding, if the



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1pharmacist or pharmacy has reasonable cause to believe that
2the disclosed information is evidence of a violation of a
3State or federal law, rule, or regulation.
4    (2) A pharmacy benefit manager may not retaliate against a
5pharmacist or pharmacy for disclosing information to a
6government or law enforcement agency, if the pharmacist or
7pharmacy has reasonable cause to believe that the disclosed
8information is evidence of a violation of a State or federal
9law, rule, or regulation.
10    (3) A pharmacist or pharmacy shall make commercially
11reasonable efforts to limit the disclosure of confidential and
12proprietary information.
13    (4) Retaliatory actions against a pharmacy or pharmacist
14include cancellation of, restriction of, or refusal to renew
15or offer a contract to a pharmacy solely because the pharmacy
16or pharmacist has:
17        (A) made disclosures of information that the
18    pharmacist or pharmacy has reasonable cause to believe is
19    evidence of a violation of a State or federal law, rule, or
20    regulation;
21        (B) filed complaints with the plan or pharmacy benefit
22    manager; or
23        (C) filed complaints against the plan or pharmacy
24    benefit manager with the Department.
25    (j) (i) This Section applies to contracts entered into or
26renewed on or after July 1, 2022.



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1    (k) (j) This Section applies to any group or individual
2policy of accident and health insurance or managed care plan
3that provides coverage for prescription drugs and that is
4amended, delivered, issued, or renewed on or after July 1,
6(Source: P.A. 101-452, eff. 1-1-20; 102-778, eff. 7-1-22;
7revised 8-19-22.)
8    Section 99. Effective date. This Act takes effect July 1,