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


Rep. Hoan Huynh

Filed: 3/21/2023





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2    AMENDMENT NO. ______. Amend House Bill 3631 by replacing
3everything after the enacting clause with the following:
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.



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1    "Biological product" has the meaning ascribed to that term
2in Section 19.5 of the Pharmacy Practice Act.
3    "Maximum allowable cost" means the maximum amount that a
4pharmacy benefit manager will reimburse a pharmacy for the
5cost of a drug.
6    "Maximum allowable cost list" means a list of drugs for
7which a maximum allowable cost has been established by a
8pharmacy benefit manager.
9    "Pharmacy benefit manager" means a person, business, or
10entity, including a wholly or partially owned or controlled
11subsidiary of a pharmacy benefit manager, that provides claims
12processing services or other prescription drug or device
13services, or both, for health benefit plans.
14    "Retail price" means the price an individual without
15prescription drug coverage would pay at a retail pharmacy, not
16including a pharmacist dispensing fee.
17    "Third-party payer" means any entity that pays for
18prescription drugs on behalf of a patient other than a health
19care provider or sponsor of a plan subject to regulation under
20Medicare Part D, 42 U.S.C. 1395w-101, et seq.
21    (b) A contract between a health insurer and a pharmacy
22benefit manager must require that the pharmacy benefit
24        (1) Update maximum allowable cost pricing information
25    at least every 7 calendar days.
26        (2) Maintain a process that will, in a timely manner,



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1    eliminate drugs from maximum allowable cost lists or
2    modify drug prices to remain consistent with changes in
3    pricing data used in formulating maximum allowable cost
4    prices and product availability.
5        (3) Provide access to its maximum allowable cost list
6    to each pharmacy or pharmacy services administrative
7    organization subject to the maximum allowable cost list.
8    Access may include a real-time pharmacy website portal to
9    be able to view the maximum allowable cost list. As used in
10    this Section, "pharmacy services administrative
11    organization" means an entity operating within the State
12    that contracts with independent pharmacies to conduct
13    business on their behalf with third-party payers. A
14    pharmacy services administrative organization may provide
15    administrative services to pharmacies and negotiate and
16    enter into contracts with third-party payers or pharmacy
17    benefit managers on behalf of pharmacies.
18        (4) Provide a process by which a contracted pharmacy
19    can appeal the provider's reimbursement for a drug subject
20    to maximum allowable cost pricing. The appeals process
21    must, at a minimum, include the following:
22            (A) A requirement that a contracted pharmacy has
23        14 calendar days after the applicable fill date to
24        appeal a maximum allowable cost if the reimbursement
25        for the drug is less than the net amount that the
26        network provider paid to the supplier of the drug.



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1            (B) A requirement that a pharmacy benefit manager
2        must respond to a challenge within 14 calendar days of
3        the contracted pharmacy making the claim for which the
4        appeal has been submitted.
5            (C) A telephone number and e-mail address or
6        website to network providers, at which the provider
7        can contact the pharmacy benefit manager to process
8        and submit an appeal.
9            (D) A requirement that, if an appeal is denied,
10        the pharmacy benefit manager must provide the reason
11        for the denial and the name and the national drug code
12        number from national or regional wholesalers.
13            (E) A requirement that, if an appeal is sustained,
14        the pharmacy benefit manager must make an adjustment
15        in the drug price effective the date the challenge is
16        resolved and make the adjustment applicable to all
17        similarly situated network pharmacy providers, as
18        determined by the managed care organization or
19        pharmacy benefit manager.
20        (5) Allow a plan sponsor contracting with a pharmacy
21    benefit manager an annual right to audit compliance with
22    the terms of the contract by the pharmacy benefit manager,
23    including, but not limited to, full disclosure of any and
24    all rebate amounts secured, whether product specific or
25    generalized rebates, that were provided to the pharmacy
26    benefit manager by a pharmaceutical manufacturer.



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1        (6) Allow a plan sponsor contracting with a pharmacy
2    benefit manager to request that the pharmacy benefit
3    manager disclose the actual amounts paid by the pharmacy
4    benefit manager to the pharmacy.
5        (7) Provide notice to the party contracting with the
6    pharmacy benefit manager of any consideration that the
7    pharmacy benefit manager receives from the manufacturer
8    for dispense as written prescriptions once a generic or
9    biologically similar product becomes available.
10    (c) In order to place a particular prescription drug on a
11maximum allowable cost list, the pharmacy benefit manager
12must, at a minimum, ensure that:
13        (1) if the drug is a generically equivalent drug, it
14    is listed as therapeutically equivalent and
15    pharmaceutically equivalent "A" or "B" rated in the United
16    States Food and Drug Administration's most recent version
17    of the "Orange Book" or have an NR or NA rating by
18    Medi-Span, Gold Standard, or a similar rating by a
19    nationally recognized reference;
20        (2) the drug is available for purchase by each
21    pharmacy in the State from national or regional
22    wholesalers operating in Illinois; and
23        (3) the drug is not obsolete.
24    (d) A pharmacy benefit manager is prohibited from limiting
25a pharmacist's ability to disclose whether the cost-sharing
26obligation exceeds the retail price for a covered prescription



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1drug, and the availability of a more affordable alternative
2drug, if one is available in accordance with Section 42 of the
3Pharmacy Practice Act.
4    (e) A health insurer or pharmacy benefit manager shall not
5require an insured to make a payment for a prescription drug at
6the point of sale in an amount that exceeds the lesser of:
7        (1) the applicable cost-sharing amount; or
8        (2) the retail price of the drug in the absence of
9    prescription drug coverage.
10    (f) Unless required by law, a contract between a pharmacy
11benefit manager or third-party payer and a 340B entity or 340B
12pharmacy shall not contain any provision that:
13        (1) distinguishes between drugs purchased through the
14    340B drug discount program and other drugs when
15    determining reimbursement or reimbursement methodologies,
16    or contains otherwise less favorable payment terms or
17    reimbursement methodologies for 340B entities or 340B
18    pharmacies when compared to similarly situated non-340B
19    entities;
20        (2) imposes any fee, chargeback, or rate adjustment
21    that is not similarly imposed on similarly situated
22    pharmacies that are not 340B entities or 340B pharmacies;
23        (3) imposes any fee, chargeback, or rate adjustment
24    that exceeds the fee, chargeback, or rate adjustment that
25    is not similarly imposed on similarly situated pharmacies
26    that are not 340B entities or 340B pharmacies;



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1        (4) prevents or interferes with an individual's choice
2    to receive a covered prescription drug from a 340B entity
3    or 340B pharmacy through any legally permissible means,
4    except that nothing in this paragraph shall prohibit the
5    establishment of differing copayments or other
6    cost-sharing amounts within the benefit plan for covered
7    persons who acquire covered prescription drugs from a
8    nonpreferred or nonparticipating provider;
9        (5) excludes a 340B entity or 340B pharmacy from a
10    pharmacy network on any basis that includes consideration
11    of whether the 340B entity or 340B pharmacy participates
12    in the 340B drug discount program;
13        (6) prevents a 340B entity or 340B pharmacy from using
14    a drug purchased under the 340B drug discount program; or
15        (7) any other provision that discriminates against a
16    340B entity or 340B pharmacy by treating the 340B entity
17    or 340B pharmacy differently than non-340B entities or
18    non-340B pharmacies for any reason relating to the
19    entity's participation in the 340B drug discount program.
20    As used in this subsection, "pharmacy benefit manager" and
21"third-party payer" do not include pharmacy benefit managers
22and third-party payers acting on behalf of a Medicaid program.
23    (g) A violation of this Section by a pharmacy benefit
24manager constitutes an unfair or deceptive act or practice in
25the business of insurance under Section 424.
26    (h) A provision that violates subsection (f) in a contract



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1between a pharmacy benefit manager or a third-party payer and
2a 340B entity that is entered into, amended, or renewed after
3July 1, 2022 shall be void and unenforceable.
4    (i)(1) A pharmacy benefit manager may not retaliate
5against a pharmacist or pharmacy for disclosing information in
6a court, in an administrative hearing, before a legislative
7commission or committee, or in any other proceeding, if the
8pharmacist or pharmacy has reasonable cause to believe that
9the disclosed information is evidence of a violation of a
10State or federal law, rule, or regulation.
11    (2) A pharmacy benefit manager may not retaliate against a
12pharmacist or pharmacy for disclosing information to a
13government or law enforcement agency, if the pharmacist or
14pharmacy has reasonable cause to believe that the disclosed
15information is evidence of a violation of a State or federal
16law, rule, or regulation.
17    (3) A pharmacist or pharmacy shall make commercially
18reasonable efforts to limit the disclosure of confidential and
19proprietary information.
20    (4) Retaliatory actions against a pharmacy or pharmacist
21include cancellation of, restriction of, or refusal to renew
22or offer a contract to a pharmacy solely because the pharmacy
23or pharmacist has:
24        (A) made disclosures of information that the
25    pharmacist or pharmacy has reasonable cause to believe is
26    evidence of a violation of a State or federal law, rule, or



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1    regulation;
2        (B) filed complaints with the plan or pharmacy benefit
3    manager; or
4        (C) filed complaints against the plan or pharmacy
5    benefit manager with the Department.
6    (j) (i) This Section applies to contracts entered into or
7renewed on or after July 1, 2023 2022.
8    (k) (j) This Section applies to any group or individual
9policy of accident and health insurance or managed care plan
10that provides coverage for prescription drugs and that is
11amended, delivered, issued, or renewed on or after July 1,
13(Source: P.A. 101-452, eff. 1-1-20; 102-778, eff. 7-1-22;
14revised 8-19-22.)".