Full Text of SB1971 100th General Assembly
SB1971 100TH GENERAL ASSEMBLY |
| | 100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018 SB1971 Introduced 2/10/2017, by Sen. Omar Aquino SYNOPSIS AS INTRODUCED: |
| 215 ILCS 5/512-11 new | | 815 ILCS 510/2 | from Ch. 121 1/2, par. 312 |
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Amends the Illinois Insurance Code. Provides regulation for the creation of a list of drugs used to set the maximum allowable cost on which reimbursement to a pharmacy or pharmacist may be based. Provides that before a pharmacy benefits manager places or continues a particular drug on a maximum allowable cost list, the drug shall meet specified requirements. Provides for the duties of a pharmacy benefits manager in his or her use of a maximum allowable cost list. Provides for a reasonable administrative appeal procedure to allow pharmacies to challenge maximum allowable costs and reimbursements made under a maximum allowable cost for a specific drug. Provides that a pharmacy benefits manager shall not reimburse a pharmacy or pharmacist in this State in an amount less than the amount that the pharmacy benefits manager reimburses a pharmacy benefits manager affiliate for providing the same pharmacist services. Provides that a pharmacy or pharmacist may decline to provide pharmacist services to a patient or pharmacy benefits manager if, as a result of a maximum allowable cost list, a pharmacy or pharmacist is to be paid less than the pharmacy acquisition cost of the pharmacy providing pharmacist services. Provides that a violation of the provisions concerning maximum allowable cost lists and pharmacy benefits managers is a deceptive trade practice. Amends the Uniform Deceptive Trade Practices Act to make a conforming change. Defines terms.
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| | | FISCAL NOTE ACT MAY APPLY | |
| | A BILL FOR |
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| 1 | | AN ACT concerning regulation.
| 2 | | Be it enacted by the People of the State of Illinois,
| 3 | | represented in the General Assembly:
| 4 | | Section 5. The Illinois Insurance Code is amended by adding | 5 | | Section 512-11 as follows: | 6 | | (215 ILCS 5/512-11 new) | 7 | | Sec. 512-11. Maximum allowable cost list; pharmacy | 8 | | benefits manager. | 9 | | (a) As used in this Section: | 10 | | "Maximum allowable cost list" means a listing of drugs | 11 | | used by a pharmacy benefits manager setting the maximum | 12 | | allowable cost on which reimbursement to a pharmacy or | 13 | | pharmacist may be based. | 14 | | "Pharmaceutical wholesaler" means a person or entity | 15 | | that sells and distributes prescription pharmaceutical | 16 | | products, including, but not limited to, a full line of | 17 | | brand-name, generic, and over-the-counter pharmaceuticals, | 18 | | and that offers regular and private delivery to a pharmacy. | 19 | | "Pharmacy acquisition cost" means the amount that a | 20 | | pharmaceutical wholesaler charges for a pharmaceutical | 21 | | product as listed on the pharmacy's billing invoice. | 22 | | "Pharmacy benefits manager" means an entity that | 23 | | administers or manages a pharmacy benefits plan or program. |
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| 1 | | "Pharmacy benefits manager affiliate" means a pharmacy | 2 | | or pharmacist that directly or indirectly, through one or | 3 | | more intermediaries, owns or controls, is owned or | 4 | | controlled by, or is under common ownership or control with | 5 | | a pharmacy benefits manager. | 6 | | "Pharmacy benefits plan or program" means a plan or | 7 | | program that pays for, reimburses, covers the cost of, or | 8 | | otherwise provides for pharmacist services to individuals | 9 | | who reside in or are employed in this State. | 10 | | (b) Before a pharmacy benefits manager places or continues | 11 | | a particular drug on a maximum allowable cost list, the drug: | 12 | | (1) shall be listed as therapeutically equivalent and | 13 | | pharmaceutically equivalent "A" or "B" rated in the United | 14 | | States Food and Drug Administration's most recent version | 15 | | of the "Orange Book" or "Green Book" or has an NR or NA | 16 | | rating by Medi-Span, Gold Standard, or a similar rating by | 17 | | a nationally recognized reference; | 18 | | (2) shall be available for purchase by each pharmacy in | 19 | | the State from national or regional wholesalers operating | 20 | | in Illinois; and | 21 | | (3) shall not be obsolete. | 22 | | (c) A pharmacy benefits manager shall: | 23 | | (1) provide access to its maximum allowable cost list | 24 | | to each pharmacy subject to the maximum allowable cost | 25 | | list; | 26 | | (2) update its maximum allowable cost list on a timely |
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| 1 | | basis, but in no event longer than 7 calendar days from an | 2 | | increase of 10% or more in the pharmacy acquisition cost or | 3 | | from 60% or more of the pharmaceutical wholesalers doing | 4 | | business in the State, or a change in the methodology on | 5 | | which the maximum allowable cost list is based or in the | 6 | | value of a variable involved in the methodology; | 7 | | (3) provide a process for each pharmacy subject to the | 8 | | maximum allowable cost list to receive prompt notification | 9 | | of an update to the maximum allowable cost list; and | 10 | | (4) provide a reasonable administrative appeal | 11 | | procedure to allow pharmacies to challenge maximum | 12 | | allowable costs and reimbursements made under a maximum | 13 | | allowable cost for a specific drug or drugs as: (A) not | 14 | | meeting the requirements of this Section or (B) being below | 15 | | the pharmacy acquisition cost. The reasonable | 16 | | administrative appeal procedure shall include: (i) a | 17 | | dedicated telephone number and email address or website for | 18 | | the purpose of submitting administrative appeals; (ii) the | 19 | | ability to submit an administrative appeal directly to the | 20 | | pharmacy benefits manager regarding the pharmacy benefits | 21 | | plan or program or through a pharmacy service | 22 | | administrative organization; and (iii) no less than 7 | 23 | | business days to file an administrative appeal. | 24 | | (d) The pharmacy benefits manager shall respond to the | 25 | | challenge under paragraph (4) of subsection (c) within 7 | 26 | | business days after receipt of the challenge. If a challenge is |
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| 1 | | under paragraph (4) of subsection (c), the pharmacy benefits | 2 | | manager shall within 7 business days after receipt of the | 3 | | challenge either: | 4 | | (1) if the appeal is upheld: | 5 | | (A) make the change in the maximum allowable cost; | 6 | | (B) permit the challenging pharmacy or pharmacist | 7 | | to reverse and rebill the claim in question; | 8 | | (C) provide the National Drug Code number that the | 9 | | increase or change is based on to the pharmacy or | 10 | | pharmacist; and | 11 | | (D) make the change under subparagraph (A) of this | 12 | | paragraph (1) effective for each similarly situated | 13 | | pharmacy as defined by the payor subject to the maximum | 14 | | allowable cost list; | 15 | | (2) if the appeal is denied, provide the challenging | 16 | | pharmacy or pharmacist the National Drug Code number and | 17 | | the name of the national or regional pharmaceutical | 18 | | wholesalers operating in Illinois that have the drug | 19 | | currently in stock at a price below the maximum allowable | 20 | | cost list; or | 21 | | (3) if the National Drug Code number provided by the | 22 | | pharmacy benefits manager is not available below the | 23 | | pharmacy acquisition cost from the pharmaceutical | 24 | | wholesaler from whom the pharmacy or pharmacist purchases | 25 | | the majority of prescription drugs for resale, then the | 26 | | pharmacy benefits manager shall adjust the maximum |
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| 1 | | allowable cost list above the challenging pharmacy's | 2 | | pharmacy acquisition cost and permit the pharmacy to | 3 | | reverse and rebill each claim affected by the inability to | 4 | | procure the drug at a cost that is equal to or less than | 5 | | the previously challenged maximum allowable cost. | 6 | | (e) A pharmacy benefits manager shall not reimburse a | 7 | | pharmacy or pharmacist in this State in an amount less than the | 8 | | amount that the pharmacy benefits manager reimburses a pharmacy | 9 | | benefits manager affiliate for providing the same pharmacist | 10 | | services. The amount shall be calculated on a per unit basis | 11 | | based on the same generic product identifier or generic code | 12 | | number. | 13 | | (f) A pharmacy or pharmacist may decline to provide | 14 | | pharmacist services to a patient or pharmacy benefits manager | 15 | | if, as a result of a maximum allowable cost list, a pharmacy or | 16 | | pharmacist is to be paid less than the pharmacy acquisition | 17 | | cost of the pharmacy providing pharmacist services. | 18 | | (g) A violation of this Section is a deceptive trade | 19 | | practice under Section 2 of the Uniform Deceptive Trade | 20 | | Practices Act. | 21 | | Section 10. The Uniform Deceptive Trade Practices Act is | 22 | | amended by changing Section 2 as follows:
| 23 | | (815 ILCS 510/2) (from Ch. 121 1/2, par. 312)
| 24 | | Sec. 2. Deceptive trade practices.
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| 1 | | (a) A person engages in a deceptive trade practice when, in | 2 | | the course
of his or her business, vocation, or occupation, the | 3 | | person:
| 4 | | (1) passes off goods or services as those of another;
| 5 | | (2) causes likelihood of confusion or of | 6 | | misunderstanding as to the
source, sponsorship, approval, | 7 | | or certification of goods or services;
| 8 | | (3) causes likelihood of confusion or of | 9 | | misunderstanding as to
affiliation, connection, or | 10 | | association with or certification by another;
| 11 | | (4) uses deceptive representations or designations of | 12 | | geographic origin
in connection with goods or services;
| 13 | | (5) represents that goods or services have | 14 | | sponsorship, approval,
characteristics, ingredients, uses, | 15 | | benefits, or quantities that they do
not have or that a | 16 | | person has a sponsorship, approval, status, affiliation,
| 17 | | or connection that he or she does not have;
| 18 | | (6) represents that goods are original or new if they | 19 | | are deteriorated,
altered, reconditioned, reclaimed, used, | 20 | | or secondhand;
| 21 | | (7) represents that goods or services are of a | 22 | | particular standard,
quality, or grade or that goods are a | 23 | | particular style or model, if they
are of another;
| 24 | | (8) disparages the goods, services, or business of | 25 | | another by false
or misleading representation of fact;
| 26 | | (9) advertises goods or services with intent not to |
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| 1 | | sell them as
advertised;
| 2 | | (10) advertises goods or services with intent not to | 3 | | supply reasonably
expectable public demand, unless the | 4 | | advertisement discloses a limitation
of quantity;
| 5 | | (11) makes false or misleading statements of fact | 6 | | concerning
the reasons for, existence of, or amounts of | 7 | | price reductions;
| 8 | | (12) engages in any other conduct which similarly | 9 | | creates a likelihood
of confusion or misunderstanding ; or .
| 10 | | (13) engages in conduct as a pharmacy benefits manager | 11 | | that is in violation of Section 512-11 of the Illinois | 12 | | Insurance Code. | 13 | | (b) In order to prevail in an action under this Act, a | 14 | | plaintiff
need not prove competition between the parties or | 15 | | actual confusion or
misunderstanding.
| 16 | | (c) This Section does not affect unfair trade practices | 17 | | otherwise
actionable at common law or under other statutes of | 18 | | this State.
| 19 | | (Source: P.A. 92-16, eff. 6-28-01)
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