Protect Consumers from Unfair Practices Related to Pharmacy Benefits Management

Last updated: Jun 25, 2019

Details about this bill
Category: Pharmacy Related
Status: Passed
Sponsor: Senator Heather Sanborn, Senate 28 - Cumberland County
Session: 129
Bill #: LD 1504



UPDATE: This bill has been signed into law:

UPDATE: This bill has been passed and is awaiting action by Governor Mills.

UPDATE: The bill was amended and passed unanimously out of committee Ought to Pass as Amended.


This bill replaces the current registration requirement for pharmacy benefits managers doing business in this State with a licensing requirement beginning January 1, 2020. The bill imposes the following requirements on a carrier that provides prescription drug benefits.

1. It makes a carrier responsible for monitoring all activities carried out by the carrier, or all activities carried out on behalf of the carrier by a pharmacy benefits manager, related to a carrier's prescription drug benefits and for ensuring that all requirements of the law are met.

2. If a carrier contracts with a pharmacy benefits manager to perform any activities related to the carrier's prescription drug benefits, it makes the carrier responsible for ensuring that the pharmacy benefits manager acts as the carrier's agent and owes a fiduciary duty to the carrier.

3. It prohibits a carrier from entering into a contract or agreement or allowing a pharmacy benefits manager or any person acting on the carrier's behalf to enter into a contract or agreement that prohibits a pharmacy provider from providing a consumer with the option of paying the cash price for the purchase of a prescription drug and not filing a claim with the consumer's carrier if the cash price is less than the covered person's cost-sharing amount or providing information to a state or federal agency, law enforcement agency or the Superintendent of Insurance when such information is required by law.

4. It prohibits a carrier or pharmacy benefits manager from requiring a consumer to make an excessive payment at the point of sale for a covered prescription drug.

5. It requires a carrier to provide a reasonably adequate retail pharmacy network and specifies that a mail order pharmacy may not be included in determining the adequacy of a retail pharmacy network.

6. It replaces and updates current law related to the use of a maximum allowable cost list by a carrier or pharmacy benefits manager under contract with a carrier. It also clarifies how a carrier or pharmacy benefits manager may determine the average wholesale price of a brand-name drug or generic drug not included on the maximum allowable cost list.

7. It specifies how to calculate the amount paid by a carrier or a carrier's pharmacy benefits manager to a pharmacy provider under contract with the carrier or the carrier's pharmacy benefits manager for dispensing a prescription drug.

8. It requires that all compensation remitted by or on behalf of a pharmaceutical manufacturer, developer or labeler, directly or indirectly, to a carrier or to a pharmacy benefits manager related to its prescription drug benefits must be remitted to, and retained by, the carrier and used to lower the premium for covered persons. The bill requires a carrier to file annual reports beginning March 1, 2021 demonstrating how the carrier has complied with this requirement.

9. It requires a carrier to use a prescription drug formulary and specifies certain requirements for accessibility and disclosure of the formulary to covered persons. The bill also prohibits a carrier from allowing a person to be a member of its pharmacy and therapeutics committee if the member has a conflict of interest because of a relationship with, or compensation from, a pharmaceutical manufacturer, developer, labeler, wholesaler or distributor.

10. It requires a carrier to maintain certain records related to the administration and provision of prescription drug benefits under a health plan and authorizes the carrier to audit those activities. The bill also authorizes the superintendent to have access to records upon request.

11. If a carrier uses a pharmacy benefits manager to administer or manage prescription drug benefits provided for the benefit of covered persons, it provides that any pharmacy benefits manager compensation constitutes an administrative cost incurred by a carrier for purposes of calculating the anticipated loss ratio. "Pharmacy benefits manager compensation" is defined in the bill as the difference between the value of payments made by a carrier of a health plan to its pharmacy benefits manager and the value of payments made by the pharmacy benefits manager to dispensing pharmacists for the provision of prescription drugs or pharmacy services with regard to pharmacy benefits covered by the health plan.

12. It provides that the provisions in the bill take effect January 1, 2020.