Prescription drugs: cost sharing: pharmacy benefit managers.

(1) Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the licensure and regulation of health care service plans by the Department of Managed Health Care under authority of the Director of the Department of Managed Health Care and makes a willful violation of the act a crime. Existing law provides for the regulation of health insurers by the Department of Insurance under the authority of the Insurance Commissioner. Existing law limits the maximum amount an enrollee or insured may be required to pay at the point of sale for a covered prescription drug to the lesser of the applicable cost-sharing amount or the retail price. This bill, commencing no later than January 1, 2024, would require an enrollee's or insured's defined cost sharing for each prescription drug to be calculated at the point of sale based on a price that is reduced by an amount equal to 90% of all rebates received, or to be received, in connection with the dispensing or administration of the drug. The bill would require a health care service plan or health insurer to, among other things, pass through to each enrollee or insured at the point of sale a good faith estimate of the enrollee's or insured's decrease in cost sharing. The bill would require a health care service plan or health insurer to calculate an enrollee's or insured's defined cost sharing and provide that information to the dispensing pharmacy, as specified. The bill would require the department and the commissioner to submit an annual report on the impact of these provisions to the appropriate policy committees of the Legislature, as specified. The bill would make these provisions inoperative on January 1, 2026. (2) Existing law requires a health care service plan or health insurer that files certain rate information to report to the appropriate department specified cost information regarding covered prescription drugs, including generic drugs, brand name drugs, and specialty drugs, dispensed as provided. This bill, until January 1, 2025, would require a health care service plan or health insurer to report additional information on the above-described point of sale provision. (3) Existing law defines a "pharmacy benefit manager" as a person, business, or other entity that, pursuant to a contract with a health care service plan, either directly or indirectly provides one or more pharmacy benefit management services on behalf of the health care service plan, as specified. Existing law requires a pharmacy benefit manager under contract with a health care service plan, among other things, to register with the Department of Managed Health Care, disclose specified uniform prescription drug information to contracting pharmacy providers, and exercise good faith and fair dealing in performing its contractual duties to the health care service plan. This bill would prohibit a pharmacy benefit manager from deriving income from pharmacy benefit management services provided to a health care service plan in this state except for income derived from pharmacy benefit management fees, and also would prohibit a pharmacy benefit management fee charged by, or paid, to a pharmacy benefit manager by a health care service plan from being directly or indirectly based or contingent upon certain criteria, including the wholesale acquisition cost or list price of a drug and denial of claims. (4) Because a willful violation of these provisions by a health care service plan would be a crime, the bill would impose a state-mandated local program. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason.