Bill Text: CA SB966 | 2023-2024 | Regular Session | Amended
Bill Title: Pharmacy benefits.
Spectrum: Moderate Partisan Bill (Democrat 7-2)
Status: (Enrolled) 2024-08-29 - Assembly amendments concurred in. (Ayes 37. Noes 1.) Ordered to engrossing and enrolling. [SB966 Detail]
Download: California-2023-SB966-Amended.html
Amended
IN
Assembly
July 03, 2024 |
Amended
IN
Assembly
June 18, 2024 |
Amended
IN
Senate
April 29, 2024 |
Amended
IN
Senate
April 18, 2024 |
Introduced by Senators Wiener and Wahab (Coauthors: Senators Min and Portantino) (Coauthors: Assembly Members |
January 24, 2024 |
LEGISLATIVE COUNSEL'S DIGEST
Digest Key
Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: YESBill Text
The people of the State of California do enact as follows:
SECTION 1.
Section 1367.2075 is added to the Health and Safety Code, immediately following Section 1367.207, to read:1367.2075.
(a) A health care service plan contract issued, amended, or renewed on or after January 1, 2025, that provides prescription drug coverage shall not calculate an enrollee’s cost sharing at an amount that exceeds the actual rate paid for the prescription drug.SEC. 2.
Section 1367.243 of the Health and Safety Code is amended to read:1367.243.
(a) (1) A health care service plan that reports rate information pursuant to Section 1385.03 or 1385.045 shall report the information described in paragraph (2) to the department no later than October 1 of each year, beginning October 1, 2018.SEC. 3.
Section 10123.2045 is added to the Insurance Code, immediately following Section 10123.204, to read:10123.2045.
(a) A health insurance policy issued, amended, or renewed on or after January 1, 2025, that provides prescription drug coverage shall not calculate an insured’s cost sharing at an amount that exceeds the actual rate paid for the prescription drug.SEC. 4.
Section 10123.205 of the Insurance Code is amended to read:10123.205.
(a) (1) A health insurer that reports rate information pursuant to Section 10181.3 or 10181.45 shall report the information described in paragraph (2) to the department no later than October 1 of each year, beginning October 1, 2018.SEC. 5.
Division 6 (commencing with Section 17000) is added to the Insurance Code, to read:DIVISION 6. Regulation of Pharmacy Benefit Managers
CHAPTER 1. General Provisions
17000.
For purposes of this division:17004.5.
Any activity conducted by a pharmacy benefit manager, as defined in this division, shall be construed as the business of insurance.17005.
The department shall adopt regulations necessary to implement this division.17006.
(a) The department shall establish procedures for receiving, investigating, tracking, and publicly reporting consumer complaints against pharmacy benefit managers.CHAPTER 2. Licensing
17010.
(a) The department shall license and regulate pharmacy benefit managers. The department shall have the authority to enforce this division and Chapter 9.5 (commencing with Section 4430) of Division 2 of the Business and Professions Code and Article 3 (commencing with Section 127470) of Chapter 2.5 of Part 2 of Division 107 of the Health and Safety Code.17015.
(a) A pharmacy benefit manager license applicant shall pay the initial application fee as determined by the department. A license shall be renewed every two years, beginning on the last calendar day of the month in which the initial license was issued. The license is nontransferable.17020.
Beginning no earlier than January 1, 2026, the fees for a pharmacy benefit manager initial license and renewal application shall be sufficient to fund the department’s duties in relation to responsibilities under this chapter, but in no case shall the fee exceed the reasonable regulatory cost to administer the act. Fees received under the act shall be deposited into the Pharmacy Benefit Manager Account, which is hereby created in the Insurance Fund, and shall be subject to an annual appropriation each fiscal year for the support of the Department of Insurance related to the licensing and regulation of pharmacy benefit managers.CHAPTER 3. Licensee Duties
17025.
(a) On or before July 1, 2028, and on or before each July 1 thereafter, a pharmacy benefit manager shall file with the department a report that contains all of the information required by subdivision (e) of Section 4441 of the Business and Professions Code from the preceding calendar year.(vii)
(viii)
17030.
(a) A pharmacy benefit manager shall not impose any requirements, conditions, or exclusions that discriminate against a nonaffiliated pharmacy in connection with dispensing drugs.17035.
A pharmacy benefit manager shall not do any of the following:17040.
(a) A contract issued, amended, or renewed on or after January 1, 2025, between a nonaffiliated retail pharmacy and a pharmacy benefit manager shall not prohibit the retail pharmacy from offering either of the following as an ancillary service of the retail pharmacy:17045.
A pharmacy benefit manager shall not require more than17050.
(a) A pharmacy benefit manager shall not derive income from pharmacy benefit management services provided to an insurer or health care service plan in this state except for income derived from a flat, defined, dollar-amount pharmacy benefit management fee for pharmacy benefit management services provided. The amount of any pharmacy benefit management fee shall be set forth in the agreement between the pharmacy benefit manager and the insurer or health care service plan. The pharmacy benefit manager shall disclose the amount and types of the pharmacy benefit management fees to the health insurer or health care service plan.17055.
(a) Except as permitted under existing law, a pharmacy benefit manager shall not unreasonably obstruct or interfere with a patient’s right to timely access a prescription drug or device that has been legally prescribed for that patient at a contract pharmacy of their choice.17060.
Commencing January 1, 2025, a pharmacy benefit manager shall not conduct spread pricing in this state. If a preexisting contract between a pharmacy benefit manager and a health care service plan or health insurer authorizes spread pricing, any subsequent amendment or renewal of that contract shall not contain that authorization. Any such spread pricing terms shall be void on and after January 1, 2028.17065.
(a) Notwithstanding any other law, a pharmacy benefit manager shall not enter into, amend, enforce, or renew a contract on or after January 1, 2025, with manufacturers who do business in California that expressly or implicitly restrict, or implements implicit or express exclusivity for, those manufacturers’ drugs, medical devices, or other products.CHAPTER 4. Enforcement
17070.
(a) In addition to any of the grounds to deny a license listed in Section 17010, the department may deny, suspend, or revoke the license of a pharmacy benefit manager if the department finds that any of the following are true:17075.
(a) The department may examine or audit any books and records of a pharmacy benefit manager pursuant to Article 4 (commencing with Section 729) of Chapter 1 of Part 2 of Division 1 to determine if the pharmacy benefit manager is in compliance with this division. A pharmacy benefit manager shall pay for reasonable expenses for any examinations or audits conducted pursuant to this section. Those payments shall be deposited into the Pharmacy Benefit Manager Account.17080.
(a) (1) Notwithstanding Section 4441 of the Business and Professions Code and Chapter 2.2 (commencing with Section 1385.001) of Division 2 of the Health and Safety Code, a pharmacy benefit manager shall have a duty and obligation to the health care service plan of the enrollee or subscriber covered by the health care service plan contract, or the insurer of the insured or policyholder of the policy of health insurance, and shall perform its services with care, skill, prudence, diligence, and professionalism, and for the best interests of the health care service plan or health insurer. When there is a conflict between the pharmacy benefit manager’s duty or obligation under this subdivision to the individual enrollee or insured and any other party, the duty or obligation to the individual enrollee or insured shall be primary.(c)Notwithstanding any other law, the Attorney General shall be entitled to specific performance, injunctive relief, and other equitable remedies a court deems appropriate for
enforcement of this chapter and shall be entitled to recover attorney’s fees and costs incurred in remedying each violation. This subdivision does not alter or abrogate the department’s authority to enforce this division.
17085.
(a) Any person that violates this division shall be subject to an injunction and liable for a civil penalty of not less than one thousand dollars ($1,000) or more than seven thousand five hundred dollars ($7,500) for each violation which shall be assessed and recovered in a civil action brought in the name of the people of the State of California by the Attorney General.(2)An action shall not be brought in the name of the people of the State of California that seeks relief under this section pursuant to the Unfair Competition Law (Chapter 5 (commencing with Section 17200) of Part 2 of Division 7 of the Business and Professions Code) without the written consent and permission of the Attorney General.
(3)
(c)