AB 29: Pharmacy benefit managers.

Session Year: 2017-2018
House: Assembly

Version:

Existing law requires a pharmacy benefit manager that reimburses a contracting pharmacy for a drug on a maximum allowable cost basis to provide the contracting pharmacy with specified information regarding the data used to determine the maximum allowable cost of a drug.

This bill would require, except as provided, a pharmacy benefit manager to disclose certain information to a purchaser, including, among other things, the aggregate amount of rebates, retrospective utilization discounts, and other income that the pharmacy benefit manager would receive from a pharmaceutical manufacturer or labeler in connection with drug benefits related to the purchaser. The bill would excuse a pharmacy benefit manager from making these disclosures unless the purchaser agrees to keep any proprietary information disclosed to it pursuant to these provisions confidential, as specified.

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 and makes a willful violation of the act a crime.

This bill would require pharmacy benefit managers to be licensed by the department and would require a pharmacy benefit manager to report to the department, on a quarterly basis, regarding its compliance with the standards provided by the act. The bill would require the department to develop the application forms and standards for determining eligibility for a pharmacy benefit manager license and would require the department to set the licensing fee, as provided. The bill would also provide the department with the authority to enforce the provisions of the act and would make a willful violation of the bills provisions by a pharmacy benefit manager a crime. Because a willful violation of the bills provisions by a pharmacy benefit manager 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.

Discussed in Hearing