House Bill Summary

HCS/HB 1677 - This act enacts provisions relating to pharmacy benefits managers.

MISSOURI CONSOLIDATED HEALTH CARE PLAN PHARMACY BENEFITS MANAGER (Section 103.200)

Before March 1, 2024, and annually thereafter, the pharmacy benefits manager ("PBM") utilized by the Missouri Consolidated Health Care Plan ("the Plan") shall file a report with the Plan for the immediately preceding calendar year. The report shall include certain information regarding the Plan, including the aggregate dollar amount of rebates the PBM collected from pharmaceutical manufacturers, and the aggregate dollar amount of the rebates that were not passed on to the Plan. (Section 103.200.2). The Plan shall establish a form for the reporting, in consultation with its PBM, designed to minimize administrative burden and cost. (Section 103.200.3). Documents, materials, and other information submitted to the Plan under these provisions shall not be subject to disclosure under the Sunshine Law, except to the extent they are reported in the aggregate in the reports submitted to the General Assembly or Director of the Department of Commerce and Insurance under the act. The Plan shall not disclose any information under these provisions in a manner that would compromise the financial, competitive, or proprietary nature of the information, or allow a third party to identify rebate values for a particular outpatient prescription drug or class of outpatient prescription drugs. (Section 103.200.4). The Plan shall also annually report to the General Assembly the aggregate dollar amount of pharmaceutical rebates received for covered drugs utilized by enrollees during the calendar year. (Section 103.200.5(1)). The Plan shall annually produce and provide to the General Assembly and Director of the Department of Commerce and Insurance a report for the immediately preceding calendar year describing the rebate practices of the Plan and its pharmacy benefits manager, as specified in the act. (Section 103.200.5(2)). The Plan may impose a penalty of up to $7,500 on its PBM for each violation of these provisions. (Section 103.200.6).

These provisions are identical to provisions in SB 921 (2022), provisions in SB 971 (2020), provisions in HCS/HB 2412 (2020), provisions in the truly agreed to and finally passed SS/SCS/HCS/HB 1682 (2020), provisions in HB 1910 (2020), provisions in SB 413 (2019), and provisions in HB 1165 (2019).

FREEDOM OF CHOICE FOR PHARMACY SERVICES (Sections 338.015 and 338.375)

The act specifies that certain provisions of law pertaining to pharmacists and pharmacies shall not be construed to prohibit patients' ability to obtain prescription services from any licensed pharmacist "or pharmacy", and repeals language specifying that the provisions do not remove patients' ability to waive their freedom of choice under a contract with regard to payment or coverage of prescription expenses. (Section 338.015.1). Under the act, no PBM shall penalize or restrict a covered person from obtaining services from a contracted pharmacy, as such terms are defined by law. (Section 338.015.4).

The act also provides that nothing in the chapter governing pharmacists and pharmacies, and nothing in the chapter governing life, accident, and health insurance shall be construed to infringe on an individual's freedom to choose to obtain lawfully-prescribed drugs for home delivery. (Section 338.375).

TRICIA LEANN THARPE ACT (Section 338.061)

Under the act, the Board of Pharmacy shall recommend that all licensed pharmacists employed at a licensed retail pharmacy obtain two hours of continuing education in suicide awareness and prevention. Any such continuing education shall coint toward the continuing education hours required by the Board for the renewal of a pharmacist's license. The Board shall develop guidelines suitable for training materials used by accredited schools of pharmacy and other organizations and courses approved by the Accreditation Council for Pharmacy Education, except that schools of pharmacy may approve training materials used for training faculty and other employees.

These provisions are identical to provisions in CCS/HCS/SS/SB 690 (2022), HB 1644 (2022), HB 2316 (2022), provisions in HCS/HB 2136 (2022), and provisions in HCS/HB 2452 (2022), and similar to HB 1317 (2021).

PHARMACY BENEFITS MANAGERS (Section 376.387 and 376.388)

Additionally, the act modifies the applicable definition of "covered person" for purposes of certain statutes governing PBMs to mean an individual who "is entitled to health care services from a health carrier" (Section 376.387.1(1)), repeals a provision of law allowing PBMs to hold pharmacists or pharmacies responsible for fees related to charges for administering a health benefit plan (Section 376.387.4), and repeals a provision of law specifying that certain PBM regulations shall not apply with regard to Medicare Part D or other health plans regulated under federal law. (Former section 376.387.5). Pharmacy benefits managers shall notify contracted health carriers in writing of any conflict of interest, any commonality of ownership, or any other relationship between the PBM and any other health carrier with which the PBM contracts. (Section 376.387.5). The act provides standardized definitions for the terms "generic" and "rebate" applicable to PBMs and health carriers (Section 376.387.6-7), and specifies that PBMs shall owe a fiduciary duty to any entity with which it contracts. (Section 376.387.8).

The act repeals a portion of a definition to specify that certain provisions relating to the maximum allowable cost of a prescription drug are applicable to all pharmacies, rather than only to contracted pharmacies (Section 376.388.1(1)), and modifies the applicable definition of PBM to refer to any entity that administers or manages a pharmacy benefits plan or program, as defined in the act. (Section 376.388.1(5)). If the reimbursement for a drug to a contracted pharmacy is below the pharmacy's cost to purchase the drug, the PBM shall sustain an appeal and increase reimbursement for the pharmacy and other contracted pharmacies to cover the cost of purchasing the drug. (Section 376.388.5(2)). No PBM shall reimburse a pharmacist or pharmacy in the state an amount less than the amount that the PBM reimburses a PBM affiliate, as defined in the act, for providing the same pharmacist services. (Section 376.388.5(3)).

These provisions are similar to provisions in SB 921 (2022), provisions in SB 971 (2020), provisions in HCS/HB 2412 (2020), provisions in the truly agreed to and finally passed SS/SCS/HCS/HB 1682 (2020), provisions in HB 1910 (2020), provisions in SB 413 (2019), and provisions in HB 1165 (2019).

340B DRUG PRICING PROGRAM (Section 376.414)

No health carrier or PBM shall discriminate against a covered entity or a specified pharmacy, as such terms are defined in the act, by:

• Reimbursing a covered entity or specified pharmacy for a quantity of a 340B drug, as defined in the act, in an amount less than the carrier or PBM would pay to any other similarly situated pharmacy for such quantity of the drug on the basis that the entity or pharmacy is a covered entity or specified pharmacy, as defined in the act, or that the entity or pharmacy dispenses 340B drugs (Section 376.414.2(1));

• Imposing any terms or conditions on covered entities or specified pharmacies which differ from the terms or conditions applicable to other similarly situated pharmacies on the basis that the entity or pharmacy is a covered entity or specified pharmacy or dispenses 340B drugs, including but not limited to certain terms and conditions described in the act. (Section 376.414.2(2));

• Interfering with an individual's choice to receive a 340B drug from a covered entity or specified pharmacy. (Section 376.414.2(3)); or

• Refusing to contract with a covered entity or specified pharmacy for reasons other than those that apply equally to entities or pharmacies that are not covered entities or specified pharmacies, or on the basis that the entity or pharmacy is a covered entity or specified pharmacy, or on the basis that the entity or pharmacy is described as a covered entity under provisions of federal law. (Section 376.414.2(4)).

The Director of the Department of Commerce and Insurance shall impose a civil penalty on any PBM violating certain provisions of the act, not to exceed $5,000 per violation per day. (Section 376.414.3).

These provisions are similar to provisions in SB 921 (2022), provisions in SB 1129 (2022), provisions in HB 2305 (2022), provisions in SB 971 (2020), provisions in HCS/HB 2412 (2020), provisions in the truly agreed to and finally passed SS/SCS/HCS/HB 1682 (2020), provisions in HB 1910 (2020), provisions in SB 413 (2019), and provisions in HB 1165 (2019).

PRESCRIPTION INSULIN DRUGS (Sections 376.687 and 376.689)

Under this act, insurers providing coverage for prescription insulin drugs, as defined in the act, shall limit the amount an insured is required to pay for a 30-day supply of the drugs at an amount not to exceed $100, adjusted annually for inflation. These provisions apply to "any group or individual policy of accident and health insurance amended, delivered, issued, or renewed on or after August 28, 2022.

Lastly, the act requires the Department of Commerce and Insurance, in conjunction with the Department of Health and Senior Services and the Department of Social Services, to make available to the public a report detailing each department's findings regarding insulin pricing practices and variables, policy recommendations to control overpricing of prescription insulin drugs, and any other information the Department of Commerce and Insurance finds necessary.

These provisions are similar to HB 2313 (2022) and HB 2159 (2022).

ERIC VANDER WEERD