Official Summary Text
SB1672 - 572R - Senate Fact Sheet
Assigned to
HHS
& ATT������������������������������������������������������������������������������������������������� AS
PASSED BY COW
ARIZONA STATE SENATE
Fifty-Seventh
Legislature, Second Regular Session
AMENDED
FACT SHEET FOR
s.b. 1672
AHCCCS; antipsychotic drugs; authorization
Purpose
Effective January 1, 2027, prohibits
the Arizona Health Care Cost Containment System (AHCCCS) and its contractors
from requiring prior authorization for prescription antipsychotic drugs and
limits any step therapy protocols to no more than two distinct prescription
antipsychotic drugs.
Background
AHCCCS serves as Arizona's Medicaid agency, which offers Arizona
residents access to healthcare programs. AHCCCS contracts with health
professionals to provide medically necessary health and medical services to
eligible members. Additionally, AHCCCS must contract for a coordinated system
of behavioral health services for persons deemed seriously mentally ill,
including screening and intake, case management, treatment planning family
involvement and a continuum of care (A.R.S. ��
36-2901
and
36-3407
).
Seriously mentally ill
means persons who, as a result of a mental
disorder, exhibit emotional or behavioral functioning that is so impaired as to
interfere substantially with their capacity to remain in the community without
supportive treatment or services of a long-term or indefinite duration. In
these persons, mental disability is severe and persistent, resulting in a
long-term limitation of their functional capacities for primary activities of
daily living such as interpersonal relationships, homemaking, self-care,
employment and recreation (
A.R.S.
� 36-550
)
Step therapy protocol
is a protocol or program that establishes
the specific sequence in which prescription drugs that are for a specified
medical condition and that are medically necessary for a particular patient are
covered by a health care insurer under a health care plan (
A.R.S.
� 20-3651
).
The Joint Legislative Budget Committee (JLBC) estimates that S.B. 1672
would increase state General Fund costs by between $27,000,000 and $120,000,000
annually, due to the approval of prior authorization requests that would
previously have been denied and members switching from low-cost generic drugs
to high-cost brand name drugs (
JLBC
fiscal note
).
Provisions
1.
Specifies
that, before providing coverage of a prescription antipsychotic drug approved
by the U.S. Food and Drug Administration to a member who is at least 18 years
old with a serious mental illness, AHCCCS and its contractors:
a)
may not impose a prior authorization requirement or other process that
conditions, delays or denies the delivery of the drug to the member by applying
predetermined criteria by AHCCCS or its contractor for covered prescription
drugs, except as otherwise outlined; and
b)
may
impose a process, including a step therapy protocol, requiring the member to show
a failure to successfully respond to up to two distinct prescription
antipsychotic drugs.
2.
Requires AHCCCS and its contractors to allow a member, or the member's
health care provider, to bypass a step therapy protocol by submitting
documentation that the member failed to successfully respond to two distinct
prescription antipsychotic drugs on the member's current or previous health
benefit plan.
3.
Requires
any step therapy protocol or other process administered to:
a)
be adjudicated electronically and in real time; and
b)
consider
a member to have tried two prescription antipsychotic drugs if the member has
two paid claims for two distinct preferred antipsychotic drugs prescribed in a
nonemergency or outpatient setting within the previous five years.
4.
Specifies
that the antipsychotic drug coverage requirements:
a)
only apply to a prescription antipsychotic drug whose use is supported
by peer-reviewed, evidence-based literature;
b)
apply to prescription drug coverage that is paid either on a
fee-for-service basis or through a prepaid capitated health services contract
under AHCCCS;
c)
do not prohibit AHCCCS from contracting with a managed care organization
for pharmaceutical services offered under AHCCCS if the contract complies with
the outlined requirements;
d)
do not prohibit AHCCCS from prohibiting or discourage the use of a
generic drug;
e)
do not prevent AHCCCS from performing a drug utilization review that is
necessary for patient safety or to ensure that the prescribed use is for a
medically accepted indication;
f)
do not prohibit AHCCCS from collecting federal statutory rebates from
participating drug manufacturers as part of the Medicaid Drug Rebate Program;
and
g)
do
not prohibit AHCCCS from entering into a supplemental rebate contract agreement
with a drug manufacturer for preferred placement on the preferred drug list.
5.
Defines
failure to successfully respond
as a determination, based
on clinically appropriate guidelines, that a patient has failed on a
medication, including a lack of efficacy during a
six-week medication trial, an allergic reaction, intolerable side effects,
significant drug-to-drug interactions or a known interacting genetic
polymorphism that prevents safe preferred medication dosing as attested to by
the patient's health care provider.
6.
Defines terms.
7.
Becomes effective on January 1, 2027.
Amendments Adopted by the
Appropriations, Transportation & Technology Committee
�
Limits qualifying antipsychotic drug claims for step-therapy
purposes to those prescribed in a nonemergency or outpatient setting within the
previous five years.
Amendments Adopted by
Committee of the Whole
�
Specifies that the antipsychotic drug coverage requirements do
not prohibit AHCCCS from collecting federal statutory rebates or entering into
a supplemental rebate contact agreement with drug manufacturers for prescribed
purposes.
Senate Action
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Prepared by Senate Research
March 9, 2026
MM/SDR/hk
Current Bill Text
Read the full stored bill text
SB1672 - 572R - S Ver
Senate Engrossed
AHCCCS; antipsychotic
drugs; authorization
State of Arizona
Senate
Fifty-seventh Legislature
Second Regular Session
2026
SENATE BILL 1672
AN
ACT
Amending title 36, chapter 29, ARticle 1,
Arizona Revised Statutes, by adding section 36-2907.17; relating to the Arizona
health care cost containment system.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it
enacted by the Legislature of the State of Arizona:
Section 1. Title 36, chapter 29, article 1,
Arizona Revised Statutes, is amended by adding section 36-2907.17, to read:
START_STATUTE
36-2907.17.
Prescription antipsychotic drugs; coverage; definitions
A. Before providing coverage of a
prescription antipsychotic drug that is prescribed to a member who is at least
eighteen years of age and who has a serious mental illness determination for
which the prescription antipsychotic drug is approved by the United States food
and drug administration as described on the prescription antipsychotic drug's
approved labeling, the administration and its contractors:
1. Except for the process described
in paragraph 2 of this subsection, may not impose a prior authorization
requirement or other process that conditions, delays or denies the delivery of
the prescription antipsychotic drug to the member by applying predetermined
criteria by the administration or its contractor for covered prescription
drugs.
2. May impose a process, including a
step therapy protocol, requiring that the member show a failure to successfully
respond to not more than two distinct prescription antipsychotic drugs.
B. The administration and its
contractors shall grant a member or the member's health care provider the
ability to bypass a step therapy protocol by providing a history of the
member's failure to successfully respond to two distinct prescription
antipsychotic drugs on the member's current or previous health benefit plan.
C. Any step therapy protocol or other
process administered in accordance with subsection A, paragraph 2 of this
section must both:
1. Be adjudicated electronically and
in real time.
2. Consider a member to have tried
two prescription antipsychotic drugs if the member has two paid claims for two
distinct preferred antipsychotic drugs
that were
prescribed in a nonemergency or outpatient treatment within the previous five
years.
D. This section applies only to a
prescription antipsychotic drug whose use is supported by peer-reviewed,
evidence-based literature.
E. This section applies to
prescription drug coverage that is paid either on a fee-for-service
basis or through a prepaid capitated health services contract under the system.
F. This section does not:
1. Prohibit the administration from
contracting with a managed care organization for pharmaceutical services
offered under the system pursuant to section 36-2904 if the contract complies
with this section.
2. Prohibit or discourage the use of
a generic drug.
3. Prevent the administration from
performing a drug utilization review that is necessary for patient safety or to
ensure that the prescribed use is for a medically accepted indication, as
required by section 1927 of the social security act.
4. Prohibit the administration from
collecting federal statutory rebates from participating drug manufacturers as
part of the medicaid drug rebate program authorized by section 1927 of the
social security act.
5. Prohibit the administration from
entering into a supplemental rebate contract agreement with a drug manufacturer
for preferred placement on the preferred drug list.
G. For the purposes of this section:
1. "Failure to successfully
respond" means a determination, based on clinically appropriate
guidelines, that a patient has failed on a medication, including a lack of
efficacy during a six-week medication trial, an allergic reaction, intolerable
side effects, significant drug-to-drug interactions or a known
interacting genetic polymorphism that prevents safe preferred medication dosing
as attested to by the patient's health care provider.
2. "Health benefit plan"
means a policy, contract, certificate or agreement entered into, offered by or
issued by an insurer or by the administration to provide, deliver, arrange for,
pay for or reimburse any costs of health care services.
3. "Health care provider"
means a health care provider who is licensed pursuant to title 32 and who has
prescription AUTHORITY pursuant to title 32.
4. "Insurer" means any
person that is engaged in making any hospital, health or medical expense
insurance policy, hospital or medical service contract, employee welfare
benefit plan, contract or agreement with a health maintenance organization or a
preferred provider organization or health and accident insurance policy or any
other insurance contract of this type, including a group insurance plan.
5. "Prescription drug"
means any prescription medication as defined in section 32-1901.
END_STATUTE
Sec. 2.
Effective date
This act is effective from and after
December 31, 2026.