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LEGISLATURE
OF
THE
STATE
OF
IDAHO
Sixty-eighth
Legislature
Second
Regular
Session
-
2026
IN
THE
SENATE
SENATE
BILL
NO.
1367
BY
STATE
AFFAIRS
COMMITTEE
AN
ACT
1
RELATING
TO
PHARMACY
BENEFIT
MANAGERS;
AMENDING
CHAPTER
3,
TITLE
41,
IDAHO
2
CODE,
BY
THE
ADDITION
OF
A
NEW
SECTION
41
-
349A,
IDAHO
CODE,
TO
ESTABLISH
3
PROVISIONS
REGARDING
DISPENSING
FEES;
AMENDING
SECTION
41
-
349,
IDAHO
4
CODE,
TO
DEFINE
TERMS,
TO
REVISE
PROVISIONS
REGARDING
DISPENSING
FEES,
5
AND
TO
ESTABLISH
PROVISIONS
REGARDING
DUTIES
AND
RESTRICTIONS
PERTAIN
-
6
ING
TO
PHARMACY
BENEFIT
MANAGERS
AND
THIRD
-
PARTY
PAYERS;
AND
DECLARING
7
AN
EMERGENCY.
8
Be
It
Enacted
by
the
Legislature
of
the
State
of
Idaho:
9
SECTION
1.
That
Chapter
3,
Title
41,
Idaho
Code,
be,
and
the
same
is
10
hereby
amended
by
the
addition
thereto
of
a
NEW
SECTION
,
to
be
known
and
des
-
1
1
ignated
as
Section
41
-
349A,
Idaho
Code,
and
to
read
as
follows:
12
41
-
349A.
DISPENSING
FEES.
(1)
A
plan
sponsor,
pharmacy
benefit
man
-
13
ager
(PBM),
or
third
-
party
payer
shall
ensure
that
reimbursement
to
indepen
-
14
dent
pharmacies
for
each
drug
dispensed
is
an
amount
that
is
not
less
than
the
15
sum
of
the
national
average
drug
acquisition
cost
(NADAC)
as
provided
for
in
16
subsection
(2)
of
this
section
and
the
professional
dispensing
fee
as
pro
-
17
vided
for
in
subsection
(3)
of
the
section.
18
(2)
The
NADAC
shall
be
the
published
price
in
effect
for
the
day
that
a
19
drug
claim
is
billed
by
a
pharmacy.
However,
if
a
particular
drug
does
not
20
have
a
published
NADAC,
the
reimbursement
to
an
independent
pharmacy
shall
21
be:
22
(a)
For
generic
drugs,
one
hundred
percent
(100%)
of
published
whole
-
23
sale
acquisition
costs;
and
24
(b)
For
brand
name
drugs,
one
hundred
percent
(100%)
of
wholesale
ac
-
25
quisition
costs.
26
(3)
The
minimum
professional
dispensing
fee
for
independent
pharmacies
27
shall
be
twelve
dollars
and
thirty
-
five
cents
($12.35),
subject
to
an
an
-
28
nual
increase
as
provided
for
in
this
subsection.
On
January
1
of
each
year,
29
every
plan
sponsor,
PBM,
and
third
-
party
payer
shall
increase
the
amount
of
30
the
minimum
professional
dispensing
fee
for
independent
pharmacies
to
ad
-
31
just
for
inflation.
Inflation
shall
be
measured
by
the
annual
percentage
in
-
32
crease,
if
any,
in
the
consumer
price
index
for
all
urban
consumers
(CPI
-
U)
33
as
published
by
the
United
States
department
of
labor,
bureau
of
labor
sta
-
34
tistics,
for
all
items.
35
(4)
The
Idaho
department
of
insurance
shall
issue
a
letter
and
guidance
36
to
every
plan
sponsor,
PBM,
and
third
-
party
payer
registered
with
the
state
37
of
Idaho
no
later
than
thirty
(30)
days
after
the
effective
date
of
this
sec
-
38
tion.
All
reimbursement
rates
shall
be
in
full
force
and
effect
as
of
that
39
date,
and
plan
sponsors,
PBMs,
and
third
-
party
payers
shall
issue
additional
40
payments
as
needed
to
independent
pharmacies
to
cover
any
deficiencies
in
41
payment
made
after
the
effective
date
of
this
section.
42
2
(5)
The
Idaho
department
of
insurance
shall
issue
a
letter
and
guidance
1
to
every
plan
sponsor,
PBM,
and
third
-
party
payer
registered
with
the
state
2
of
Idaho
no
later
than
January
15
of
each
year.
Such
letter
shall
include
the
3
updated
dispensing
fee
that
will
become
effective
on
March
1
of
the
same
cal
-
4
endar
year.
5
(6)
Annually,
on
March
1,
plan
sponsors,
PBMs,
and
third
-
party
payers
6
shall
begin
paying
the
updated
dispensing
fee
as
provided
for
in
subsection
7
(5)
of
this
section.
8
(7)
In
the
event
that
an
issuance
date
provided
for
pursuant
to
this
9
section
falls
on
a
weekend
or
a
national
holiday,
the
next
business
day
shall
10
become
the
required
date
of
issuance.
1
1
SECTION
2.
That
Section
41
-
349,
Idaho
Code,
be,
and
the
same
is
hereby
12
amended
to
read
as
follows:
13
41
-
349.
PHARMACY
BENEFIT
MANAGERS.
(1)
As
used
in
this
section:
14
(a)
"Brand
name
or
generic
effective
rate"
means
the
contractual
rate
15
set
forth
by
a
pharmacy
benefit
manager
for
the
reimbursement
of
covered
16
brand
name
or
generic
drugs,
calculated
using
the
total
payments
in
the
17
aggregate,
by
drug
type,
during
the
performance
period.
The
effective
18
rates
are
typically
calculated
as
a
discount
from
industry
benchmarks,
19
such
as
average
wholesale
price
or
wholesale
acquisition
cost.
20
(b)
"Dispensing
fee"
means
a
fee
intended
to
cover
reasonable
costs
as
-
21
sociated
with
providing
a
drug
to
a
covered
person.
This
cost
includes
22
but
is
not
limited
to
the
pharmacist's
services
and
the
overhead
asso
-
23
ciated
with
maintaining
the
facility
and
equipment
necessary
to
operate
24
the
pharmacy.
The
dispensing
fee
shall
be
set
pursuant
to
the
provi
-
25
sions
of
section
41
-
349A,
Idaho
Code.
26
(c)
"Effective
rate
guarantee"
means
the
minimum
ingredient
cost
reim
-
27
bursement
a
pharmacy
benefit
manager
guarantees
it
will
pay
for
pharma
-
28
cist
services
during
the
applicable
measurement
period.
29
(d)
"Independent
pharmacy"
means
any
pharmacy
not
owned
or
affiliated
30
with
a
pharmacy
benefit
manager.
31
(d)
(e)
"Maximum
allowable
cost"
means
the
maximum
amount
that
a
phar
-
32
macy
benefit
manager
will
reimburse
a
pharmacy
for
the
cost
of
a
generic
33
drug.
34
(e)
(f)
"Maximum
allowable
cost
appeal
pricing
adjustment"
means
a
ret
-
35
rospective
positive
payment
adjustment
made
to
a
pharmacy
by
the
phar
-
36
macy
benefits
plan
or
program
or
by
the
pharmacy
benefit
manager
pur
-
37
suant
to
an
approved
maximum
allowable
cost
appeal
request
submitted
by
38
the
same
pharmacy
to
dispute
the
amount
reimbursed
for
a
drug
based
on
39
the
pharmacy
benefit
manager's
listed
maximum
allowable
cost
price.
40
(g)
"National
average
drug
acquisition
cost"
or
"NADAC"
means
a
medic
-
41
aid
benchmark
that
represents
the
average
retail
price
pharmacies
pay
42
to
acquire
prescription
and
over
-
the
-
counter
drugs.
43
(f)
(h)
"Participation
contract"
means
any
agreement
between
a
phar
-
44
macy
benefit
manager
and
pharmacy
for
the
provision
and
reimbursement
45
of
pharmacist
services
and
any
exhibits,
attachments,
amendments,
or
46
addendums
to
such
agreement.
47
(g)
(i)
"Pass
-
through
pricing
model"
means
a
payment
model
used
by
a
48
pharmacy
benefit
manager
in
which
the
payments
made
by
the
pharmacy
ben
-
49
3
efits
plan
or
program
to
the
pharmacy
benefit
manager
for
the
covered
1
outpatient
drugs
are:
2
(i)
Equivalent
to
the
payments
the
pharmacy
benefit
manager
makes
3
to
a
dispensing
pharmacy
or
provider
for
such
drugs,
including
any
4
contracted
professional
dispensing
fee
between
the
pharmacy
ben
-
5
efit
manager
and
its
network
of
pharmacies.
Such
dispensing
fee
6
would
be
paid
if
the
pharmacy
benefits
plan
or
program
was
making
7
the
payments
directly;
and
8
(ii)
Passed
through
in
their
entirety
by
the
pharmacy
benefits
9
plan
or
program
or
by
the
pharmacy
benefit
manager
to
the
pharmacy
10
or
provider
that
dispenses
the
drugs,
and
the
payments
are
made
in
1
1
a
manner
that
is
not
offset
by
any
reconciliation.
12
(h)
(j)
"Pharmacy
benefit
manager"
means
a
person
or
entity
doing
busi
-
13
ness
in
this
state
that
contracts
with
pharmacies
on
behalf
of
an
in
-
14
surer,
third
-
party
administrator,
or
managed
care
organization
to
ad
-
15
minister
prescription
drug
benefits
to
residents
of
this
state.
16
(i)
(k)
"Spread
pricing"
means
the
practice
in
which
a
pharmacy
benefit
17
manager
charges
a
pharmacy
benefits
plan
or
program
a
different
amount
18
for
pharmacist
services
than
the
amount
the
pharmacy
benefit
manager
19
reimburses
a
pharmacy
for
such
pharmacist
services.
20
(j)
(l)
"Usual
and
customary
price"
means
the
amount
charged
to
cash
21
customers
for
a
pharmacist
service
exclusive
of
sales
tax
or
other
22
amounts
claimed.
23
(2)
A
person
may
not
perform,
offer
to
perform,
or
advertise
any
phar
-
24
macy
benefit
management
service
in
this
state
unless
the
person
is
regis
-
25
tered
as
a
pharmacy
benefit
manager
with
the
department
of
insurance.
A
per
-
26
son
may
not
utilize
the
services
of
another
person
as
a
pharmacy
benefit
man
-
27
ager
if
the
person
knows
or
has
reason
to
know
that
the
other
person
does
not
28
have
a
registration
with
the
department.
Such
registration
must
occur
annu
-
29
ally
no
later
than
April
1
of
each
year
and
shall
be
on
a
form
prescribed
by
30
the
director.
The
department
may
utilize
applicable
sections
of
this
title
31
to
administer
registration
as
provided
in
this
subsection.
32
(3)
A
pharmacy
benefit
manager
shall
not
prohibit
a
pharmacist
or
re
-
33
tail
pharmacy
from
providing
a
covered
person
information
on
the
amount
of
34
the
cost
share
for
a
prescription
drug
and
the
clinical
efficacy
of
a
more
35
affordable
alternative
drug
if
one
is
available,
and
a
pharmacy
benefit
man
-
36
ager
may
not
penalize
a
pharmacist
or
retail
pharmacy
for
disclosing
such
in
-
37
formation
to
a
covered
person
or
for
selling
to
a
covered
person
a
more
af
-
38
fordable
alternative
if
one
is
available.
39
(4)
A
pharmacy
benefit
manager
shall
not
directly
or
indirectly
charge
40
a
pharmacy
benefits
plan
or
program
a
different
amount
for
a
prescription
41
drug's
ingredient
cost
or
dispensing
fee
than
the
amount
the
pharmacy
ben
-
42
efit
manager
reimburses
a
pharmacy
for
the
prescription
drug's
ingredient
43
cost
or
dispensing
fee
where
the
pharmacy
benefit
manager
retains
the
amount
44
of
any
such
difference.
45
(5)
A
pharmacy
benefit
manager
shall
apply
the
same
utilization
review,
46
fees,
copayments
or
cost
-
sharing,
days
allowance,
and
other
conditions
of
47
a
covered
person
when
the
covered
person
obtains
a
prescription
drug
from
a
48
pharmacy
that
is
included
in
the
pharmacy
benefit
manager's
pharmacy
net
-
49
4
work,
including
mail
-
order
pharmacies
and
the
pharmacy
benefit
manager's
1
owned,
affiliated,
or
preferred
pharmacies.
2
(6)
A
pharmacy
benefit
manager
shall
not:
3
(a)
Reimburse
a
network
pharmacy
an
amount
less
than
the
contract
4
price
between
the
pharmacy
benefit
manager
and
the
insurer,
third
-
party
5
payer,
or
pharmacy
services
management
organization;
or
6
(b)
Require
or
coerce
a
patient
to
use
a
pharmacy
that
is
owned
by
or
7
affiliated
with
the
pharmacy
benefit
manager.
8
(7)
A
pharmacy
benefit
manager,
a
third
-
party
payer,
or
a
discount
card
9
processor
shall
not,
directly
or
indirectly,
charge
or
hold
a
pharmacy
re
-
10
sponsible
for
any
fee,
including
but
not
limited
to
the
following:
1
1
(a)
A
fee
for
submission
of
a
claim;
12
(b)
Any
other
claim
-
related
fee;
13
(c)
A
fee
for
enrollment
or
participation
in
a
retail
pharmacy
network;
14
(d)
A
credentialing
or
recredentialing
fee;
15
(e)
A
fee
for
the
development
or
management
of
claims
processing
ser
-
16
vices
or
claims
payment
services;
or
17
(f)
A
fee
on
remittance
advice
or
a
fee
that
is
retroactive.
18
(8)
All
reimbursements
to
pharmacies
shall
be
made
through
direct
bank
19
transfers,
checks,
or
another
payment
method
that
does
not
incur
any
pro
-
20
cessing
fees
for
the
pharmacy.
A
check
shall
have
a
one
-
hundred
-
eighty
(180)
21
day
expiration
to
deposit.
22
(9)
A
pharmacy
benefit
manager
or
third
-
party
payer
shall
not
prohibit
23
a
pharmacist
or
pharmacy
from:
24
(a)
Participating
in
a
class
action
lawsuit;
25
(b)
Disclosing
to
the
plan
sponsor
or
to
the
patient
information
re
-
26
garding
the
adjudicated
reimbursement
paid
to
the
pharmacy
if
the
phar
-
27
macist
or
pharmacy
complies
with
the
requirements
of
the
federal
health
28
insurance
portability
and
accountability
act
of
1996,
29
U.S.C.
1181,
29
et
seq.;
30
(c)
Providing
relevant
information
to
a
patient
about
the
patient's
31
prescription
drug
order,
including
but
not
limited
to
the
cost
and
clin
-
32
ical
efficacy
of
a
more
affordable
alternative
drug
if
one
is
available;
33
(d)
Mailing
or
delivering
a
prescription
drug
to
a
patient
as
an
ancil
-
34
lary
service
of
a
pharmacy
if
the
practice
is
not
prohibited
by
law;
or
35
(e)
Charging
a
shipping
and
handling
fee
to
a
patient
who
has
asked
that
36
a
prescription
drug
be
mailed
or
delivered
if
the
practice
is
not
pro
-
37
hibited
by
law.
38
(10)
A
pharmacy
benefit
manager
or
third
-
party
payer
shall
not:
39
(a)
Require
pharmacy
accreditation
standards
or
recertification
re
-
40
quirements
inconsistent
with,
more
stringent
than,
or
in
addition
to
41
federal
and
state
requirements
for
licensure
as
a
pharmacy
in
this
42
state;
or
43
(b)
Exclude
a
pharmacy
from
the
pharmacy
benefit
manager's
or
third
-
44
party
payer's
network
based
solely
on
the
pharmacy
being
newly
opened
or
45
open
for
less
than
a
defined
period
of
time
or
because
a
license
or
loca
-
46
tion
transfer
occurs,
unless
there
is
pending
investigation
for
fraud,
47
waste,
or
abuse.
48
(11)
A
pharmacist
or
pharmacy
that
belongs
to
a
pharmacy
services
admin
-
49
istrative
organization
shall
be
entitled
to
receive
a
copy
of
a
contract
be
-
50
5
tween
the
pharmacy
services
administrative
organization
and
a
pharmacy
ben
-
1
efit
manager
or
third
-
party
payer
on
the
pharmacy's
or
pharmacist's
behalf.
2
(12)
A
pharmacy
benefit
manager
or
third
-
party
payer
shall
provide
a
3
pharmacy
or
pharmacist
with
the
processor
control
number,
bank
identifi
-
4
cation
number,
and
group
number
for
each
pharmacy
network
established
or
5
administered
by
a
pharmacy
benefit
manager
or
third
-
party
payer
to
enable
6
the
pharmacy
to
make
an
informed
contracting
decision.
7
(5)
(13)
The
pharmacy
benefit
manager
shall
pass
along
or
return
one
8
hundred
percent
(100%)
of
any
manufacturer
rebate
to
a
pharmacy
benefits
9
plan
or
program,
including
any
payment,
discount,
incentive,
fee,
price
10
concession,
or
other
remuneration.
1
1
(6)
(14)
The
pharmacy
benefit
manager
shall
provide
full
and
complete
12
disclosure
of:
13
(a)
The
cost,
price,
and
reimbursement
of
the
prescription
drug
to
each
14
health
plan,
payer,
and
pharmacy
with
which
the
pharmacy
benefit
man
-
15
ager
has
a
contract
or
agreement
to
provide
pharmacy
benefit
management
16
services;
17
(b)
Each
fee,
markup,
and
discount
charged
or
imposed
by
the
pharmacy
18
benefit
manager
to
each
health
plan,
payer,
and
pharmacy
with
which
the
19
pharmacy
benefit
manager
has
a
contract
or
agreement
for
pharmacy
bene
-
20
fit
management
services;
or
21
(c)
The
aggregate
amount
of
all
remuneration
the
pharmacy
benefit
man
-
22
ager
receives
from
a
prescription
drug
manufacturer
for
a
prescription
23
drug,
including
any
rebate,
discount,
administration
fee,
and
any
other
24
payment
or
credit
obtained
or
agreement
for
pharmacy
benefit
management
25
services
to
a
health
plan
or
payer.
26
(7)
(15)
A
pharmacy
benefit
manager
using
maximum
allowable
cost
pric
-
27
ing
may
place
a
drug
on
a
maximum
allowable
cost
list
if
the
pharmacy
benefit
28
manager
does
the
following:
29
(a)
Ensures
that
the
drug:
30
(i)1.
Is
listed
as
A
-
rated
or
B
-
rated
in
the
most
recent
ver
-
31
sion
of
the
United
States
food
and
drug
administration's
ap
-
32
proved
drug
products
with
therapeutic
equivalence
evalua
-
33
tions,
also
known
as
the
"orange
book";
or
34
2.
Has
an
NR
or
NA
rating
or
a
similar
rating
by
a
nationally
35
recognized
reference;
and
36
(ii)
Is
available
for
purchase
by
pharmacies
in
the
state
from
na
-
37
tional
or
regional
wholesalers
and
is
not
obsolete;
38
(b)
Provides
to
a
network
pharmacy,
at
the
time
a
contract
is
entered
39
into
or
renewed
with
the
network
pharmacy,
the
sources
used
to
determine
40
the
maximum
allowable
cost
pricing
for
the
maximum
allowable
cost
list
41
specific
to
that
provider;
42
(c)
Reviews
and
updates
maximum
allowable
cost
price
information
at
43
least
once
every
seven
(7)
business
days
to
reflect
any
modification
of
44
maximum
allowable
cost
pricing;
45
(d)
Establishes
a
process
for
eliminating
products
from
the
maximum
al
-
46
lowable
cost
list
or
modifying
maximum
allowable
cost
prices
in
a
timely
47
manner
to
remain
consistent
with
pricing
changes
and
product
availabil
-
48
ity
in
the
marketplace;
49
6
(e)
Establishes
a
process
by
which
a
network
pharmacy,
or
a
network
1
pharmacy's
contracting
agent,
may
appeal
the
reimbursement
for
a
2
generic
drug
no
later
than
thirty
(30)
days
after
such
reimbursement
is
3
made;
and
4
(f)
Provides
a
process
for
each
of
its
network
pharmacies
to
readily
ac
-
5
cess
the
maximum
allowable
cost
list
specific
to
that
provider.
6
(16)
A
pharmacy
benefit
manager
or
third
-
party
payer
shall
not
make
or
7
allow
any
reduction
in
payment
for
pharmacy
services
by
a
pharmacy
benefit
8
manager
or
third
-
party
payer
or
directly
or
indirectly
reduce
a
payment
for
9
pharmacy
services
under
a
reconciliation
process
to
an
effective
rate
of
re
-
10
imbursement,
including
generic
effective
rates,
brand
effective
rates,
di
-
1
1
rect
and
indirect
remuneration
fees,
or
any
other
reduction
or
aggregate
re
-
12
duction
of
payments.
13
(8)
(17)
No
pharmacy
benefit
manager
may
retroactively
deny
or
reduce
14
a
claim
for
reimbursement
of
the
cost
of
services
after
the
claim
has
been
15
adjudicated
by
the
pharmacy
benefit
manager
unless:
16
(a)
The
adjudicated
claim
was
submitted
fraudulently
or
improperly;
or
17
(b)
The
pharmacy
benefit
manager's
payment
on
the
adjudicated
claim
was
18
incorrect
because
the
pharmacy
or
pharmacist
had
already
been
paid
for
19
the
services.
20
(9)
(18)
If
the
director
finds
a
pharmacy
benefit
manager
has
violated
21
this
section
or
any
provision
of
title
41,
Idaho
Code,
then
the
director
may
22
subject
the
pharmacy
benefit
manager
to
any
or
all
of
the
actions,
penalties,
23
and
remedies
referenced
in
sections
41
-
117,
41
-
1016,
and
41
-
1026,
Idaho
24
Code.
25
(10)
(19)
(a)
No
later
than
January
1,
2025,
and
each
year
thereafter,
26
each
licensed
pharmacy
benefit
manager
shall
report
to
the
director
of
27
the
department
of
insurance
the
following
information:
28
(i)
The
aggregate
amount
of
the
difference
between
the
amount
29
the
pharmacy
benefit
manager
paid
each
pharmacy
on
behalf
of
the
30
health
plan
for
prescription
drugs;
and
31
(ii)
If
at
any
time
during
the
reporting
year
the
pharmacy
bene
-
32
fit
manager
moved
or
reassigned
a
prescription
drug
to
a
formulary
33
tier
that
has
a
higher
cost,
higher
copayment,
higher
coinsurance,
34
higher
deductible
to
a
consumer,
or
lower
reimbursement
to
a
phar
-
35
macy,
an
explanation
of
the
reason
why
the
drug
was
moved
or
reas
-
36
signed,
including
whether
the
move
or
reassignment
was
determined
37
or
requested
by
a
prescription
drug
manufacturer
or
other
entity.
38
(b)
Any
pharmacy
benefit
manager
that
owns,
controls,
or
is
affiliated
39
with
a
pharmacy
shall
also
report
any
difference
in
reimbursement
rates
40
or
practices,
direct
and
indirect
remuneration
fees
or
other
price
con
-
41
cessions,
and
clawbacks
between
a
pharmacy
that
is
owned,
controlled,
42
or
affiliated
with
the
pharmacy
benefit
manager
and
any
other
pharmacy.
43
(11)
(20)
In
addition
to
any
other
requirements
in
this
title,
all
con
-
44
tractual
arrangements
executed,
amended,
adjusted,
or
renewed
between
a
45
pharmacy
benefit
manager
and
a
pharmacy
benefits
plan
or
program
must
in
-
46
clude,
in
substantial
form,
requirements,
to
the
extent
allowable
by
law,
47
to:
48
(a)
Use
a
pass
-
through
pricing
model;
49
7
(b)
Exclude
terms
that
allow
for
the
direct
or
indirect
engagement
in
1
the
practice
of
spread
pricing;
2
(c)
Ensure
that
funds
received
in
relation
to
providing
services
for
a
3
pharmacy
benefits
plan
or
program
or
a
pharmacy
are
used
or
distributed
4
only
pursuant
to
the
pharmacy
benefit
manager's
contract
with
the
phar
-
5
macy
benefits
plan
or
program
or
with
the
pharmacy
or
as
otherwise
re
-
6
quired
by
applicable
law;
7
(d)
Require
the
pharmacy
benefit
manager
to
pass
one
hundred
percent
8
(100%)
of
all
prescription
drug
manufacturer
rebates,
including
non
-
9
resident
prescription
drug
manufacturer
rebates,
received
to
the
phar
-
10
macy
benefits
plan
or
program,
if
the
contractual
arrangement
delegates
1
1
the
negotiation
of
rebates
to
the
pharmacy
benefit
manager,
for
the
12
sole
purpose
of
offsetting
defined
cost
-
sharing
and
reducing
premiums
13
of
covered
persons.
Rebates
include
any
payment,
discount,
incentive,
14
fee,
price
concession,
or
other
remuneration.
Any
excess
rebate
rev
-
15
enue
after
the
pharmacy
benefit
manager
and
the
pharmacy
benefits
plan
16
or
program
have
taken
all
actions
required
pursuant
to
this
section
must
17
be
used
for
the
sole
purpose
of
offsetting
copayments
and
deductibles
of
18
covered
persons;
19
(e)
Include
network
adequacy
requirements
that
meet
or
exceed
medicare
20
part
D
program
standards
for
convenient
access
to
the
network
pharma
-
21
cies
and
that:
22
(i)
Do
not
limit
a
network
to
solely
include
affiliated
pharma
-
23
cies;
24
(ii)
Do
not
require
a
covered
person
to
receive
a
prescrip
-
25
tion
drug
by
United
States
mail,
common
carrier,
local
courier,
26
third
-
party
company
or
delivery
service,
or
pharmacy
direct
de
-
27
livery
unless
the
prescription
drug
cannot
be
acquired
at
any
28
retail
pharmacy
in
the
pharmacy
benefit
manager's
network
for
29
the
covered
person's
pharmacy
benefits
plan
or
program.
The
30
provisions
of
this
subparagraph
do
not
prohibit
a
pharmacy
bene
-
31
fit
manager
from
operating
mail
order
or
delivery
programs
on
an
32
opt
-
in
basis
at
the
sole
discretion
of
a
covered
person,
provided
33
that
the
covered
person
is
not
penalized
through
the
imposition
34
of
any
additional
retail
cost
-
sharing
obligations
or
a
lower
al
-
35
lowed
-
quantity
limit
for
choosing
not
to
select
the
mail
order
or
36
delivery
programs;
37
(iii)
For
the
in
-
person
administration
of
covered
prescription
38
drugs,
prohibit
requiring
a
covered
person
to
receive
pharmacist
39
services
from
an
affiliated
pharmacy
or
an
affiliated
health
care
40
provider;
and
41
(iv)
Prohibit
offering
or
implementing
pharmacy
networks
that
re
-
42
quire
or
provide
a
promotional
item
or
an
incentive
to
a
covered
43
person
to
use
an
affiliated
pharmacy
or
an
affiliated
health
care
44
provider
for
the
in
-
person
administration
of
covered
prescription
45
drugs
or
advertising,
marketing,
or
promoting
an
affiliated
phar
-
46
macy
to
covered
persons.
Provided,
however,
a
pharmacy
benefit
47
manager
may
include
an
affiliated
pharmacy
in
communications
to
48
covered
persons
regarding
network
pharmacies
and
prices
as
long
as
49
the
pharmacy
benefit
manager
includes
information,
such
as
links
50
8
to
all
nonaffiliated
network
pharmacies,
in
such
communications
1
and
that
the
information
provided
is
accurate
and
of
equal
promi
-
2
nence.
The
provisions
of
this
subparagraph
may
not
be
construed
to
3
prohibit
a
pharmacy
benefit
manager
from
entering
into
an
agree
-
4
ment
with
an
affiliated
pharmacy
to
provide
pharmacist
services
to
5
covered
persons;
6
(f)
Prohibit
a
pharmacy
benefit
manager
from
conditioning
participa
-
7
tion
in
one
(1)
pharmacy
network
based
on
participation
in
any
other
8
pharmacy
network
or
from
penalizing
a
pharmacy
for
exercising
its
pre
-
9
rogative
not
to
participate
in
a
specific
pharmacy
network;
10
(g)
Prohibit
a
pharmacy
benefit
manager
from
instituting
a
network
1
1
that
requires
a
pharmacy
to
meet
accreditation
standards
inconsistent
12
with
or
more
stringent
than
applicable
federal
and
state
requirements
13
for
licensure
and
operation
as
a
pharmacy
in
this
state.
However,
a
14
pharmacy
benefit
manager
may
specify
additional
specialty
networks
15
that
require
enhanced
standards
related
to
safety
and
competency
16
necessary
to
meet
the
United
States
food
and
drug
administration's
17
limited
distribution
requirements
for
dispensing
any
drug
that,
on
a
18
drug
-
by
-
drug
basis,
requires
extraordinary
special
handling,
provider
19
coordination,
or
clinical
care
or
monitoring
when
such
extraordinary
20
requirements
cannot
be
met
by
a
retail
pharmacy.
For
purposes
of
this
21
paragraph,
drugs
requiring
extraordinary
special
handling
are
limited
22
to
drugs
that
are
subject
to
a
risk
evaluation
and
mitigation
strategy
23
approved
by
the
United
States
food
and
drug
administration
and
that:
24
(i)
Require
special
certification
of
a
health
care
provider
to
25
prescribe,
receive,
dispense,
or
administer;
or
26
(ii)
Require
special
handling
due
to
the
molecular
complexity
27
or
cytotoxic
properties
of
the
biologic
or
biosimilar
product
or
28
drug.
For
participation
in
a
specialty
network,
a
pharmacy
ben
-
29
efit
manager
may
not
require
a
pharmacy
to
meet
requirements
for
30
participation
beyond
those
necessary
to
demonstrate
the
phar
-
31
macy's
ability
to
dispense
the
drug
in
accordance
with
the
United
32
States
food
and
drug
administration's
approved
manufacturer
la
-
33
beling;
34
(h)
At
a
minimum,
require
the
pharmacy
benefit
manager
or
pharmacy
ben
-
35
efits
plan
or
program
to,
upon
revising
its
formulary
of
covered
pre
-
36
scription
drugs
during
a
plan
year,
provide
a
ninety
(90)
day
continu
-
37
ity
-
of
-
care
period
in
which
the
covered
prescription
drug
that
is
being
38
revised
from
the
formulary
continues
to
be
provided
at
the
same
cost
for
39
the
patient
for
a
period
of
ninety
(90)
days.
The
ninety
(90)
day
conti
-
40
nuity
-
of
-
care
period
commences
upon
notification
to
the
patient.
This
41
requirement
does
not
apply
if
the
covered
prescription
drug:
42
(i)
Has
been
approved
and
made
available
over
the
counter
by
the
43
United
States
food
and
drug
administration
and
has
entered
the
44
commercial
market
as
such;
45
(ii)
Has
been
removed
or
withdrawn
from
the
commercial
market
by
46
the
manufacturer;
47
(iii)
Is
subject
to
an
involuntary
recall
by
state
or
federal
au
-
48
thorities
and
is
no
longer
available
on
the
commercial
market;
or
49
9
(iv)
Has
a
generic,
biosimilar,
or
interchangeable
biologic
ap
-
1
proved
by
the
United
States
food
and
drug
administration;
2
(i)
Require
that
in
-
network
pharmacies
receive
dispensing
fees
that
3
reasonably
cover
the
costs
of
dispensing
medications
pursuant
to
sec
-
4
tion
41
-
349A,
Idaho
Code
;
and
5
(j)
Prohibit
a
pharmacy
benefit
manager
from
directly
or
indirectly
6
charging
or
holding
a
pharmacist
or
pharmacy
responsible
for
a
fee
for
7
any
step
of
or
component
or
mechanism
related
to
the
claim
adjudication
8
process,
including:
9
(i)
The
adjudication
of
a
pharmacy
benefit
claim;
10
(ii)
The
processing
or
transmission
of
a
pharmacy
benefit
claim;
1
1
(iii)
The
development
or
management
of
a
claim
processing
or
adju
-
12
dication
network;
or
13
(iv)
Participation
in
a
claim
processing
or
adjudication
network.
14
(12)
(21)
The
requirements
of
subsection
(11)
(20)
of
this
section
shall
15
not
apply
to
specialty
drugs.
For
the
purposes
of
this
section,
"specialty
16
drug"
means:
17
(a)
A
drug
that
is
subject
to
restricted
distribution
by
the
United
18
States
food
and
drug
administration;
or
19
(b)
A
drug
that
requires
special
handling,
provider
coordination,
or
20
patient
education
that
a
retail
pharmacy
cannot
provide.
21
(13)
(22)
In
addition
to
other
requirements
in
this
title,
a
partici
-
22
pation
contract
executed,
amended,
adjusted,
or
renewed
between
a
pharmacy
23
benefit
manager
and
one
(1)
or
more
pharmacies
or
pharmacists
must
include,
24
in
substantial
form,
to
the
extent
allowable
by
law,
terms
that
ensure
com
-
25
pliance
with
the
provisions
of
this
subsection.
26
(a)
The
pharmacy
benefit
manager
shall
provide
a
reasonable
adminis
-
27
trative
appeal
procedure
to
allow
a
pharmacy
or
pharmacist
to
challenge
28
the
maximum
allowable
cost
pricing
information
and
the
reimbursement
29
made
under
the
maximum
allowable
cost
as
defined
in
subsection
(1)(d)
30
of
this
section
for
a
specific
drug
as
being
below
the
acquisition
cost
31
available
to
the
challenging
pharmacy
or
pharmacist.
32
(b)
The
administrative
appeal
procedure
must
include
a
telephone
num
-
33
ber
and
email
address,
or
a
website,
for
the
purpose
of
submitting
the
34
administrative
appeal.
The
appeal
may
be
submitted
by
the
pharmacy
or
35
an
agent
of
the
pharmacy
directly
to
the
pharmacy
benefit
manager
or
36
through
a
pharmacy
service
administration
organization.
The
pharmacy
37
or
pharmacist
must
be
given
at
least
thirty
(30)
business
days
after
38
a
maximum
allowable
cost
update
or
after
an
adjudication
for
an
elec
-
39
tronic
claim
or
reimbursement
for
a
nonelectronic
claim
to
file
the
40
administrative
appeal.
41
(c)
The
pharmacy
benefit
manager
must
respond
to
the
administrative
ap
-
42
peal
within
thirty
(30)
business
days
after
receipt
of
the
appeal.
43
(i)
If
the
appeal
is
upheld,
the
pharmacy
benefit
manager
must:
44
1.
Update
the
maximum
allowable
cost
pricing
information
to
45
at
least
the
acquisition
cost
available
to
the
pharmacy;
46
2.
Permit
the
pharmacy
or
pharmacist
to
reverse
and
rebill
47
the
claim
in
question;
48
3.
Provide
to
the
pharmacy
or
pharmacist
the
national
drug
49
code
on
which
the
increase
or
change
is
based;
and
50
10
4.
Make
the
increase
or
change
effective
for
each
similarly
1
situated
pharmacy
or
pharmacist
who
is
subject
to
the
appli
-
2
cable
maximum
allowable
cost
pricing
information;
or
3
(ii)
If
the
appeal
is
denied,
the
pharmacy
benefit
manager
must
4
provide
to
the
pharmacy
or
pharmacist
the
national
drug
code
and
5
the
name
of
the
national
or
regional
pharmaceutical
wholesalers
6
operating
in
this
state
that
have
the
drug
currently
in
stock
at
a
7
price
below
the
maximum
allowable
cost
pricing
information.
8
(d)
Every
ninety
(90)
days,
a
pharmacy
benefit
manager
shall
report
to
9
the
department
the
total
number
of
appeals
received
and
denied
in
the
10
preceding
ninety
(90)
day
period,
with
an
explanation
or
reason
for
each
1
1
denial,
for
each
specific
drug
for
which
an
appeal
was
submitted
pur
-
12
suant
to
this
subsection.
13
(14)
(23)
In
addition
to
other
prohibitions
in
this
section,
a
pharmacy
14
benefit
manager
may
not
do
any
of
the
following:
15
(a)
Prohibit,
restrict,
or
penalize
in
any
way
a
pharmacy
or
pharmacist
16
from
disclosing
to
any
person
any
information
that
the
pharmacy
or
phar
-
17
macist
deems
appropriate,
including
but
not
limited
to
information
re
-
18
garding
any
of
the
following:
19
(i)
The
nature
of
treatment,
risks,
or
alternatives
thereto;
20
(ii)
The
availability
of
alternate
treatment,
consultations,
or
21
tests;
22
(iii)
The
decision
of
utilization
reviewers
or
similar
persons
to
23
authorize
or
deny
pharmacist
services;
24
(iv)
The
process
used
to
authorize
or
deny
pharmacist
services
or
25
benefits;
26
(v)
Information
on
financial
incentives
and
structures
used
by
27
the
pharmacy
benefits
plan
or
program;
28
(vi)
Information
that
may
reduce
the
costs
of
pharmacist
ser
-
29
vices;
30
(vii)
Whether
the
cost
-
sharing
obligation
exceeds
the
retail
31
price
for
a
covered
prescription
drug
and
the
availability
of
a
32
more
affordable
alternative
drug;
33
(viii)
A
decision
by
the
pharmacy
to
refuse
to
accept
pharmacy
ben
-
34
efit
manager
payment
for
the
dispensing
of
an
individual
prescrip
-
35
tion
on
the
basis
of
an
aggregate
pharmacy
benefit
manager
payment
36
of
less
than
the
pharmacy's
costs
to
provide
the
service;
or
37
(ix)
The
financial
details
of
a
prescription
claim;
38
(b)
Prohibit,
restrict,
or
penalize
in
any
way
a
pharmacy
or
pharma
-
39
cist
from
disclosing
information
to
the
department,
law
enforcement,
or
40
state
and
federal
governmental
officials,
provided
that
the
recipient
41
of
the
information
represents
that
it
has
the
authority,
to
the
extent
42
provided
by
state
or
federal
law,
to
maintain
proprietary
information
43
as
confidential
and
before
disclosure
of
information
designated
as
con
-
44
fidential,
the
pharmacist
or
pharmacy
marks
as
confidential
any
docu
-
45
ment
in
which
the
information
appears
or
requests
confidential
treat
-
46
ment
for
any
oral
communication
of
the
information;
47
(c)
Communicate
at
the
point
-
of
-
sale,
or
otherwise
require,
a
cost
-
48
sharing
obligation
for
the
covered
person
in
an
amount
that
exceeds
the
49
lesser
of:
50
11
(i)
The
applicable
cost
-
sharing
amount
under
the
applicable
1
pharmacy
benefits
plan
or
program;
or
2
(ii)
The
amount
that
will
be
retained
by
the
pharmacy;
3
(d)
Transfer
or
share
records
relative
to
prescription
information
4
containing
patient
-
identifiable
or
prescriber
-
identifiable
data
5
to
an
affiliated
pharmacy
for
any
commercial
purpose
other
than
the
6
limited
purposes
of
facilitating
pharmacy
reimbursement,
formulary
7
compliance,
or
utilization
review
on
behalf
of
the
applicable
pharmacy
8
benefits
plan
or
program;
9
(e)
Fail
to
make
any
payment
due
to
a
pharmacy
for
an
adjudicated
claim
10
with
a
date
of
service
before
the
effective
date
of
a
pharmacy's
ter
-
1
1
mination
from
a
pharmacy
benefit
network,
unless
payments
are
withheld
12
because
of
fraud,
waste,
or
abuse
on
the
part
of
the
pharmacy
or
except
13
as
otherwise
required
by
law;
or
14
(f)
Terminate
the
contract
of,
penalize,
or
disadvantage
a
pharmacist
15
or
pharmacy
solely
due
to
a
pharmacist
or
pharmacy:
16
(i)
Disclosing
information
about
pharmacy
benefit
manager
prac
-
17
tices
in
accordance
with
this
section;
18
(ii)
Exercising
any
of
its
prerogatives
pursuant
to
this
section;
19
or
20
(iii)
Sharing
any
portion,
or
all,
of
the
pharmacy
benefit
manager
21
contract
with
the
department
of
insurance
pursuant
to
a
complaint
22
or
a
query
regarding
whether
the
contract
is
in
compliance
with
the
23
provisions
of
this
section.
24
(15)
(24)
In
complying
with
the
requirements
of
this
section,
a
pharmacy
25
benefit
manager
or
its
agents,
and
the
director
or
the
director's
agents,
26
shall
not
directly
or
indirectly
publish
or
otherwise
disclose
any
infor
-
27
mation
reported
to
the
director
under
this
section
that
would
reveal:
the
28
identity
of
a
specific
pharmacy
benefits
plan,
program,
or
pharmaceutical
29
manufacturer;
the
prices
charged
for
a
specific
drug
or
class
of
drugs;
the
30
amount
of
any
rebates
provided
for
a
specific
drug
or
class
of
drugs
or
the
31
pharmaceutical
manufacturer;
or
information
that
would
otherwise
have
the
32
potential
to
compromise
the
financial,
competitive,
or
proprietary
nature
33
of
such
information.
Any
such
information
shall
be
protected
from
disclo
-
34
sure
as
confidential
and
proprietary
and
shall
not
be
regarded
as
a
public
35
record
pursuant
to
section
74
-
101,
Idaho
Code.
A
pharmacy
benefit
manager
36
shall
impose
the
confidentiality
protections
and
requirements
of
this
sec
-
37
tion
on
any
agent
or
downstream
third
party
that
performs
health
care
or
ad
-
38
ministrative
services
on
behalf
of
the
pharmacy
benefit
manager
that
may
re
-
39
ceive
or
have
access
to
such
information,
and
the
director
shall
impose
the
40
confidentiality
protections
and
requirements
of
this
section
on
any
agent
41
or
downstream
third
party
directly
or
indirectly
involved
in
the
administra
-
42
tion
of
this
section
that
may
receive
or
have
access
to
such
information.
43
SECTION
3.
An
emergency
existing
therefor,
which
emergency
is
hereby
44
declared
to
exist,
this
act
shall
be
in
full
force
and
effect
on
and
after
its
45
passage
and
approval.
46