Revises provisions governing the administration of pharmacy benefits under Medicaid. (BDR 38-224)

S.B. 149

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SENATE BILL NO. 149–SENATOR STONE

PREFILED JANUARY 30, 2025
____________

Referred to Committee on Health and Human Services

SUMMARY—Revises provisions governing the administration of
pharmacy benefits under Medicaid. (BDR 38-224)

FISCAL NOTE: Effect on Local Government: No.
Effect on the State: Yes.

~

EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted.

AN ACT relating to Medicaid; requiring the Department of Health
and Human Services to select and contract with a state
pharmacy benefit manager to manage pharmacy benefits
for Medicaid and certain other health benefit plans;
prescribing certain duties of t he state pharmacy benefit
manager; requiring that the Department approve certain
contracts entered into by the state pharmacy benefit
manager; prohibiting the state pharmacy benefit manager
from engaging in certain activ ities; providing monetary
penalties for certain violations; requiring a Medicaid
managed care organization to contract with and utilize the
state pharmacy benefit manager to manage pharmacy
benefits; and providing other matters properly relating
thereto.
Legislative Counsel’s Digest:
Existing law authorizes the Department of Health and Human Services to enter 1
into a contract with a pharmacy benefit manager or a health maintenance 2
organization to manage coverage of prescription drugs under the State Plan for 3
Medicaid, the Children’s Health Insurance Program and certain other health benefit 4
plans that elect to use the list of preferred prescription drugs established for 5
Medicaid as their formulary. (NRS 422.4025, 422.4053) 6
Section 13 of this bill instead requires the Department to enter into a contract 7
with one pharmacy benefit manager, known as the state pharmacy benefit manager, 8
to manage all such coverage of prescription drugs. Sections 13 and 14 of this bill 9
prescribe certain required terms of such a contract. Section 4 of this bill prescribes 10
the required contents of an application to serve as the state pharmacy benefit 11
manager. Section 5 of this bill requires the Department to adopt regulations 12
establishing: (1) the criteria that a pharmacy benefit manager must meet in order to 13

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serve as the state pharmacy benefit manager; and (2) certain requirements relating 14
to the payment of pharmacies for services rendered under the contract between the 15
Department and the state pharmacy benefit manager. Section 9 of this bill requires 16
a Medicaid managed care organization to contract with and utilize the state 17
pharmacy benefit manager to administer all pharmacy benefits for recipients of 18
Medicaid who receive such benefits through the Medicaid managed care 19
organization. 20
Section 6 of this bill requires that the Department approve any contract 21
between the state pharmacy benefit manager and a pharmacy or an entity that 22
contracts on behalf of a pharmacy if the contract is for the provision of benefits 23
under the contract between the state pharmacy benefit manager and the 24
Department, or any revision, suspension or termination of such a contract, in order 25
for the contract, revision, suspension or termination to become effective. Section 6 26
also authorizes the Department to change certain payment arrangements as 27
necessary to comply with federal requirements. Finally, section 6 prohibits the state 28
pharmacy benefit manager from entering into, renewing or amending a contract that 29
conflicts with the obligations of the state pharmacy benefit manager under the 30
provisions of this bill. Section 7 of this bill: (1) prohibits the state pharmacy benefit 31
manager from taking certain actions to avoid paying reimbursement owed to 32
pharmacies; and (2) authorizes the Department to impose a monetary penalty on the 33
state pharmacy benefit manager for violating that prohibition. 34
Sections 2 and 3 of this bill define certain terms, and section 8 of this bill 35
establishes the applicability of those definitions. Section 10 of this bill applies 36
certain other definitions in existing law to sections 4-7. Sections 11, 12 and 15 of 37
this bill make conforming changes to transfer certain duties to the state pharmacy 38
benefit manager and revise certain references in accordance with the provisions of 39
this bill. 40

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN
SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

Section 1. Chapter 422 of NRS is hereby amended by adding 1
thereto the provisions set forth as sections 2 to 7, inclusive, of this 2
act. 3
Sec. 2. “Medicaid managed care organization” means a 4
health maintenance organization with which the Department 5
enters into a contract pursuant to NRS 422.273 to provide health 6
care services through managed care to recipients of Medicaid. 7
Sec. 3. “State pharmacy benefit manager” means the 8
pharmacy benefit manager that enters into a contract with the 9
Department pursuant to NRS 422.4053. 10
Sec. 4. 1. A pharmacy benefit manager that meets the 11
eligibility requirements established pursuant to section 5 of this 12
act may apply to become the state pharmacy benefit manager by 13
submitting an application to the Department on a form prescribed 14
by the Department. The application must include, without 15
limitation: 16
(a) Any activity, policy, practice, contract or agreement of the 17
applicant that may directly or indirectly present a conflict of 18

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interest in the relationship between the applicant and the 1
Department or a Medicaid managed care organization, including, 2
without limitation, any such activity, policy, practice , contract or 3
agreement that operates solely or partially outside this State; 4
(b) Any direct or indirect fees, charges or assessments that the 5
applicant imposes on any pharmacy in this State: 6
(1) With which the applicant shares common ownership, 7
management or control; 8
(2) Which is owned, managed or controlled by any 9
management, parent or subsidiary of the applicant, any company 10
jointly held by the applicant or any company otherwise affiliated 11
with the applicant by a common owner, manager or holding 12
company; 13
(3) For which the board of directors of the pharmacy 14
shares any members in common with the board of directors of the 15
applicant; or 16
(4) Which share s any manager in common with the 17
applicant; 18
(c) Any direct or indirect fees, charges or assessments that the 19
applicant imposes on pharmacies and pharmacists in this State; 20
and 21
(d) All common ownership, common management, common 22
members of a board of directors, shared managers or shared 23
control between: 24
(1) The applicant, or any management, parent, subsidiary 25
or jointly held company of the applicant or any company otherwise 26
affiliated by a common owner, manager or holding company with 27
the applicant; and 28
(2) Any of the following entities: 29
(I) A managed care organization or a company affiliated 30
with a managed care organization; 31
(II) A pharmacy services administrative organization, 32
any other entity that contracts on behalf of a pharmacy or any 33
company affiliated with a pharmacy services admin istrative 34
organization or such an entity; 35
(III) A wholesaler, as defined in NRS 639.016, or any 36
company affiliated with a wholesaler; 37
(IV) A third party or any company affiliated with a third 38
party; and 39
(V) A pharmacy or any company affiliated wi th a 40
pharmacy. 41
2. As used in this section, “third party” means any insurer or 42
organization providing health coverage or benefits in accordance 43
with state or federal law. 44

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Sec. 5. 1. The Department shall adopt regulations 1
establishing: 2
(a) The criteria that a pharmacy benefit manager must meet in 3
order to be eligible to enter into a contract with the Department 4
pursuant to NRS 422.4 053 to serve as the state pharmacy benefit 5
manager. 6
(b) The methodology for reimbursement t o the pharmacies for 7
providing benefits under the contr act entered into pursuant to 8
NRS 422.4053. Th e methodology for reimbursement must not 9
discriminate against pharmacies owned or contracted by a health 10
care facility that is registered as a covered entity pursuant to 42 11
U.S.C. § 256b, except where required by the Centers for Medicare 12
and Medicaid Services of the United States Department of Health 13
and Human Services. 14
(c) Dispensing fees paid to pharmacies and pharmacists for 15
providing benefits under the contract entered into pursuant to 16
NRS 422.4053. In establishing those dispensing fee s, the 17
Department may consider applicable guidance promulgated by the 18
Centers for Medicare and Medicaid Services of the United States 19
Department of Health and Human Services. 20
2. To the extent authorized by federal law, the dispensing fees 21
established pursuant to paragraph (c) of subsection 1 may vary by 22
pharmacy type, including, without limitation, rural and 23
independently owned pharmacies, pharmacies owned by a 24
corporation operating in multiple states and pharmacies owned 25
and contracted by a health care facility that is registered as a 26
covered entity pursuant to 42 U.S.C. § 256b. 27
Sec. 6. 1. The state pharmacy benefit manager shall submit 28
to the Department for review: 29
(a) Each contract for the provision of benefits under the 30
contract entered into pursuant to NRS 422.4053 between the state 31
pharmacy benefit manager and a pharmacy or an entity that 32
contracts on behalf of such a pharmacy; 33
(b) Each revision to the terms and conditions of a contract 34
described in paragraph (a); and 35
(c) Each suspension or termination of a contract described in 36
paragraph (a). 37
2. The Department shall review each submission received 38
pursuant to subsection 1 and approve or deny the contract, 39
revision, suspension or termination, as applicable. A contract, 40
revision, suspension or termination is not effective until the 41
contract, revision, suspension or termination, as applicable, is 42
approved by the Department. 43
3. The Department may change a payment arrangement 44
between the Department and a Medicaid managed care 45

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organization, the Department and the state pharmacy benefit 1
manager or a Medicaid managed care organization and the state 2
pharmacy benefit manager in order to comply with federal or state 3
law or regulations or any other agreement between the 4
Department and the Federal Government. 5
4. The state pharmacy benefit manager shall not enter into, 6
renew or amend any contract that is inconsistent with: 7
(a) The terms and conditions of the contract between the state 8
pharmacy benefit manager and the Department; or 9
(b) The reimbursement methodologies and dispensing fees 10
established by the Department pursuant to subsection 1 of section 11
5 of this act. 12
5. Any contract entered into by the state pharmacy benefit 13
manager in violation of subsection 4 is void and unenforceable. 14
Sec. 7. 1. In the course of providing benefits under the 15
contract entered into pursuant to NRS 422.4053, the state 16
pharmacy benefit manager: 17
(a) Shall not enter into a contract with a pharmacy that 18
authorizes the release of the state pharmacy benefit manager from 19
any payment owed to the pharmacy or remove the pharmacy from 20
a network after the pharmacy has rendered services; 21
(b) Must not be released from an obligation to make a payment 22
owed to a pharmacy for services performed before the termination 23
of a contract between the state pharmacy benefit manager and a 24
Medicaid managed care organization or pharmacy, as applicable; 25
and 26
(c) Shall administer, adjudicate and, when appropriate, 27
reimburse any claim for services performed before the termination 28
of the contract between the state pharmacy benefit manager and a 29
Medicaid managed care organization in accordance with the 30
contract between the state pharmacy benefit manager and the 31
Medicaid managed care organization. 32
2. The Department may impose a fine of $25,000 per day that 33
a violation occurs for any violation of subsection 1. 34
Sec. 8. NRS 422.001 is hereby amended to read as follows: 35
422.001 As used in this chapter, unless the context otherwise 36
requires, the words and terms defined in NRS 422.003 to 422.054, 37
inclusive, and sections 2 and 3 of this act have the meanings 38
ascribed to them in those sections. 39
Sec. 9. NRS 422.273 is hereby amended to read as follows: 40
422.273 1. To the extent that money is available, the 41
Department shall: 42
(a) Establish a Medicaid managed care program to provide 43
health care services to recipients of Medicaid in all geographic areas 44
of this State. The program is not required to provide services to 45

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recipients of Medicaid who are aged, blind or disabled pursuant to 1
Title XVI of the Social Security Act, 42 U.S.C. §§ 1381 et seq. 2
(b) Conduct a statewide procurement process to select health 3
maintenance organizations to provide the services described in 4
paragraph (a). 5
2. For any Medicaid managed care program established in the 6
State of Nevada, the Department shall contract only with a health 7
maintenance organization that has: 8
(a) Negotiated in good faith with a federally -qualified health 9
center to provide health care services for the health maintenance 10
organization; 11
(b) Negotiated in good faith with the University Medical Center 12
of Southern Nevada to provide inpatient and ambu latory services to 13
recipients of Medicaid; 14
(c) Negotiated in good faith with the University of Nevada 15
School of Medicine to provide health care services to recipients of 16
Medicaid; and 17
(d) Complied with the provisions of subsection 2 of 18
NRS 695K.220. 19
 Nothing in this section shall be construed as exempting a 20
federally-qualified health center, the University Medical Center of 21
Southern Nevada or the University of Nevada School of Medicine 22
from the requirements for contracting with the health maintenance 23
organization. 24
3. During the development and implementation of any 25
Medicaid managed care program, the Department shall cooperate 26
with the University of Nevada School of Medicine by assisting in 27
the provision of an adequate and diverse group of patients upon 28
which the school may base its educational programs. 29
4. The University of Nevada School of Medicine may establish 30
a nonprofit organization to assist in any research necessary for the 31
development of a Medicaid managed care program, receive and 32
accept gift s, grants and donations to support such a program and 33
assist in establishing educational services about the program for 34
recipients of Medicaid. 35
5. For the purpose of contracting with a Medicaid managed 36
care program pursuant to this section, a health main tenance 37
organization is exempt from the provisions of NRS 695C.123. 38
6. To the extent that money is available, a Medicaid managed 39
care program must include, without limitation, a state -directed 40
payment arrangement established in accordance with 42 C.F.R. § 41
438.6(c) to require a Medicaid managed care organization to 42
reimburse a critical access hospital and any federally -qualified 43
health center or rural health clinic affiliated with a critical access 44
hospital for covered services at a rate that is equal to o r greater than 45

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the rate received by the critical access hospital, federally -qualified 1
health center or rural health clinic, as applicable, for services 2
provided to recipients of Medicaid on a fee-for-service basis. 3
7. A Medicaid managed care program must require each 4
health maintenance organization that enters into a contract with 5
the Department pursuant to this section to contract with and 6
utilize the state pharmacy benefit manager for the purpose of 7
administering all pharmacy benefits for recipients of Medicaid 8
who receive pharmacy benefits through the health maintenance 9
organization. 10
8. The provisions of this section apply to any managed care 11
organization, including a health maintenance organization, that 12
provides health care services to recipients of Medicaid under the 13
State Plan for Medicaid or the Children’s Health Insurance Program 14
pursuant to a contract with the Division. Such a managed care 15
organization or health maintenance organization is not required to 16
establish a system for conducting extern al reviews of adverse 17
determinations in accordance with chapter 695B, 695C or 695G of 18
NRS. This subsection does not exempt such a managed care 19
organization or health maintenance organization for services 20
provided pursuant to any other contract. 21
[8.] 9. As used in this section, unless the context otherwise 22
requires: 23
(a) “Critical access hospital” means a hospital which has been 24
certified as a critical access hospital by the Secretary of Health and 25
Human Services pursuant to 42 U.S.C. § 1395i-4(e). 26
(b) “Federally-qualified health center” has the meaning ascribed 27
to it in 42 U.S.C. § 1396d(l)(2)(B). 28
(c) “Health maintenance organization” has the meaning ascribed 29
to it in NRS 695C.030. 30
(d) “Managed care organization” has the meaning ascribed to it 31
in NRS 695G.050. 32
(e) “Rural health clinic” has the meaning ascribed to it in 42 33
C.F.R. § 405.2401. 34
Sec. 10. NRS 422.401 is hereby amended to read as follows: 35
422.401 As used in NRS 422.401 to 422.406, inclusive, and 36
sections 4 to 7, inclusive, of this act, unless the context otherwise 37
requires, the words and terms defined in NRS 422.4015 to 38
422.4024, inclusive, have the meanings ascribed to them in those 39
sections. 40
Sec. 11. NRS 422.4025 is hereby amended to read as follows: 41
422.4025 1. The Department shall [: 42
(a) By] , by regulation, develop a list of preferred prescription 43
drugs to be used for the Medicaid program and the Children’s 44
Health Insurance Program, and each public or nonprofit health 45

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benefit plan that elects to use the list of preferred prescription drugs 1
as its formulary pursuant to NRS 287.012, 287.0433 or 687B.407 . 2
[; and 3
(b) Negotiate and enter into agreements to purchase the drugs 4
included on the list of preferred prescription drugs on behalf of the 5
health benefit plans described in paragraph (a) or enter into a 6
contract pursuant to NRS 422.4053 with a pharmacy benefit 7
manager, health maintenance organization or one or more p ublic or 8
private entities in this State, the District of Columbia or other states 9
or territories of the United States, as appropriate, to negotiate such 10
agreements.] 11
2. The Department shall, by regulation, establish a list of 12
prescription drugs which must be excluded from any restrictions that 13
are imposed by the Medicaid program on drugs that are on the list of 14
preferred prescription drugs established pursuant to subsection 1. 15
The list established pursuant to this subsection must include, 16
without limitation: 17
(a) Prescription drugs that are prescribed for the treatment of the 18
human immunodeficiency virus, including, without limitation, 19
antiretroviral medications; 20
(b) Antirejection medications for organ transplants; 21
(c) Antihemophilic medications; and 22
(d) Any prescription drug which the Board identifies as 23
appropriate for exclusion from any restrictions that are imposed by 24
the Medicaid program on drugs that are on the list of preferred 25
prescription drugs. 26
3. The regulations must provide that the Board m akes the final 27
determination of: 28
(a) Whether a class of therapeutic prescription drugs is included 29
on the list of preferred prescription drugs and is excluded from any 30
restrictions that are imposed by the Medicaid program on drugs that 31
are on the list of preferred prescription drugs; 32
(b) Which therapeutically equivalent prescription drugs will be 33
reviewed for inclusion on the list of preferred prescription drugs and 34
for exclusion from any restrictions that are imposed by the Medicaid 35
program on drugs that are on the list of preferred prescription drugs; 36
and 37
(c) Which prescription drugs should be excluded from any 38
restrictions that are imposed by the Medicaid program on drugs that 39
are on the list of preferred prescription drugs based on continuity of 40
care concerning a specific diagnosis, condition, class of therapeutic 41
prescription drugs or medical specialty. 42
4. The list of preferred prescription drugs established pursuant 43
to subsection 1 must include, without limitation: 44

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(a) Any prescription drug determ ined by the Board to be 1
essential for treating sickle cell disease and its variants; and 2
(b) Prescription drugs to prevent the acquisition of human 3
immunodeficiency virus. 4
5. The regulations must provide that each new pharmaceutical 5
product and each existing pharmaceutical product for which there is 6
new clinical evidence supporting its inclusion on the list of preferred 7
prescription drugs must be made available pursuant to the Medicaid 8
program with prior authorization until the Board reviews the product 9
or the evidence. 10
6. The Medicaid program must cover a prescription drug that is 11
not included on the list of preferred prescription drugs as if the drug 12
were included on that list if: 13
(a) The drug is: 14
(1) Used to treat hepatitis C; 15
(2) Used to provide medication-assisted treatment for opioid 16
use disorder; 17
(3) Used to support safe withdrawal from substance use 18
disorder; or 19
(4) In the same class as a drug on the list of preferred 20
prescription drugs; and 21
(b) All preferred prescription drugs within the same class as the 22
drug are unsuitable for a recipient of Medicaid because: 23
(1) The recipient is allergic to all preferred prescription drugs 24
within the same class as the drug; 25
(2) All preferred prescription drugs within the same class as 26
the drug are contraindicated for the recipient or are likely to interact 27
in a harmful manner with another drug that the recipient is taking; 28
(3) The recipient has a history of adverse reactions to all 29
preferred prescription drugs within the same class as the drug; or 30
(4) The drug has a unique indication that is supported by 31
peer-reviewed clinical evidence or approved by the United States 32
Food and Drug Administration. 33
7. The Medicaid program must automatically cover any typical 34
or atypical antipsychotic medication or anticonvulsant medication 35
that is not on the list of preferred prescription drugs upon the 36
demonstrated therapeutic failure of one drug on that list to 37
adequately treat the condition of a recipient of Medicaid. 38
8. On or before February 1 of each year, the Department shall: 39
(a) Compile a report concerning the [agreements negotiated 40
pursuant to paragraph (b) of subsection 1 and contracts ] contract 41
entered into pursuant to subsection 1 of NRS 422.4053 with the 42
state pharmacy benefit manager and any contracts entered into 43
pursuant to subsection 2 of NRS 422.4053 , which must include, 44
without limitation, the financial effects of obtaining prescription 45

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drugs through [those agreements and contracts, in total and 1
aggregated separately for agreements negotiated by the Department, 2
contracts with a pharmacy benefit manager, contracts with a health 3
maintenance organization and contracts with public and private 4
entities from this State, the District of Columbia and other states and 5
territories of the United States;] each such contract; and 6
(b) Post the report on an Internet website maintained by the 7
Department and submit the report to the Director of the Legislative 8
Counsel Bureau for transmittal to: 9
(1) In odd-numbered years, the Legislature; or 10
(2) In even-numbered years, the Legislative Commission. 11
Sec. 12. NRS 422.4032 is hereby amended to read as follows: 12
422.4032 1. The [Department or a ] state pharmacy benefit 13
manager [or health maintenance organization with which the 14
Department contracts pursuant to NRS 422.4053 to manage 15
prescription drug benefits ] shall allow a recipient of Medicaid who 16
has been diagnosed with stage 3 or 4 cancer or the attending 17
practitioner of the recipient to apply for an exemption from step 18
therapy that would otherwise be required pursuant to NRS 422.403 19
to instead use a prescription drug prescribed by the attending 20
practitioner to treat the cancer or any symptom thereof of the 21
recipient of Medicaid. The application process must: 22
(a) Allow the recipient or attending practitioner, or a designated 23
advocate for the recipient or attending practitioner, to present to the 24
[Department,] state pharmacy benefit manager [or health 25
maintenance organization, as applicable, ] the clinical rationale for 26
the exemption and any relevant medical information. 27
(b) Clearly prescribe the information and supporting documents 28
that must be submitted with the application, the criteria that will be 29
used to evaluate the request and the cond itions under which an 30
expedited determination pursuant to subsection 4 is warranted. 31
(c) Require the review of each application by at least one 32
physician, registered nurse or pharmacist. 33
2. The information and supporting documentation required 34
pursuant to paragraph (b) of subsection 1: 35
(a) May include, without limitation: 36
(1) The medical history or other health records of the 37
recipient demonstrating that the recipient has: 38
(I) Tried other drugs included in the pharmacological 39
class of drugs for which the exemption is requested without success; 40
or 41
(II) Taken the requested drug for a clinically appropriate 42
amount of time to establish stability in relation to the cancer and the 43
guidelines of the prescribing practitioner; and 44
(2) Any other relevant clinical information. 45

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(b) Must not include any information or supporting 1
documentation that is not necessary to make a determination about 2
the application. 3
3. Except as otherwise provided in subsection 4, the 4
[Department,] state pharmacy benefit mana ger [or health 5
maintenance organization, as applicable, that receives ] , upon 6
receiving an application for an exemption pursuant to subsection 1 , 7
shall: 8
(a) Make a determination concerning the application if the 9
application is complete, or request additi onal information or 10
documentation necessary to complete the application not later than 11
72 hours after receiving the application; and 12
(b) If [it] the state pharmacy benefit manager requests 13
additional information or documentation, make a determination 14
concerning the application not later than 72 hours after receiving the 15
requested information or documentation. 16
4. If, in the opinion of the attending practitioner, step therapy 17
may seriously jeopardize the life or health of the recipient, the 18
[Department,] state pharmacy benefit manager [or health 19
maintenance organization that receives an application for an 20
exemption pursuant to subsection 1, as applicable, ] must make a 21
determination concerning the application as expeditiously as 22
necessary to avoid serious jeopardy to the life or health of the 23
recipient. 24
5. The [Department,] state pharmacy benefit manager [or 25
health maintenance organization, as applicable, ] shall disclose to a 26
recipient or attending practitioner who submits an application for an 27
exemption from step therapy pursuant to subsection 1 the 28
qualifications of each person who will review the application. 29
6. The [Department,] state pharmacy benefit manager [or 30
health maintenance organization, as applicable, ] must grant an 31
exemption from step therapy in response to an application submitted 32
pursuant to subsection 1 if: 33
(a) Any treatment otherwise required under the step therapy or 34
any drug in the sam e pharmacological class or having the same 35
mechanism of action as the drug for which the exemption is 36
requested has not been effective at treating the cancer or symptom 37
of the recipient when prescribed in accordance with clinical 38
indications, clinical guidelines or other peer-reviewed evidence; 39
(b) Delay of effective treatment would have severe or 40
irreversible consequences for the recipient and the treatment 41
otherwise required under the step therapy is not reasonably expected 42
to be effective based on the p hysical or mental characteristics of the 43
recipient and the known characteristics of the treatment; 44
(c) Each treatment otherwise required under the step therapy: 45

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(1) Is contraindicated for the recipient or has caused or is 1
likely, based on peer-reviewed clinical evidence, to cause an adverse 2
reaction or other physical harm to the recipient; or 3
(2) Has prevented or is likely to prevent the recipient from 4
performing the responsibilities of his or her occupation or engaging 5
in activities of daily living, as defined in 42 C.F.R. § 441.505; or 6
(d) The condition of the recipient is stable while being treated 7
with the prescription drug for which the exemption is requested and 8
the recipient has previously received approval for coverage of that 9
drug. 10
7. If the [Department,] state pharmacy benefit manager [or 11
health maintenance organization, as applicable, ] approves an 12
application for an exemption from step therapy pursuant to this 13
section, the State must pay the nonfederal share of the cost of the 14
prescription drug to which the exemption applies. The 15
[Department,] state pharmacy benefit manager [or health 16
maintenance organization] may initially limit the coverage to a 1 -17
week supply of the drug for which the exemption is granted. If the 18
attending practitioner det ermines after 1 week that the drug is 19
effective at treating the cancer or symptom for which it was 20
prescribed, the State must continue to pay the nonfederal share of 21
the cost of the drug for as long as it is necessary to treat the recipient 22
for the cancer or symptom. The [Department,] state pharmacy 23
benefit manager [or health maintenance organization, as applicable,] 24
may conduct a review not more frequently than once each quarter to 25
determine, in accordance with available medical evidence, whether 26
the drug remains necessary to treat the recipient for the cancer or 27
symptom. The [Department,] state pharmacy benefit manager [or 28
health maintenance organization, as applicable, ] shall provide a 29
report of the review to the recipient. 30
8. The Department and [any] the state pharmacy benefit 31
manager [or health maintenance organization with which the 32
Department contracts pursuant to NRS 422.4053 to manage 33
prescription drug benefits] shall post in an easily accessible location 34
on an Internet website maintained by the D epartment [,] or state 35
pharmacy benefit manager , [or health maintenance organization,] as 36
applicable, a form for requesting an exemption pursuant to this 37
section. 38
9. As used in this section, “attending practitioner” means the 39
practitioner, as defined in NRS 639.0125, who has primary 40
responsibility for the treatment of the cancer or any symptom of 41
such cancer of a recipient. 42
Sec. 13. NRS 422.4053 is hereby amended to read as follows: 43
422.4053 1. [Except as otherwise provided in subsection 2, 44
the] The Department shall [directly] : 45

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(a) Evaluate applications received pursuant to section 4 of this 1
act and choose an applicant to serve as the state pharmacy benefit 2
manager; and 3
(b) Enter into a contract with the state pharmacy benefit 4
manager chosen pursuant to paragraph (a) to, except as otherwise 5
provided in subsection 2, manage, direct and coordinate all 6
payments and reb ates for prescription drugs and all other services 7
and payments relating to the provision of prescription drugs under 8
the State Plan for Medicaid , [and] the Children’s Health Insurance 9
Program [.] and the other health benefit plans described in 10
subsection 1 of NRS 422.4025. 11
2. The Department may enter into a contract with [: 12
(a) A pharmacy benefit manager for the provision of any 13
services described in subsection 1. 14
(b) A health maintenance organization pursuant to NRS 422.273 15
for the provision of any of the services described in subsection 1 for 16
recipients of Medicaid or recipients of insurance through the 17
Children’s Health Insurance Program who receive coverage through 18
a Medicaid managed care program. 19
(c) One] one or more public or private entities fr om this State, 20
the District of Columbia or other states or territories of the United 21
States for the collaborative purchasing of prescription drugs in 22
accordance with subsection 3 of NRS 277.110. 23
3. [A] The contract entered into pursuant to [paragraph (a) or 24
(b) of] subsection [2] 1 must: 25
(a) Include the provisions required by NRS 422.4056; 26
(b) Require the state pharmacy benefit manager [or health 27
maintenance organization, as applicable, ] to disclose to the 28
Department any information relating to the services covered by the 29
contract, including, without limitation, information concerning 30
dispensing fees, measures for the control of costs, rebates collected 31
and paid and any fees and charges i mposed by the state pharmacy 32
benefit manager [or health maintenance organization ] pursuant to 33
the contract; [and] 34
(c) Require the state pharmacy benefit manager [or health 35
maintenance organization ] to comply with the provisions of this 36
chapter regarding the provision of prescription drugs under the State 37
Plan for Medicaid and the Children’s Health Insurance Program to 38
the same extent as the Department [. 39
4. In addition to meeting the requirements of subsection 3, a 40
contract entered into pursuant to: 41
(a) Paragraph (a) of subsection 2 may require] ; 42
(d) Require the state pharmacy benefit manager to c omply 43
with all other applicable state and federal laws; 44

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(e) Require the state pharmacy benefit manager to negotiate 1
and enter into agreements to purchase the drugs included on the 2
list of preferred prescription drugs developed pursuant to NRS 3
422.4025, except where those drugs are purchased through a 4
contract pursuant to subsection 2; 5
(f) Prohibit the state pharmacy benefit manager from 6
discriminating with regard to participation in any network 7
established for the provision of benefits under the contract or 8
preferred status in such a network against any pharmacy or 9
pharmacist that is: 10
(1) Located within the geographic coverage area of the 11
network; and 12
(2) Willing to accept the reasonable terms and conditions of 13
the state pharmacy benefit manager for participation in the 14
network or preferred status, as applicable; 15
(g) Require the state pharmacy benefit manager to transmit 16
claims to any applicable Medicaid managed care organization or 17
to the Department, as applicable, within 48 hours after processing 18
the claim; 19
(h) Require the state pharmacy benefit m anager to provide the 20
entire amount of any rebates received for the purchase of 21
prescription drugs, including, without limitation, rebates for the 22
purchase of prescription drugs by an entity other than the 23
Department, to the Department [. 24
(b) Paragraph (b ) of subsection 2 must require the health 25
maintenance organization to provide to the Department the entire 26
amount of any rebates received for the purchase of prescription 27
drugs, including, without limitation, rebates for the purchase of 28
prescription drugs by an entity other than the Department, less an 29
administrative fee in an amount prescribed by the contract. The 30
Department shall adopt policies prescribing the maximum amount 31
of such an administrative fee.] ; and 32
(i) Establish a fiduciary duty between the Department and the 33
state pharmacy benefit manager. 34
4. In addition to meeting the requirements of subsection 2, a 35
contract entered into pursuant to subsection 1 must prohibit the 36
state pharmacy benefit manager from: 37
(a) Using spread pricing; 38
(b) Directly or indirectly reducing payment for services 39
provided by a pharmacy or pharmacist under a reconciliation 40
process to an effective rate of reimbursement, including, without 41
limitation, creating, imposing or establ ishing direct or indirect 42
remuneration fees, generic effective rates, dispensing effective 43
rates, brand effective rates, any other effective rates, in -network 44
fees, performance fees, pre -adjudication fees, post -adjudication 45

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fees or any other mechanism that reduces or aggregately reduces 1
payments for services provided by a pharmacy or pharmacist; 2
(c) Creating, modifying, implementing or indirectly 3
establishing any fee to be imposed upon a pharmacy, a pharmacist 4
or a recipient of benefits under the contract without first seeking 5
and obtaining written approval from the Department; 6
(d) Requiring a recipient of benefits under the contract to 7
obtain a specialty drug from a specialty pharmacy owned by or 8
otherwise associated with the state pharmacy benefit manager; 9
(e) Requiring or incentivizing a recipient of benefits under the 10
contract to use a specific pharmacy; and 11
(f) Requiring a recipient of benefits under the contract to use a 12
mail order pharmaceutical distributor or mail order pharmacy. 13
5. As used in this section, “spread pricing” means any 14
technique by which a pharmacy benefit manager charges or 15
claims an amount from an insurer for drugs or services provided 16
by a pharmacy or pharmacist that is different from the amount the 17
pharmacy benefit manager pay s the pharmacy or pharmacist, as 18
applicable, for those drugs or services. 19
Sec. 14. NRS 422.4056 is hereby amended to read as follows: 20
422.4056 1. [Any] The contract between the Department and 21
[a] the state pharmacy benefit manager [or health maintenance 22
organization entered into pursuant to NRS 422.4053 ] must require 23
the state pharmacy benefit manager [or health maintenance 24
organization, as applicable,] to: 25
(a) Submit to and cooperate with an annual audit b y the 26
Department to evaluate the compliance of the state pharmacy 27
benefit manager [or health maintenance organization ] with the 28
agreement and generally accepted accounting and business 29
practices. The audit must analyze all claims processed by the state 30
pharmacy benefit manager [or health maintenance organization ] 31
pursuant to the agreement. 32
(b) Obtain from an independent accountant, at the expense of the 33
state pharmacy benefit manager , [or health maintenance 34
organization, as applicable, ] an annual audit of internal controls to 35
ensure the integrity of financial transactions and claims processing. 36
2. The Department shall post the results of any audit conducted 37
pursuant to paragraph (a) of subsection 1 on an Internet website 38
maintained by the Department. 39
Sec. 15. NRS 683A.1785 is hereby amended to read as 40
follows: 41
683A.1785 1. A pharmacy benefit manager shall not: 42
(a) Discriminate against a covered entity, a contract pharmacy or 43
a 340B drug in the amount of reimbursement for any item or service 44
or the procedures for obtaining such reimbursement; 45

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(b) Assess any fee, chargeback, clawback or adjustment against 1
a covered entity or contract pharmacy on the basis that the covered 2
entity or contract pharmacy dispenses a 340B dru g or otherwise 3
limit the ability of a covered entity or contract pharmacy to receive 4
the full benefit of purchasing the 340B drug at or below the ceiling 5
price, as calculated pursuant to 42 U.S.C. § 256b(a)(1); 6
(c) Exclude a covered entity or contract pha rmacy from any 7
network because the covered entity or contract pharmacy dispenses 8
a 340B drug; 9
(d) Restrict the ability of a person to receive a 340B drug, 10
including, without limitation, by imposing a copayment, 11
coinsurance, deductible or other cost -sharing obligation on the drug 12
that is different from a similar drug on the basis that the drug is a 13
340B drug; 14
(e) Restrict the methods by which a covered entity or contract 15
pharmacy may dispense or deliver a 340B drug or the entity through 16
which a covered en tity may dispense or deliver such a drug in a 17
manner that does not apply to drugs that are not 340B drugs; or 18
(f) Prohibit a covered entity or contract pharmacy from 19
purchasing a 340B drug or interfere with the ability of a covered 20
entity or contract pharmacy to purchase a 340B drug. 21
2. This section does not: 22
(a) Apply to [a] the state pharmacy benefit manager [that has 23
entered into a contract with the Department of Health and Human 24
Services pursuant to NRS 422.4053 ] when the state pharmacy 25
benefit manager is managing prescription drug benefits under 26
Medicaid, including, without limitation, where such benefits are 27
delivered through a Medicaid managed care organization. 28
(b) Prohibit the Department of Health and Human Services, the 29
Division of Health Care Financing and Policy of the Department of 30
Health and Human Services or a Medicaid managed care 31
organization from taking such actions as are necessary to: 32
(1) Prevent duplicate discounts or rebates where prohibited 33
by 42 U.S.C. § 256b(a)(5)(A); or 34
(2) Ensure the financial stability of the Medicaid program, 35
including, without limitation, by including or enforcing provisions 36
in [any] the contract with [a] the state pharmacy benefit manager . 37
[entered into pursuant to NRS 422.4053.] 38
3. As used in this section: 39
(a) “340B drug” means a prescription drug that is purchased by 40
a covered entity under the 340B Program. 41
(b) “340B Program” means the drug pricing program established 42
by the United States Secretary of Health and Human Services 43
pursuant to s ection 340B of the Public Health Service Act, 42 44
U.S.C. § 256b, as amended. 45

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(c) “Contract pharmacy” means a pharmacy that enters into a 1
contract with a covered entity to dispense 340B drugs and provide 2
related pharmacy services to the patients of the covered entity. 3
(d) “Covered entity” has the meaning ascribed to it in 42 U.S.C. 4
§ 256b(a)(4). 5
(e) “Medicaid managed care organization” has the meaning 6
ascribed to it in 42 U.S.C. § 1396b(m). 7
(f) “Network” means a defined set of providers of health care 8
who are under contract with a pharmacy benefit manager or third 9
party to provide health care services to covered persons. 10
(g) “State pharmacy benefit manager” has the meaning 11
ascribed to it in section 3 of this act. 12
Sec. 16. 1. The amendatory provisions of this act do not 13
affect any contract between the Department of Health and Human 14
Services and a pharmacy benefit manager or health maintenance 15
organization entered into pursuant to NRS 422.4053 before 16
January 1, 2026. The state pharmacy benefit manager shall assume 17
the responsibilities previously carried out by the pharmacy benefit 18
manager or health maintenance organization, as applicable, upon the 19
expiration of the current term of any such contract. 20
2. As used in this section: 21
(a) “Health maintenance organization” has the meaning ascribed 22
to it in NRS 695C.030. 23
(b) “Pharmacy benefit manager” h as the meaning ascribed to it 24
in NRS 683A.174. 25
(c) “State pharmacy benefit manager” has the meaning ascribed 26
to it in section 3 of this act. 27
Sec. 17. The provisions of NRS 218D.380 do not apply to any 28
provision of this act which adds or revises a requirement to submit a 29
report to the Legislature. 30
Sec. 18. 1. This section becomes effective on passage and 31
approval. 32
2. Sections 1 to 17, inclusive, of this act become effective: 33
(a) Upon passage and approval for the purpose of adopting any 34
regulations and performing any other preparatory administrative 35
tasks that are necessary to carry out the provisions of this act. 36
(b) On January 1, 2026, for all other purposes. 37

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