Prescription drug practices.

WORKING DRAFT
2008
STATE OF
WYOMING
08LSO-0308

SENATE FILE
NO.
SF0078

Prescription drug practices
.

Sponsored by:
Senator(s) Mockler

A BILL

for

AN ACT relating to
prescription drug practices; creating a fiduciary duty for pharmacy benefit managers; requiring pharmacy benefit managers to pass on any benefits or payments received from drug manufacturers to covered individuals; providing for disclosure of financial information; providing penalties;
and providing for an effective date.

Be It Enacted by the Legislature of the State of
Wyoming
:

Section 1.
W.S. 26
‑
13
‑
301
and
26
‑
13
‑
30
2
are created to read:

ARTICLE 3
PRESCRIPTION DRUG PRACTICES

26
‑
13
‑
301.

Definitions.

(a)

As used in this article:

(i)

"Covered entity" means a nonprofit hospital or medical service organization, insurer, health coverage plan or health maintenance organization licensed under W.S. 26
‑
34
‑
104, a health program administered by the state in the capacity of provider of health coverage or an employer, labor union or other group of persons organized in the state that provides health coverage to covered individuals who are employed or reside in the state. "Covered entity" does not include a health plan that provides coverage only for accidental injury, specified disease, hospital indemnity, Medicare supplement, disability income or other long-term care;

(ii)

"Covered individual" means a member, participant, enrollee, contract holder or policy holder or beneficiary of a covered entity
who is provided health coverage by the covered entity. "Covered individual" includes a dependent or other person provided health coverage through a policy, contract or plan for a covered individual;

(iii)

"Generic drug" means a chemically equivalent copy of a brand-name drug with an expired patent;

(
i
v)

"Labeler" means an entity or person that receives prescription drugs from a
manufacturer
or wholesaler and repackages those drugs for later retail sale and that has a
labeler
code from the federal food and drug administration under 21 C.F.R.
§
270.20;

(v)

"Pharmacy benefits management" means the procurement of prescription drugs at a negotiated rate for dispensation within this state to covered individuals, the
administration
or management of prescription drug benefits provided by a covered entity for the benefit of covered individuals or any of the following services provided with regard to the
administration
of pharmacy benefits:

(A)

Mail service pharmacies;

(B)

Claims processing, retail network management and payment of claims to pharmacies for prescription drugs dispensed to covered individuals;

(C)

Clinical management formulary development and management services;

(D)

Patient compliance, therapeutic intervention and generic substitution programs;

(E)

Disease management programs
;

(F)

Rebate contracting and administration.

(vi)

"Pharmacy benefits manager" means an entity or person that performs pharmacy benefits management. "Pharmacy benefits manager" includes a person or entity acting for a pharmacy benefits manager in a contractual or employment relationship in the performance of pharmacy benefits management for a covered entity and includes mail service pharmacies
;

(vii)

"Therapeutically equivalent" means as provided in W.S. 33
‑
24
‑
147(a)(iv).

26
‑
13
‑
302.

Prescription drug practices; fiduciary duty.

(a)

A pharmacy benefits manager
shall perform
its duties with care, skill, prudence and diligence and in accordance with the standards or conduct applicable to a fiduciary in an enterprise of like character and with like aims.

(b)

A pharmacy benefits manager shall discharge it
s
duties with respect to the covered entity and covered individuals solely in the interests of the covered individuals and for the primary
purpose
of providing benefits to covered individuals and defraying reasonable expenses of administering health plans.

(c)

A pharmacy benefits manager shall notify a covered entity in writing of any activity, policy or practice of the pharmacy benefits manager that directly or indirectly presents any conflict of interest with the duties imposed by this section.

(d)

A pharmacy benefits manager shall provide to a covered entity all financial and
utilization
information requested by the covered entity relating to the provision of benefits to covered individuals through that covered entity and all financial and utilization information relating to services to that covered entity. A pharmacy benefits manager providing information under this subsection may designate these materials confidential. Information designated a
s
confidential by a pharmacy benefits manager and provided to a covered entity under this subsection shall not be disclosed to any person without the consent of the pharmacy benefits manager, except as otherwise provided by law.

(e)

The following shall apply to the pharmacy benefits manager requesting or requiring the dispensing
of a substitute prescription drug fo
r a
nother
prescribed drug to a covered individual shall only be as follows:

(i)

A pharmacy benefits manager may substitute a lower-priced
prescribed
drug for a higher-priced prescribed drug
. Regular generic substitution is governed by existing state of
Wyoming
board of pharmacy law
;

(ii)

A pharmacy benefits manager shall not substitute a higher-priced
prescribed
drug for a lower-priced prescribed drug
without authorization from the prescribing health professional
;

(iii)

Substitution of therapeutically equivalent drugs be authorized by the prescribing health professional;

(i
v
)

A pharmacy benefits manager shall
d
isclose the costs of both drugs to the covered individual
, or that person's authorized representative,
and the covered entity and any benefit or payment directly or indirectly accruing to the pharmacy benefits manager as a result of the substitution;

(v)

The pharmacy benefits manager shall transfer in full to the covered entity or covered individuals any benefit or payment received in any form by the pharmacy benefits manager as a result of the prescription drug substitution.

(f)

A pharmacy benefits manager that derives any payment or benefit for the dispensation of prescription drugs within the state based on volume of sales for certain prescription drugs or classes or brands of drugs within the state shall pass that payment or
benefit
on in full to the covered entity or covered individuals.

(g)

A pharmacy benefits manager shall disclose to the covered entity all financial terms and arrangements for remuneration of any kind that apply between the pharmacy benefits manager and any prescription drug manufacturer or labeler, including, with limitation, formulary management and drug-switch programs, education support, claims processing and pharmacy network fees that are charged from retail pharmacies and data sales fees.

(h)

A pharmacy benefits manager shall not in a contract with a covered entity or a prescription drug
manufacturer
or labeler accept or agree to an obligation that is inconsistent with the fiduciary duties imposed by this section
. Any agreement to waive the provisions of this section is against public policy and void.

(j)

The commissioner shall enforce the provisions of this article as provided in W.S. 26
‑
2
‑
130.

Section
2
.
Th
is act is effective July 1, 2008
.

(END)

1
SF0078