§ 26-52-104 — Maximum allowable cost; offering information and alternatives

(a) To place a drug on a maximum allowable cost list, a
pharmacy benefit manager shall ensure that the drug is:
(i) If the drug is a generically equivalent drug,
rated "A" or "B" in the most recent version of the United States
Food and Drug Administration's Approved Drug Products with
Therapeutic Equivalence Evaluations (Orange Book), or rated "NR"
or "NA," or has a similar rating, by a nationally recognized
reference;
(ii) Generally available for purchase by retail
pharmacies in the state from national or regional wholesalers;
(iii) Not obsolete or temporarily unavailable.
(b) In formulating the maximum allowable cost price for a
drug, an insurer or pharmacy benefit manager shall consider only
the price of that drug and any drug listed as therapeutically
equivalent to that drug in the most recent version of the United
States Food and Drug Administration's Approved Drug Products
with Therapeutic Equivalence Evaluations (Orange Book).
(c) Notwithstanding subsection (b) of this section, if a
therapeutically equivalent generic drug is unavailable or has
limited market presence, an insurer or pharmacy benefit manager
may place on a maximum allowable cost list a drug that has:
(i) A "B" rating in the most recent version of the
United States Food and Drug Administration's Approved Drug
Products with Therapeutic Equivalence Evaluations (Orange Book);
or
(ii) An "NR" or "NA" rating, or a similar rating, by
a nationally recognized reference.
(d) A pharmacy benefit manager shall:
(i) Make available to each network provider at the
beginning of the term of the network provider's contract, and
upon renewal of the contract, the sources utilized to determine
the maximum allowable cost pricing;
(ii) Provide a telephone number, email address and
website at which a network pharmacy or the pharmacy's designee
who holds a contract with the pharmacy benefit manager may
contact an employee of a pharmacy benefit manager to discuss the
pharmacy's appeal;
(iii) Provide a process for network providers to
readily access the maximum allowable cost applicable to that
provider;
(iv) Review and update applicable maximum allowable
cost price information at least once every seven (7) business
days to reflect any modification of maximum allowable cost
pricing; and
(v) Ensure that dispensing fees are not included in
the calculation of maximum allowable cost.
(e) A pharmacy benefit manager shall establish a process
by which a contracted pharmacy, or the pharmacy's designee who
holds a contract with the pharmacy benefit manager, can appeal
the provider's reimbursement for a drug subject to maximum
allowable cost pricing. A contracted pharmacy, or the pharmacy's
designee who holds a contract with the pharmacy benefit manager,
shall have up to ten (10) business days after dispensing a drug
subject to a maximum allowable cost in which to appeal the
amount of the maximum allowable cost. A pharmacy benefit manager
shall respond to the appeal within ten (10) business days after
the contracted pharmacy or the pharmacy's designee who holds a
contract with the pharmacy benefit manager makes the appeal.
(f) If a maximum allowable cost appeal is denied, the
pharmacy benefit manager shall provide to the appealing
pharmacy, or the pharmacy's designee who holds a contract with
the pharmacy benefit manager, the reason for the denial and the
national drug code number for the drug that is available for
purchase by similarly situated pharmacies in the state and the
names of national or regional wholesalers that have the product
available for purchase at a price that is at or below the
maximum allowable cost.
(g) If an appeal is upheld, the pharmacy benefit manager
shall make an adjustment to the applicable maximum allowable
cost no later than one (1) day after the date of the
determination and make the adjustment applicable to all
similarly situated network pharmacy providers, as determined by
the insurer or pharmacy benefit manager. The pharmacy benefit
manager shall allow the appealing pharmacy to reverse and rebill
the claim which was the subject of the appeal.
(h) This section shall apply to a contracted pharmacy, or
the pharmacy's designee who holds a contract with a pharmacy
benefit manager, entered into, renewed or extended on or after
July 1, 2016, and to contracts on and after July 1, 2017.
(j) A pharmacy benefit manager may not, by contract or
otherwise, prohibit or penalize a pharmacy or pharmacist for:
(i) Disclosing information to a covered individual
regarding any cost differential that the covered individual must
pay for a particular prescription under the individual's
prescription drug benefit or outside of the individual's
prescription drug benefit;
(ii) Offering to a covered individual a more
affordable alternative if one is available.
(k) A pharmacy benefit manager shall not prevent a network
pharmacy or the pharmacy's designee who holds a contract with
the pharmacy benefit manager from filing appeals in an
electronic batch format. The pharmacy benefit manager shall
respond in an electronic format to valid reimbursement appeals
filed in an electronic batch format. A batch appeal shall not be
considered a valid appeal unless all required information for
each claim in the batch is submitted electronically with the
correct, contractually required information and in the required
format. An appeal shall not be considered valid for purposes of
the ten (10) day response timeframe until all information is
received.
(m) A pharmacy or pharmacist may decline to provide
pharmacy services to a patient or pharmacy benefit manager if
the pharmacy or pharmacist is to be paid less than the pharmacy
acquisition cost for the pharmacy providing pharmacy services.