View Amendment Current Amendment: 4 to Bill 359

Rep. SANDIFER proposes the following Amendment No. 4 to S. 359 (COUNCIL\CZ\359C005.JN.CZ19):

Reference is to Printer's Date 5/2/19-H.

Amend the bill, as and if amended, SECTION 1, page 9, line 7, by adding sections at the end to read:

/"Section 38 -71-2270.(A) Beginning June 1, 2020, and annually thereafter, a licensed pharmacy benefits manager must submit a transparency report containing data from the prior calendar year to the Department of Insurance. The transparency report must contain the:

(1) aggregate amount of all rebates received from all pharmaceutical manufacturers for all health care insurer clients and for each health care insurer client individually;

(2) aggregate administrative fees received from all manufacturers for all health care insurer clients and for each care insurer client individually;

(3) aggregate retained rebates received from all pharmaceutical manufacturers that did not pass through to health care insurers;

(4) aggregate retained rebate percentage; and

(5) highest, lowest, and mean aggregate retained rebate percentage for all health care insurer clients and each client individually.

(B) A pharmacy benefits manager submitting information to the department may designate the information as a trade secret. However, disclosure may be ordered by a court of appropriate jurisdiction for good cause shown or made in a court filing.

(C) Within sixty days of receipt of the report, the department must publish the transparency report of each pharmacy benefits manager on the agency 's website in a way that does not release any proprietary and trade secret information.

(D) The department may impose a civil penalty of not more than one thousand dollars per day per violation of this Section.

Section 38-71-2280. (A)(1) The Director of the Department of Insurance may review and approve the compensation program of a pharmacy benefits manager with a health benefit plan to ensure that the reimbursement for pharmacist services paid to a pharmacist or pharmacy is fair and reasonable to provide an adequate pharmacy benefits manager network for a health benefit plan under the standards adopted by the Department of Insurance.

(2) All information and data acquired is considered proprietary and confidential and not subject to the provisions of South Carolina Freedom of Information Act.

Section 38-71-2290. (A) The Director of the Department of Insurance may adopt rules regulating pharmacy benefits managers that are not inconsistent with this Act.

(B) Rules that the Director may adopt under this Act include without limitation rules relating to:

(1) Licensing;

(2) Application fees;

(3) Financial solvency requirements;

(4) Pharmacy benefits manager network adequacy;

(5) Prohibited market conduct practices;

(6) Data reporting requirements under State price-gouging laws

(7) Compliance and enforcement requirements under State laws concerning Maximum Allowable Cost Lists;

(8) Rebates;

(9) Prohibitions and limitations on the corporate practice of medicine (CPOM);

(10) Compensation; and

(11) Lists of health benefit plans administered by a pharmacy benefits manager in this State.

(C) Rules adopted under this Act shall set penalties or fines, including without limitation monetary fines, suspension of licensure, and revocation of licensure for violations of this Act and rules adopted under this Act." /

Amend the bill further, SECTION 1, Section 38-71-2230, by adding an appropriately lettered subsection at the end to read:

/"( )(1) A pharmacy benefits manager:

(a) owes a fiduciary duty to a health car e insurer client and must discharge that duty in accordance with the provisions of applicable state and federal law;

(b) must perform its duties with care, skill, prudence, diligence, and professionalism; and

(c) must notify a health car e insurer client in writing of any activity, policy, or practice of the pharmacy benefits manager that directly or indirectly presents a conflict of interest with the duties imposed pursuant to this section.

(2) A health care insurer or pharmacy benefits manager is prohibited from penalizing, requiring, or providing financial incentives including variations in premiums, deductibles, copayments, or coinsurance to covered persons as incentives to use a specific retail pharmacy, mail order pharmacy, or other network pharmacy provider in which a pharmacy benefits manager has an ownership interest or that has an interest in a pharmacy benefits manager." /