An Act to Protect Against Unfair Prescription Drug Practices LR 1315(02)
Maine Legislature, Session 121, LD 0554
Committee Amendment CA_A_S204 (Senate)

COMMITTEE AMENDMENT "4.,, to s. P. 194, 
L .D. 554, Bill, 
Act To Protect Against Unfair Prescription Drug Practices" 
"An 
Amend the bill by striking out everything after the enacting 
clause and before the summary and inserting in its place the 
following: 
, Sec. 1. 22 MRSA c. 603, sub-c. 4 is enacted to read: 
SUBCHAPTER 4 
PRESCRIPTION DRUG PRACTICES 
§2699. 
Prescription drug practices 
Pharmacy benefits managers shall and contracts for pharmacy 
benefits management must comply with the requirements of this 
section. 
1. 
Definitions. 
As 
used 
in this 
chapter, 
unless 
the 
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following meanings. 
A. 
"Covered entity" means a nonprofit hospital or medical 
service 
organization, 
insurer, 
health 
coverage 
plan 
or 
health maintenance organization licensed pursuant to Title 
or 24-A; a health program administered by the department 
or the State in the capacity of provider of health coverage; 
or 
an 
employer, 
labor 
union or other 
group of 
persons 
Page I-LR1315(2) 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT "A" to S.P. 194, L.D. 554 
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 
~nJury, 
specified 
disease, hospital indemnity, Medicare supplement. disability 
income, 
long-term 
care 
or 
other 
limited benefit health 
insurance policies and contracts. 
B. 
"Covered 
indi vidual" 
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. 
C. 
"Generic drug" means a chemically egui valent copy of a 
brand-name drug with an expired patent. 
D. 
"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 Code of Federal Regulations, 270.20 (1999). 
E. 
"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: 
(1) 
Mail service pharmacy; 
(2) 
Claims processing, retail network management and 
payment of claims to pharmacies for prescription drugs 
dispensed to covered individuals; 
(3) 
Clinical 
formulary 
development 
and 
management 
services; 
(4) 
Rebate contracting and administration; 
(5) 
Certain 
patient 
compliance, 
therapeutic 
intervention and generic Substitution programs; and 
(6) 
Disease management programs. 
F. 
"Pharmacy 
benefits 
manager" 
means 
an 
entity 
that 
performs pharmacy benefits management. 
"Pharmacy benefits 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT "A" to S.P. 194, L.D. 554 
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 pharmacy. 
2. Required practices. 
A pharmacy benefits manager owes a 
fiduciary duty to a covered entity and shall discharge that duty 
in accordance with the provisions of state and federal law. 
A. 
A pharmacy benefits manager shall perform its duties 
with care, skilL prudence and diligence and in accordance 
with the standards of conduct applicable to a fiduciary in 
an enterprise of a like character and with like aims. 
B. 
A pharmacy benefits manager shall discharge its duties 
wi th respect to the covered entity for the pr imary purpose 
of providing benefits to covered individuals and defraying 
reasonable expenses of administering health plans. 
C. 
A pharmacy benefits manager shall notify the 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 sUbsection. 
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 paragraph may 
designate 
that material as confidential. 
Information designated as 
confidential by a pharmacy benefits manager and provided to 
a covered entity under this paragraph may not be disclosed 
by the covered entity to any person without the consent of 
the pharmacy benefits manager, except that disclosure may be 
made 
in 
a 
court 
filing 
under 
the 
Maine 
Unfair 
Trade 
Practices Act or when authorized by that Act or ordered by a 
court of this State for good cause shown. 
E. 
With 
regard 
to 
prescription 
drug 
for 
individual the following 
the 
dispensation 
of 
a 
prescribed 
drug 
provisions apply. 
a 
substitute 
to 
a 
covered 
(1) 
The pharmacy benefits manager may substitute a 
lower-priced 
generic 
and 
therapeutically 
equivalent 
drug for a higher-priced prescribed drug. 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT .. A .. to S.P. 194, L.D. 554 
(2) 
With 
regard 
to 
substitutions 
in 
which 
the 
substitute drug costs more than the prescribed drug, 
the substitution must be made for medical reasons that 
benefit the covered individual 
and must benefit the 
covered entity. 
If a substitution is being made under 
this subparagraph, the pharmacy benefits manager shall 
obtain 
the 
approval 
of 
the 
prescribing 
health 
professional or that person's authorized representative 
after disclosing to 
the 
covered individual 
and 
the 
covered entity the cost of both drugs and any benefit 
or 
payment 
directly or 
indirectly accruing 
to 
the 
pharmacy 
benefits 
manager 
as 
a 
result 
of 
the 
substitution. 
(3) 
The pharmacy benefits manager shall transfer in 
full 
to the 
covered entity any benefit or payment 
received in any form by the pharmacy benefits manager 
as a result of a prescription drug substitution under 
subparagraph (1) or (2). 
F. 
A pharmacy benefits manager that derives any payment or 
benef i t 
for the dispensation of prescr iption drugs wi thin 
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. 
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. without limitation. formulary management 
and 
drug-switch 
programs. 
educational 
support, 
claims 
processing and pharmacy network fees that are charged from 
retail pharmacies and data sales fees. 
3. 
Compliance. 
Compliance with the requirements of this 
section is 
required in all contracts 
for 
pharmacy benefits 
management entered into in this State or by a covered entity in 
this State. 
4. 
Enforcement. 
A violation of this section is a violation 
of the Maine Unfair Trade Practices Act. for which a fine of not 
more than $10.000 may be adjudged.' 
SUMMARY 
This amendment is the majority report of the committee. 
It 
makes the following changes in the bill. 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT "A" to S.P. 194, L.D. 554 
1. 
It removes references to the Employee Retirement Income 
Security Act of 1974. 
2. 
It removes the requirement that payments to the pharmacy 
benefits manager based on volume of sales be passed on to the 
covered individual 
and retains the 
requirement that they be 
passed on to covered entities. 
3. 
It 
clarifies 
the 
procedural 
requirements 
for 
substituting a different drug for a prescribed drug. 
4. 
It 
removes 
the 
fiduciary 
relationship 
between 
the 
pharmacy benefits manager and persons served by a covered entity. 
FISCAL NOTE REQUIRED 
(See attached) 
COMMITTEE AMENDMENT 
Approved: 04/20/03 ~ae 
Office of Fiscal and Program Review 
LD554 
An Act to Protect Against Unfair Prescription Drug Practices 
LR 1315(02) 
Fiscal Note for Bill as Amended by Committee Amendment ,t4,S-{)()~ 
Committee: Health and Human Services 
Fiscal Note Required: Yes 
Fiscal Note 
Minor cost increase - General Fund 
Minor revenue increase - General Fund 
Correctional and Judicial Impact Statements: 
Establishes a new violation of the Maine Unfair Trade Practices Act. 
Fiscal Detail and Notes 
Any additional costs to the office of the Attorney General can be absorbed utilizing existing budgeted resources. 
LR1315(2) - Fiscal Note - Page 1 of 1