An Act To Protect Consumers from Unfair Practices Related to Pharmacy Benefits Management
Maine Legislature, Session 129, LD 1504
Committee: Health Coverage, Insurance and Financial Services
Sponsors: TEPLER, CLAXTON, GRATWICK, JACKSON, VITELLI, FOLEY
Amends: 22 MRSA §1711-E, 22 MRSA §8702, 24-A MRSA §601, 24-A MRSA §1913, 24-A MRSA §4317

Legislative Document
No. 1504
S.P. 466
In Senate, April 4, 2019
An Act To Protect Consumers from Unfair Practices Related to 
Pharmacy Benefits Management
Reference to the Committee on Health Coverage, Insurance and Financial Services 
suggested and ordered printed.
DAREK M. GRANT
Secretary of the Senate
Presented by Senator SANBORN, H. of Cumberland.
Cosponsored by Representative TEPLER of Topsham and
Senators: CLAXTON of Androscoggin, GRATWICK of Penobscot, President JACKSON of 
Aroostook, SANBORN, L. of Cumberland, VITELLI of Sagadahoc, Representative: FOLEY 
of Biddeford.
Be it enacted by the People of the State of Maine as follows:
Sec. 1.  22 MRSA §1711-E, sub-§1, ¶G, as amended by PL 2011, c. 443, §1, is 
further amended to read:
G.  "Pharmacy benefits manager" has the same meaning as in Title 24-A, section 
1913 4347, subsection 1, paragraph A 17.
Sec. 2.  22 MRSA §8702, sub-§8-B, as amended by PL 2011, c. 443, §3, is 
further amended to read:
8-B.  Pharmacy benefits manager.  "Pharmacy benefits manager" has the same 
meaning as in Title 24-A, section 1913 4347, subsection 1, paragraph A 17.
Sec. 3.  24-A MRSA §601, sub-§28, as enacted by PL 2009, c. 581, §3, is 
repealed.
Sec. 4.  24-A MRSA §601, sub-§28-A is enacted to read:
28-A.  Pharmacy benefits manager.  Pharmacy benefits manager licensing fees may 
not exceed:
A.  Original issuance fee, $100; and
B.  Renewal fee, $100.
Sec. 5.  24-A MRSA §1913, as repealed and replaced by PL 2011, c. 443, §4, is 
repealed.
Sec. 6.  24-A MRSA §4317, sub-§12, as enacted by PL 2015, c. 450, §1, is 
repealed.
Sec. 7.  24-A MRSA §4317, sub-§13, as enacted by PL 2017, c. 44, §1, is 
repealed.
Sec. 8.  24-A MRSA c. 56-C is enacted to read:
CHAPTER 56-C
HEALTH PLANS THAT PROVIDE PRESCRIPTION DRUG BENEFITS
§4347.  Definitions
As used in this chapter, unless the context otherwise indicates, the following terms 
have the following meanings.
1.  Average wholesale price.  "Average wholesale price" means the average 
wholesale price of a prescription drug as identified by a national drug pricing source 
selected by a health insurer.  The average wholesale price must be identified by the 
11-digit national drug code, as amended from time to time, for the prescription drug 
dispensed for the quantity dispensed.
2.  Brand-name drug.  "Brand-name drug" means a prescription drug marketed 
under a proprietary name or registered trademark name, including a biological product.
3.  Carrier.  "Carrier" has the same meaning as in section 4301-A, subsection 3.  
"Carrier" also includes the MaineCare program pursuant to Title 22, chapter 855 and the 
group health plan provided to state employees and other eligible persons pursuant to Title 
5, section 285.
4.  Compensation.  "Compensation" means any direct or indirect financial benefit, 
including, but not limited to, rebates, discounts, credits, fees, grants, charge-backs or 
other payments or benefits of any kind.
5.  Cost-sharing amount.  "Cost-sharing amount" means the amount paid by a 
covered person as required under the covered person's health plan for a prescription drug 
at the point of sale.
6.  Covered person.  "Covered person" means a policyholder, subscriber, enrollee or 
other individual participating in a health plan.  "Covered person" includes the authorized 
representative of a covered person.
7.  Dispensing fee.  "Dispensing fee" means the professional fee incurred at the point 
of sale or service that pays for pharmacy costs, in excess of ingredient cost, associated 
with ensuring that possession of the appropriate prescription drug is transferred to a 
covered person.
8.  Formulary.  "Formulary" means a list of prescription drugs covered by a health 
plan and any tier levels applicable to a prescription drug.
9.  Generic drug.  "Generic drug" means a prescription drug, whether identified by 
its chemical, proprietary or nonproprietary name, that is not a brand-name drug and is 
therapeutically equivalent to a brand-name drug in dosage, safety, strength, method of 
consumption, quality, performance and intended use.  "Generic drug" includes a 
biosimilar product.
10.  Health plan.  "Health plan" has the same meaning as in section 4301-A, 
subsection 7.
11.  Ingredient cost.  "Ingredient cost" means the actual amount paid to a pharmacy 
provider by a carrier or the carrier's pharmacy benefits manager for a prescription drug, 
not including the dispensing fee or cost-sharing amount.
12.  Mail order pharmacy.  "Mail order pharmacy" means a pharmacy whose 
primary business is to receive prescriptions by mail, by fax or through electronic 
submissions and to dispense medication to covered persons through the use of the United 
States mail or other common or contract carrier services and that provides any 
consultation with patients electronically rather than face to face.
13.  Maximum allowable cost.  "Maximum allowable cost" means the maximum 
amount a health insurer will pay for a generic drug or brand-name drug that has at least 
one generic alternative available.
14.  Network pharmacy.  "Network pharmacy" means a licensed retail pharmacy or 
other pharmacy provider that contracts with a pharmacy benefits manager.
15.  Pharmacy.  "Pharmacy" means an established location, either physical or 
electronic, that is licensed by the State and that has entered into a network pharmacy 
contract with a pharmacy benefits manager or carrier.
16.  Pharmacy and therapeutics committee.  "Pharmacy and therapeutics 
committee" means a committee, board or equivalent body established by a carrier to 
develop and maintain formularies.
17.  Pharmacy benefits manager.  "Pharmacy benefits manager" means a person, 
business or other entity that, pursuant to a contract or under an employment relationship 
with a carrier, a self-insurance plan or other 3rd-party payer, either directly or through an 
intermediary, manages the prescription drug coverage provided by the carrier, 
self-insurance plan or other 3rd-party payer, including, but not limited to, processing and 
paying claims for prescription drugs, performing drug utilization review, processing drug 
prior authorization requests, adjudicating appeals or grievances related to prescription 
drug coverage, contracting with network pharmacies and controlling the cost of covered 
prescription drugs.
18.  Pharmacy provider.  "Pharmacy provider" means a retail pharmacy, mail order 
pharmacy or licensed pharmacist.
19.  Retail pharmacy.  "Retail pharmacy" means a chain pharmacy, a supermarket 
pharmacy, a mass merchandiser pharmacy, an independent pharmacy or a network of 
independent pharmacies that is licensed as a pharmacy by this State and that dispenses 
medications to the public.
§4348.  Licensure of pharmacy benefits managers
Beginning January 1, 2020, a person may not act as a pharmacy benefits manager in 
this State without first obtaining a license from the superintendent in accordance with this 
section and paying the licensing fee required under section 601, subsection 28-A.
1.  Applicant information.  An applicant for licensure as a pharmacy benefits 
manager must file with the superintendent at least the following information:
A.  The name of the applicant;
B.  The address and telephone number of the applicant;
C.  The name and address of the applicant's agent for service of process in the State;
D.  The name and address of each person beneficially interested in the applicant; and
E.  The name and address of each person with management or control over the 
applicant.
2.  Qualification.  The superintendent may issue a pharmacy benefits manager 
license to an applicant only if the superintendent is satisfied that the applicant possesses 
the necessary organization, expertise and financial integrity to supply the services sought 
to be offered.
3.  Restrictions permitted.  The superintendent may issue a pharmacy benefits 
manager license subject to restrictions or limitations, including the type of services that 
may be supplied or the activities in which the pharmacy benefits manager may engage.
4.  Valid for 3 years.  A license issued pursuant to this section is valid for a period of 
years and must be renewed.
5.  Nontransferable.  A license issued pursuant to this section is not transferable.
6.  Suspension, revocation or probationary license.  The superintendent may 
suspend, revoke or place on probation a pharmacy benefits manager license under any of 
the following circumstances:
A.  The pharmacy benefits manager has engaged in fraudulent activity that constitutes 
a violation of state or federal law;
B.  The superintendent has received consumer complaints that justify an action under 
this subsection to protect the safety and interests of consumers;
C.  The pharmacy benefits manager fails to pay the original issuance or renewal fee 
for the license; or
D.  The pharmacy benefits manager fails to comply with a requirement set forth in 
this chapter.
7.  Penalty for failure to obtain license.  If a pharmacy benefits manager acts 
without obtaining a license pursuant to this section, the pharmacy benefits manager is 
subject to a fine of $5,000 per day for the period the pharmacy benefits manager is found 
to be in violation.
8.  Rules.  The superintendent may adopt routine technical rules pursuant to Title 5, 
chapter 375, subchapter 2-A to administer and enforce the requirements of this section.
9.  Enforcement.  The superintendent may enforce this section under sections 220 
and 223 and other provisions of this Title.
10.  Registration remains effective until January 1, 2020 or registration date.  
The registration of a pharmacy benefits manager issued during 2019 in accordance with 
former section 1913 remains valid until January 1, 2020 or the next yearly anniversary of 
the registration date, whichever is later.  Upon expiration of that registration, the 
pharmacy benefits manager shall obtain a license under this section in order to do 
business in this State.
§4349.  Oversight and contracting responsibilities
1.  Compliance.  A carrier is responsible for monitoring all activities carried out by 
the carrier, or all activities carried out on behalf of the carrier by a pharmacy benefits 
manager if the carrier contracts with a pharmacy benefits manager, related to a carrier's 
prescription drug benefits and for ensuring that all requirements of this chapter are met.
2.  Fiduciary duty.  A carrier that contracts with a pharmacy benefits manager to 
perform any activities related to the carrier's prescription drug benefits is responsible for 
ensuring that, under the contract, the pharmacy benefits manager acts as the carrier's 
agent and owes a fiduciary duty to the carrier in the pharmacy benefits manager's 
management of activities related to the carrier's prescription drug benefits.
3.  Contract requirements.  A carrier may not enter into a contract or agreement or 
allow a pharmacy benefits manager or any person acting on the carrier's behalf to enter 
into a contract or agreement that prohibits a pharmacy provider from:
A.  Providing a covered person with the option of paying the pharmacy provider's 
cash price for the purchase of a prescription drug and not filing a claim with the 
covered person's carrier if the cash price is less than the covered person's cost-sharing 
amount; or
B.  Providing information to a state or federal agency, law enforcement agency or the 
superintendent when such information is required by law.
4.  Excess payments at point of sale prohibited.  A carrier or pharmacy benefits 
manager may not require a covered person to make a payment at the point of sale for a 
covered prescription drug in an amount greater than the least of:
A.  The applicable copayment for the prescription drug;
B.  The amount a covered person would pay for the prescription drug if the covered 
person purchased the prescription drug without using a health plan or any other 
source of prescription drug benefits or discounts; and
C.  The amount the pharmacy will be reimbursed for the prescription drug from the 
pharmacy benefits manager or carrier.
5.  Adequate network.  A carrier shall provide a reasonably adequate retail 
pharmacy network for the provision of prescription drugs for its covered persons.  A mail 
order pharmacy may not be included in determining the adequacy of a retail pharmacy 
network.  The superintendent may adopt rules as necessary to carry out the purposes of 
this subsection.  Rules adopted pursuant to this subsection are routine technical rules as 
defined in Title 5, chapter 375, subchapter 2-A.
§4350.  Prescription drug pricing; maximum allowable cost
1.  Single maximum allowable cost list.  A carrier, or a pharmacy benefits manager 
under contract with a carrier, shall use a single maximum allowable cost list to establish 
the maximum amount to be paid by a health plan to a pharmacy provider for a generic 
drug or a brand-name drug that has at least one generic alternative available.  A carrier, or 
a pharmacy benefits manager under contract with a carrier, shall use the same maximum 
allowable cost list for each pharmacy provider.
2.  Listing of prescription drug.  A maximum allowable cost may be set for a 
prescription drug, or a prescription drug may be allowed to continue on a maximum 
allowable cost list, only if that prescription drug:
A.  Is rated as "A" or "B" in the most recent version of the United States Food and 
Drug Administration's "Approved Drug Products with Therapeutic Equivalence 
Evaluations," also known as "the Orange Book," or an equivalent rating from a 
successor publication, or is rated as "NR" or "NA" or a similar rating by a nationally 
recognized pricing reference; and
B.  Is not obsolete and is generally available for purchase in this State from a national 
or regional wholesale distributor by pharmacies having a contract with the pharmacy 
benefits manager.
3.  Changes to maximum allowable cost list.  A carrier, or a pharmacy benefits 
manager under contract with a carrier, shall establish a process for removing a 
prescription drug from a maximum allowable cost list or modifying a maximum 
allowable cost for a prescription drug in a timely manner to remain consistent with 
changes to such costs and the availability of the drug in the national marketplace.
4.  Disclosure.  With regard to a pharmacy with which the carrier, or the pharmacy 
benefits manager under contract with a carrier, has entered into a contract, a carrier, or a 
pharmacy benefits manager under contract with a carrier, shall:
A.  Upon request, disclose the sources used to establish the maximum allowable 
costs;
B.  Provide a process for a pharmacy to readily obtain the maximum allowable 
payment available to that pharmacy under a maximum allowable cost list; and
C.  At least once every 7 business days, review and update maximum allowable cost 
list information to reflect any modification of the maximum allowable payment 
available to a pharmacy under a maximum allowable cost list used by the carrier or 
the pharmacy benefits manager under contract with a carrier.
5.  Appeal procedure.  A carrier, or a pharmacy benefits manager under contract 
with a carrier, shall provide a reasonable administrative appeal procedure, including a 
right to appeal that is limited to 14 days following the initial claim, to allow pharmacies 
with which the carrier or pharmacy benefits manager has a contract to challenge 
maximum allowable costs for a specified drug.
6.  Resolution of appeals.  A carrier, or a pharmacy benefits manager under contract 
with a carrier, shall respond to, investigate and resolve an appeal under subsection 5 
within 14 days after the receipt of the appeal.  The carrier or pharmacy benefits manager 
shall respond to an appeal as follows:
A.  If the appeal is upheld, the carrier or pharmacy benefits manager shall make the 
appropriate adjustment in the maximum allowable cost and permit the challenging 
pharmacy or pharmacist to reverse and rebill the claim in question; or
B.  If the appeal is denied, the carrier or pharmacy benefits manager shall provide the 
challenging pharmacy or pharmacist the national drug code from national or regional 
wholesalers of a comparable prescription drug that may be purchased at or below the 
maximum allowable cost.
7.  Average wholesale price; use of a prescription drug not on maximum 
allowable cost list.  A carrier, or a pharmacy benefits manager under contract with a 
carrier, shall use the average wholesale price to establish the maximum payment for a 
brand-name drug for which a generic equivalent is not available or a prescription drug not 
included on a maximum allowable cost list.  In order to use the average wholesale price 
of a brand-name drug or prescription drug not included on a maximum allowable cost list, 
a carrier, or a pharmacy benefits manager under contract with a carrier, must use only one 
national drug pricing source during a calendar year, except that a carrier, or a pharmacy 
benefits manager under contract with a carrier, may use a different national drug pricing 
source if the original pricing source is no longer available.  A carrier, or a pharmacy 
benefits manager under contract with a carrier, shall use the same national drug pricing 
source for each pharmacy provider and identify on its publicly accessible website the 
name of the national drug pricing source used to determine the average wholesale price of 
a prescription drug not included on the maximum allowable cost list.
8.  Payment.  This subsection governs payments between a carrier or a carrier's 
pharmacy benefits manager and a pharmacy provider.
A.  The amount paid by a carrier or a carrier's pharmacy benefits manager to a 
pharmacy provider under contract with the carrier or the carrier's pharmacy benefits 
manager for dispensing a prescription drug must be the ingredient cost plus the 
dispensing fee less any cost-sharing amount paid by a covered person.
B.  The ingredient cost may not exceed the maximum allowable cost or average 
wholesale price, as applicable, and must be disclosed by the carrier's pharmacy 
benefits manager to the carrier.
C.  Only the pharmacy provider that dispensed the prescription drug may retain the 
payment described in this subsection.
D.  A pharmacy provider may not be denied payment or be subject to a reduced 
payment retroactively unless the original claim was submitted fraudulently or in 
error.
§4350-A.  Responsibility to use compensation for benefit of covered persons
1.  Compensation used to lower premiums.  All compensation remitted by or on 
behalf of a pharmaceutical manufacturer, developer or labeler, directly or indirectly, to a 
carrier, or to a pharmacy benefits manager under contract with a carrier, related to its 
prescription drug benefits must be remitted to, and retained by, the carrier and must be 
used by the carrier to lower the premium for covered persons.
2.  Compliance.  Beginning March 1, 2021 and annually thereafter, a carrier shall file 
with the superintendent a report in the manner and form determined by the superintendent 
demonstrating how the carrier has complied with this section.
§4350-B.  Prescription drug formularies; pharmacy and therapeutics committee
1.  Pharmacy and therapeutics committee; use of formulary.  A carrier, or a 
pharmacy benefits manager under contract with a carrier, shall establish a pharmacy and 
therapeutics committee.  A carrier shall require its pharmacy and therapeutics committee 
or the pharmacy and therapeutics committee of the carrier's pharmacy benefits manager to 
use one or more formularies.
2.  Pharmacy and therapeutics committee; no conflict of interest for members.  
A carrier, or a pharmacy benefits manager under contract with a carrier, may not allow a 
person with a conflict of interest to be a member of its pharmacy and therapeutics 
committee.  A person may not serve as a member of a pharmacy and therapeutics 
committee if the person:
A.  Is employed, or was employed within the preceding year, by a pharmaceutical 
manufacturer, developer, labeler, wholesaler or distributor; or
B.  Receives compensation, or received compensation within the preceding year, 
from a pharmaceutical manufacturer, developer, labeler, wholesaler or distributor.
3.  Compensation prohibited.  A carrier, or a pharmacy benefits manager under 
contract with a carrier, shall prohibit its pharmacy and therapeutics committee or any 
member of the committee from receiving any compensation from a pharmaceutical 
manufacturer, developer, labeler, wholesaler or distributor.
4.  Accessibility of formulary.  A carrier shall display any applicable formulary used 
for the carrier's health plan and the prescription drug benefit levels applicable to covered 
persons under that health plan on the carrier's publicly accessible website.  The formulary 
and benefit levels must be electronically searchable by drug name and by any other 
means as required by the superintendent.  The formulary and benefit levels available to a 
covered person must provide, for each drug on the formulary:
A.  An indication of whether the drug is preferred under the carrier's health plan;
B.  An indication of whether the drug requires prior authorization or has step therapy 
or quantity limit restrictions;
C.  The specific tier the drug falls under, if the carrier's health plan uses a tiered 
formulary;
D.  The applicability of any covered person's cost-sharing amount; and
E.  Whether the drug is subject to a deductible and, if so, the deductible amount.
§4350-C.  Access to records; audits
1.  Requirements; record keeping.  A carrier shall maintain and have the ability to 
access all data related to the administration and provision of prescription drug benefits 
under a health plan of a carrier, including, but not limited to:
A.  The names, addresses, member identification numbers, protected health 
information and other personal information of covered persons; and
B.  All contracts, documentation and records, including transaction and pricing data, 
related to the dispensing of prescription drugs to covered persons under the health 
plan.
2.  Compliance with federal law.  A sale or transaction involving the transfer of any 
records, information or data described in subsection 1 must comply with the federal 
Health Insurance Portability and Accountability Act of 1996, Public Law 104-191 and the 
federal Health Information Technology for Economic and Clinical Health Act, Public 
Law 111-5 and any regulations adopted pursuant to those laws.
3.  Audit records.  A carrier may audit all transaction records related to the 
dispensing of prescription drugs to covered persons under a health plan of the carrier.  A 
carrier may conduct audits at a location of its choosing and with an auditor of its 
choosing.
4.  Maintenance of records.  A carrier shall maintain all records, information and 
data described in subsection 1 and all audit records described in subsection 3 for a period 
of no less than 5 years.
5.  Authority of superintendent.  Upon request, a carrier shall provide to the 
superintendent any records, contracts, documents or data held by the carrier or the 
carrier's pharmacy benefits manager for inspection, examination or audit purposes.
§4350-D.  Treatment of pharmacy benefits manager compensation
1.  Definitions.  As used in this section, unless the context otherwise indicates, the 
following terms have the following meanings.
A.  "Anticipated loss ratio" means the ratio of the present value of the future benefits 
payments to the present value of the future premiums of a policy form over the entire 
period for which rates are computed to provide health insurance coverage.
B.  "Pharmacy benefits manager compensation" means the difference between:
(1)  The value of payments made by a carrier of a health plan to its pharmacy 
benefits manager; and
(2)  The value of payments made by the pharmacy benefits manager to 
dispensing pharmacists for the provision of prescription drugs or pharmacy 
services with regard to pharmacy benefits covered by the health plan.
2.  Pharmacy benefits manager compensation included as administrative cost.  If 
a carrier uses a pharmacy benefits manager to administer or manage prescription drug 
benefits provided for the benefit of covered persons, for purposes of calculating a carrier's 
anticipated loss ratio, any pharmacy benefits manager compensation:
A.  Constitutes an administrative cost incurred by the carrier in connection with a 
health plan; and
B.  May not constitute a benefit provided under a health plan.
A carrier may claim only the amounts paid by the pharmacy benefits manager to a 
pharmacy or pharmacist as an incurred claim.
3.  Calculation of pharmacy benefits manager compensation.  Each rate filing 
submitted by a carrier with respect to a health plan that provides coverage for prescription 
drugs or pharmacy services that is administered or managed by a pharmacy benefits 
manager must include:
A.  A memorandum prepared by a qualified actuary describing the calculation of the 
pharmacy benefits manager compensation; and
B.  Such records and supporting information as the superintendent reasonably 
determines is necessary to confirm the calculation of the pharmacy benefits manager 
compensation.
4.  Records.  Upon request, a carrier shall provide any records to the superintendent  
that relate to the calculation of the pharmacy benefits manager compensation.
§4350-E.  Effective date
This chapter takes effect January 1, 2020.
Sec. 9.  Effective date.  This Act takes effect January 1, 2020.
SUMMARY
This bill replaces the current registration requirement for pharmacy benefits 
managers doing business in this State with a licensing requirement beginning January 1, 
2020.  The bill imposes the following requirements on a carrier that provides prescription 
drug benefits.
1.  It makes a carrier responsible for monitoring all activities carried out by the 
carrier, or all activities carried out on behalf of the carrier by a pharmacy benefits 
manager, related to a carrier's prescription drug benefits and for ensuring that all 
requirements of the law are met.
2.  If a carrier contracts with a pharmacy benefits manager to perform any activities 
related to the carrier's prescription drug benefits, it makes the carrier responsible for 
ensuring that the pharmacy benefits manager acts as the carrier's agent and owes a 
fiduciary duty to the carrier.
3.  It prohibits a carrier from entering into a contract or agreement or allowing a 
pharmacy benefits manager or any person acting on the carrier's behalf to enter into a 
contract or agreement that prohibits a pharmacy provider from providing a consumer with 
the option of paying the cash price for the purchase of a prescription drug and not filing a 
claim with the consumer's carrier if the cash price is less than the covered person's cost-
sharing amount or providing information to a state or federal agency, law enforcement 
agency or the Superintendent of Insurance when such information is required by law.
4.  It prohibits a carrier or pharmacy benefits manager from requiring a consumer to 
make an excessive payment at the point of sale for a covered prescription drug.
5.  It requires a carrier to provide a reasonably adequate retail pharmacy network and 
specifies that a mail order pharmacy may not be included in determining the adequacy of 
a retail pharmacy network.
6.  It replaces and updates current law related to the use of a maximum allowable cost 
list by a carrier or pharmacy benefits manager under contract with a carrier. It also 
clarifies how a carrier or pharmacy benefits manager may determine the average 
wholesale price of a brand-name drug or generic drug not included on the maximum 
allowable cost list.
7.  It specifies how to calculate the amount paid by a carrier or a carrier's pharmacy 
benefits manager to a pharmacy provider under contract with the carrier or the carrier's 
pharmacy benefits manager for dispensing a prescription drug.
8.  It requires that all compensation remitted by or on behalf of a pharmaceutical 
manufacturer, developer or labeler, directly or indirectly, to a carrier or to a pharmacy 
benefits manager related to its prescription drug benefits must be remitted to, and retained 
by, the carrier and used to lower the premium for covered persons.  The bill requires a 
carrier to file annual reports beginning March 1, 2021 demonstrating how the carrier has 
complied with this requirement.
9.  It requires a carrier to use a prescription drug formulary and specifies certain 
requirements for accessibility and disclosure of the formulary to covered persons.  The 
bill also prohibits a carrier from allowing a person to be a member of its pharmacy and 
therapeutics committee if the member has a conflict of interest because of a relationship 
with, or compensation from, a pharmaceutical manufacturer, developer, labeler, 
wholesaler or distributor.
10.  It requires a carrier to maintain certain records related to the administration and 
provision of prescription drug benefits under a health plan and authorizes the carrier to 
audit those activities.  The bill also authorizes the superintendent to have access to 
records upon request.
11.  If a carrier uses a pharmacy benefits manager to administer or manage 
prescription drug benefits provided for the benefit of covered persons, it provides that any 
pharmacy benefits manager compensation constitutes an administrative cost incurred by a 
carrier for purposes of calculating the anticipated loss ratio.  "Pharmacy benefits manager 
compensation" is defined in the bill as the difference between the value of payments 
made by a carrier of a health plan to its pharmacy benefits manager and the value of 
payments made by the pharmacy benefits manager to dispensing pharmacists for the 
provision of prescription drugs or pharmacy services with regard to pharmacy benefits 
covered by the health plan.
12.  It provides that the provisions in the bill take effect January 1, 2020.