HB65 SD2.DOC

SECTION 1. The legislature finds that many pharmacy benefit managers and other prescription drug benefit plan providers impose certain requirements, including the requirement for beneficiaries to purchase prescription drugs from a mail order pharmacy. This requirement can cause an inconvenience for a beneficiary who needs to purchase prescription drugs and may even prevent the beneficiary from promptly obtaining urgently needed prescription drugs, by requiring the beneficiary to wait for mail order delivery. The legislature finds that the beneficiary should have the choice to purchase prescription drugs from a mail order pharmacy or a local retail pharmacy.

The purpose of this Act is to:

(1) Allow beneficiaries of prescription drug benefit plans to opt out of the requirement to purchase prescription drugs from a mail order pharmacy and, as an alternative, choose to purchase prescription drugs from a retail pharmacy within the pharmacy benefit manager's retail pharmacy network;

(2) Prohibit a pharmacy benefit manager from restricting a beneficiary's choice of pharmacy from which to purchase prescription drugs if the pharmacy is within the pharmacy benefit manager's retail pharmacy network; and

(3) Require affected entities to submit a report to the legislature no later than twenty days prior to the convening of the regular session of 2018.

SECTION 2. The Hawaii Revised Statutes is amended by adding a new chapter to be appropriately designated and to read as follows:

"Chapter

PRescription drug benefits

§ -1 Definitions. As used in this chapter, unless the context indicates otherwise:

"Beneficiary of a prescription drug benefit plan" means a person who is a member, subscriber, enrollee, or dependent of a member, subscriber, or enrollee of or otherwise covered under a prescription drug benefit plan.

"Pharmacy benefit manager" means any person, business, or entity that performs pharmacy benefit management, including but not limited to a person or entity under contract with a pharmacy benefit manager to perform pharmacy benefit management on behalf of a managed care company, nonprofit hospital or medical service organization, insurance company, third-party payor, or health program administered by the State.

"Pharmacy benefit manager's retail pharmacy network" means a retail pharmacy located within the State and contracted by the pharmacy benefit manager to sell prescription drugs to beneficiaries of a prescription drug benefit plan administered by the manager.

"Prescription drug benefit plan" means an accident and sickness insurance plan or health benefits plan that includes coverage for prescription drugs. For the purposes of this definition, a "health benefits plan" has the same meaning as in section 87A-1.

"Prescription drugs benefit plan provider" means a person who provides prescription drug coverage as part of an accident and health or sickness insurance contract or other type of health insurance or benefits plan that is offered by the person and is subject to regulation under article 10A of chapter 431, chapter 432, or chapter 432D.

§ -2 Prescription drugs; mail order opt out option. (a) A beneficiary of any prescription drug benefit plan within the State may opt out of a plan requirement to purchase prescription drugs by mail order and, as an alternative, choose to purchase prescriptions drugs from a pharmacy in accordance with subsection (b).

(b) If a beneficiary of a prescription drug benefit plan chooses not to purchase prescription drugs by mail order, the pharmacy benefit manager for the plan shall not restrict the beneficiary from purchasing the prescription drugs from any pharmacy of the beneficiary's choice within the manager's retail pharmacy network.

(c) From the effective date of this section, no prescription drug benefit plan provider shall prohibit or restrict a pharmacy benefit manager from complying with this chapter.

§ -3 Violations; penalties. (a) The insurance commissioner may assess a fine of up to $10,000 for each violation by a pharmacy benefit manager or prescription drug benefit plan provider who is in violation of section -2(b) or (c). In addition, the insurance commissioner may direct the pharmacy benefit manager to cease and desist prohibited activity, take specific affirmative corrective action, or make restitution of money, property, or other assets.

(b) A pharmacy benefit manager or prescription drug benefit plan provider may appeal any decision made by the insurance commissioner under this chapter, whereupon the opportunity for an administrative hearing under chapter 91 shall be afforded. Any pharmacy benefit manager or prescription drug benefit plan provider aggrieved by the final decision and order shall be entitled to judicial review in accordance with chapter 91.

§ -4 Application. If this chapter or any provision of this chapter conflicts at any time with any federal law, then the federal law shall prevail and this chapter or the relevant provisions of this chapter shall become ineffective and invalid. The ineffectiveness or invalidity of this chapter or any of its provisions shall not affect any other provisions or applications of this chapter, which shall be given effect without the invalid provision or application, and to this end, the provisions of this chapter are severable."

SECTION 3. Chapter 87A, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§87A‑ Prescription drugs; mail order opt out option. A beneficiary of a Hawaii employer-union health benefits trust fund health benefits plan may opt out of a plan requirement to purchase prescription drugs from a mail order pharmacy and, as an alternative, choose to purchase prescription drugs from a pharmacy in accordance with section -2(b)."

SECTION 4. (a) Each pharmacy benefit manager, prescription drug benefit plan provider, and the Hawaii employer-union health benefits trust fund shall submit a report to the legislature no later than twenty days prior to the convening of the regular session of 2018.

(b) Each report shall include:

(1) The number of beneficiaries affected by the provisions of this measure;

(2) The number of beneficiaries who opted out of a requirement to purchase prescription drugs from a mail order pharmacy; and

(3) The overall economic impact on the reporting entity of the opt out provisions, including any increased costs to prescription drug benefit plans, increased costs to plan beneficiaries, or any cost savings to plan beneficiaries.

SECTION 5. If any provision of this Act, or the application thereof to any person or circumstance, is held invalid, the invalidity does not affect other provisions or applications of the Act that can be given effect without the invalid provision or application, and to this end the provisions of this Act are severable.

SECTION 6. New statutory material is underscored.

SECTION 7. This Act shall take effect on July 1, 2050; provided that this Act shall be repealed on June 30, 2018.

HOUSE OF REPRESENTATIVES	H.B. NO.	65
TWENTY-SEVENTH LEGISLATURE, 2013		H.D. 2
STATE OF HAWAII		S.D. 2