STAND. COM. REP. NO. 1453-18

Honolulu, Hawaii

, 2018

RE: S.B. No. 3104

S.D. 2

H.D. 2

Honorable Scott K. Saiki

Speaker, House of Representatives

Twenty-Ninth State Legislature

Regular Session of 2018

State of Hawaii

Sir:

Your Committee on Consumer Protection & Commerce, to which was referred S.B. No. 3104, S.D. 2, H.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO PHARMACY BENEFIT MANAGERS,"

begs leave to report as follows:

The purpose of this measure is to better manage costs and access to prescription drugs through increasing transparency and regulations. Specifically, this measure:

(1) Establishes requirements for pharmacy benefit managers and maximum allowable cost, including by authorizing pharmacies to receive comprehensive maximum allowable cost lists and bring complaints within the purview of the Department of Commerce and Consumer Affairs, rather than the Department of Health;

(2) Requires pharmacy benefit managers to disclose where an equivalent drug can be obtained at or below the maximum allowable cost when a maximum allowable cost is upheld on appeal;

(3) Allows contracting pharmacies to reverse and rebill claims if the pharmacy benefit manager establishes a maximum allowable cost that is denied on appeal; provided that the pharmacy benefit manager shall pay the cost difference to the contracting pharmacies; and

(4) Prohibits a contracting pharmacy from disclosing the maximum allowable cost list and related information to any third party.

Times Pharmacy, Weinstein Pharmacy, Pharmacare Hawaii, bb inc, Shiigi Drug Company, Inc., KTA Super Stores, Times Supermarket Pharmacy, Waimanalo Pharmacy Inc, Kamehameha Pharmacy, Hawaii Pharmacists Association, Ululani Pharmacy, National Community Pharmacists Association, Molokai Drugs, Inc., Oahu County Committee on Legislative Priorities of the Democratic Party of Hawai‘i, and many concerned individuals testified in support of this measure. The Hawaii Medical Service Association and CVS Health testified in opposition to this measure. The Insurance Division of the Department of Commerce and Consumer Affairs and The Queen's Health Systems provided comments.

Your Committee has amended this measure by inserting language:

(1) Defining a "contracting pharmacy";

(2) Allowing a contracting pharmacy or pharmacist to provide an insured information regarding the amount of the insured's cost share for a prescription drug; and

(3) Prohibiting a pharmacy benefits manager from penalizing a contracting pharmacy or pharmacist for discussing any allowable information regarding the insured's cost share of prescription drugs or for selling a lower priced prescription drug to the insured if one is available.

As affirmed by the record of votes of the members of your Committee on Consumer Protection & Commerce that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 3104, S.D. 2, H.D. 1, as amended herein, and recommends that it be referred to your Committee on Finance in the form attached hereto as S.B. No. 3104, S.D. 2, H.D. 2.

Respectfully submitted on behalf of the members of the Committee on Consumer Protection & Commerce,

____________________________

ROY M. TAKUMI, Chair