STAND. COM. REP. NO. 1664

Honolulu, Hawaii

, 2019

RE: S.B. No. 1521

S.D. 1

H.D. 1

Honorable Scott K. Saiki

Speaker, House of Representatives

Thirtieth State Legislature

Regular Session of 2019

State of Hawaii

Sir:

Your Committees on Consumer Protection & Commerce and Judiciary, to which was referred S.B. No. 1521, S.D. 1, H.D. 1, entitled:

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

beg leave to report as follows:

The purpose of this measure is to transfer regulatory jurisdiction over pharmacy benefit managers from the Department of Health to the Department of Commerce and Consumer Affairs. Specifically, this measure:

(1) Limits the application of regulations to pharmacy benefit manager contracts with small, independent, and geographically isolated pharmacies;

(2) Specifies drug price information that must be included in the contract between a pharmacy benefit manager and an eligible pharmacy;

(3) Requires pharmacy benefit managers to provide covered pharmacies with up-to-date information on the maximum allowable cost for which a pharmacy will be reimbursed for providing prescription drugs to benefit plan members and to issue reimbursements pursuant to up-to-date costs;

(4) Requires pharmacy benefit managers to establish an appeals process for drug reimbursements that includes rebilling by the pharmacy of claims that are found to have been underpaid; and

(5) Establishes requirements for nondisclosure of pricing and related information by covered pharmacies.

The Hawaii Pharmacist Association, Times Pharmacy, KTA Super Stores, Pharmacare, Waimanalo Pharmacy Inc, Hawaii Food Industry Association, and several individuals testified in support of this measure. Hawaii Medical Service Association testified in opposition to this measure. The Department of Commerce and Consumer Affairs, The Queen's Health Systems, and CVS Health provided comments.

As affirmed by the records of votes of the members of your Committees on Consumer Protection & Commerce and Judiciary that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 1521, S.D. 1, H.D. 1, and recommend that it be referred to your Committee on Finance.

Respectfully submitted on behalf of the members of the Committees on Consumer Protection & Commerce and Judiciary,

____________________________ CHRIS LEE, Chair

____________________________ ROY M. TAKUMI, Chair