BILL NUMBER: AB 2436	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  APRIL 6, 2016

INTRODUCED BY   Assembly Member Roger Hernández

                        FEBRUARY 19, 2016

   An act to add Section 1367.207 to the Health and Safety Code,
  immediately following Section 1367.205,  and to
add Section 10123.202 to the Insurance Code, relating to health care
coverage.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 2436, as amended, Roger Hernández. Health care coverage:
disclosures: drug pricing.
   Existing law, the Knox-Keene Health Care Service Plan Act of 1975,
provides for the licensure and regulation of health care service
plans by the Department of Managed Health Care and makes a willful
violation of the act a crime. Existing law also provides for the
regulation of health insurers by the Department of Insurance.
Existing law imposes various requirements on contracts and policies
that cover prescription drug benefits.
   This bill would require a health care service plan contract or a
policy of health insurance that is issued, amended, or renewed on or
after January 1, 2017, and that provides coverage for prescription
drug benefits to notify the enrollee or  insured 
 insured, at the time that a prescription drug is delivered or
within 30 days of purchase,  of specified information related to
the cost of  a   the  prescription
 drug at the time that the drug is purchased or delivered.
  drug. The bill would require a health care service
plan or a health insurer, in contracting with a pharmaceutical
manufacturer for the purchase of a prescription drug, to require the
manufacturer to disclose to the plan or insurer the cost of the
prescription drug in United States dollars in Canada, Germany, and
Mexico. The bill would make related legislative findings and
declarations.  Because a willful violation of the bill's
requirements by a health care service plan would be a crime, the bill
would impose a state-mandated local program.
   The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
   This bill would provide that no reimbursement is required by this
act for a specified reason.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

   SECTION 1.    (a) The Legislature finds and declares
that the escalating cost of prescription drugs is a major concern for
Californians.  
   (b) It is the intent of the Legislature in enacting this bill to
provide consumers with information about the cost of prescription
drugs, including the cost to the health plan or insurer and the cost
in other countries.  
   (c) It is not the intent of the Legislature in enacting this bill
to encourage Californians to purchase or otherwise obtain
prescription drugs from other countries in violation of federal law.

   SECTION 1.   SEC. 2.   Section 1367.207
is added to the Health and Safety Code, immediately following Section
1367.205  ,  to read:
   1367.207.   (a)    A health care service plan
contract issued, amended, or renewed on or after January 1, 2017,
that provides coverage for prescription drug benefits shall require
the plan to notify the enrollee of the following at the  time
of purchase or  time of delivery  or within 30 days of
purchase  of a prescription drug: 
   (a) 
    (1)  The enrollee's share of the cost for the
prescription drug, including any copayment, coinsurance, or other
cost sharing, and the accumulation of that cost sharing to the
enrollee's deductible, if any, or out-of-pocket maximum. 
   (b) 
    (2)  The cost of the prescription drug to the plan,
after applying any discounts, rebates, or other reductions in cost to
the plan. 
   (c) 
    (3)  The cost of the prescription drug in United States
dollars in the following countries: 
   (1) 
    (A)  Canada. 
   (2) 
    (B)  Germany. 
   (3) 
    (C)  Mexico. 
   (b) In contracting with a pharmaceutical manufacturer for the
purchase of a prescription drug, a health care service plan or its
contracting pharmacy benefits manager, if any, shall require the
pharmaceutical manufacturer to disclose to the plan the cost of the
prescription drug in United States dollars in Canada, Germany, and
Mexico. If the pharmaceutical manufacturer fails to provide that
information, the health care service plan may take that failure into
account in determining whether to include the prescription drug in
the plan's drug formulary or in which tier of the plan's drug
formulary to place the prescription drug. 
   SEC. 2.   SEC. 3.   Section 10123.202 is
added to the Insurance Code, immediately following Section
10123.201, to read:
   10123.202.   (a)    A policy of health insurance
issued, amended, or renewed on or after January 1, 2017, that
provides coverage for prescription drug benefits shall require the
insurer to notify the insured of the following at the  time
of purchase or  time of delivery  or within 30 days of
purchase  of a prescription drug: 
   (a) 
    (1) The insured's share of the cost for the prescription
drug, including any copayment, coinsurance, or other cost sharing,
and the accumulation of that cost sharing to the insured's
deductible, if any, or out-of-pocket maximum. 
   (b) 
    (2)  The cost of the prescription drug to the insurer,
after applying any discounts, rebates, or other reductions in cost to
the insurer. 
   (c) 
    (3) The cost of the prescription drug in United States
dollars in the following countries: 
   (1) 
    (A)  Canada. 
   (2) 
    (B)  Germany. 
   (3) 
    (C)  Mexico. 
   (b) In contracting with a pharmaceutical manufacturer for the
purchase of a prescription drug, a health insurer or its contracting
pharmacy benefits manager, if any, shall require the pharmaceutical
manufacturer to disclose to the insurer the cost of the prescription
drug in United States dollars in Canada, Germany, and Mexico. If the
pharmaceutical manufacturer fails to provide that information, the
health insurer may take that failure into account in determining
whether to include the prescription drug in the insurer's drug
formulary or in which tier of the insurer's drug formulary to place
the prescription drug. 
   SEC. 3.   SEC. 4.   No reimbursement is
required by this act pursuant to Section 6 of Article XIII B of the
California Constitution because the only costs that may be incurred
by a local agency or school district will be incurred because this
act creates a new crime or infraction, eliminates a crime or
infraction, or changes the penalty for a crime or infraction, within
the meaning of Section 17556 of the Government Code, or changes the
definition of a crime within the meaning of Section 6 of Article XIII
B of the California Constitution.