Amended in Senate March 31, 2016

Senate Bill No. 1454

Introduced by Senator Stone

February 19, 2016

An act to begin delete amend Section 4001 of end delete begin insert add Chapter 9.6 (commencing with Section 4450) to Division 2 of end insert the Business and Professions Code, relating to healing arts.

LEGISLATIVE COUNSEL’S DIGEST

SB 1454, as amended, Stone. Pharmacy.

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Existing law, the Pharmacy Law, provides for the licensure and regulation of pharmacists and pharmacies by the California State Board of Pharmacy. Existing law imposes requirements on audits of pharmacy services provided to beneficiaries of a health benefit plan, as specified.

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This bill would prohibit a pharmacy benefit manager, as defined, from requiring that a pharmacist or pharmacy provide reimbursement to the pharmacy benefit manager for the cost of any drug dispensed to a patient that was properly adjudicated, as defined, except upon a showing of fraud or malfeasance. The bill would require any improper reimbursement made under those provisions during a specified 5-year period to be refunded to the pharmacist or pharmacy, as specified.

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The Pharmacy Law establishes in the Department of Consumer Affairs the California State Board of Pharmacy, which consists of 13 members.

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This bill would make a nonsubstantive change to these provisions.

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Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.

The people of the State of California do enact as follows:

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begin insert SECTION 1. end insert   

end insert

begin insert Chapter 9.6 (commencing with Section 4450) is
added to Division 2 of the end insert begin insert Business and Professions Code end insert begin insert , to read: end insert

begin insert

 

Chapter   begin insert 9.6. end insert Pharmacy Benefits Management

 

begin insert 4450. end insert   

For purposes of this chapter, the following definitions
shall apply:

(a) “Improper reimbursement” means a pharmacy benefit
manager has requested and received reimbursement from a
pharmacist or pharmacy in its network for the cost of a drug
dispensed to a patient that was previously authorized and properly
adjudicated, in violation of subdivision (a) of Section 4451.

(b) “Pharmacist” or “pharmacy” has the same meaning as set
forth in Chapter 9 (commencing with Section 4000), and is a person
or entity located in this state that participates in the network of a
pharmacy benefit manager.

(c) “Pharmacy benefit manager” means an entity that performs
pharmacy benefits management.

(d) “Pharmacy benefits management” means the administration
or management of prescription drug benefits, including, but not
limited to, the procurement of prescription drugs at a negotiated
rate for dispensation within this state, the processing of
prescription drug claims, and the administration of payments
related to prescription drug claims.

(e) “Properly adjudicated” means the pharmacist or pharmacy
was explicitly authorized by the pharmacy benefit manager to
dispense a drug to a patient through its network, and the
pharmacist or pharmacy was entitled to the payment that was
provided, at that point in time, by the pharmacy benefit manager,
pursuant to that authorization.

(f) “Reimbursement” means the amount that was previously
paid by a pharmacy benefit manager to a contracted pharmacist
or pharmacy for the cost of a drug dispensed to a patient that was
authorized to be dispensed as a covered drug and properly
adjudicated.

begin insert 4451. end insert   

(a) Notwithstanding any other law, a pharmacy benefit
manager is prohibited from requiring that a pharmacist or
pharmacy provide reimbursement to the pharmacy benefit manager
for the cost of any drug dispensed to a patient that was properly
adjudicated, except upon a showing of fraud or malfeasance.

(b) No contract entered into on or after January 1, 2017,
between a pharmacy benefit manager and a pharmacist or
pharmacy shall include a provision that conflicts with the
prohibition set forth in subdivision (a).

begin insert 4452. end insert   

(a) Notwithstanding any other law, a pharmacy benefit
manager that administers pharmacy benefits management in this
state that has requested and received any improper reimbursements
from a pharmacist or pharmacy pursuant to the prohibition set
forth in subdivision (a) of Section 4451 shall refund that payment
to the pharmacist or pharmacy.

(b) Subdivision (a) shall apply only to those improper
reimbursements that were received by the pharmacy benefit
manager between January 1, 2012, and January 1, 2017.

end insert

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SECTION 1.  

Section 4001 of the Business and Professions
Code is amended to read:

4001.  

(a) There is in the Department of Consumer Affairs a
California State Board of Pharmacy in which the administration
and enforcement of this chapter is vested. The board is composed
of 13 members.

(b) The Governor shall appoint seven competent pharmacists
who reside in different parts of the state to serve as members of
the board. The Governor shall appoint four public members, and
the Senate Committee on Rules and the Speaker of the Assembly
shall each appoint a public member who shall not be a licensee of
the board, any other board under this division, or any board referred
to in Section 1000 or 3600.

(c) At least five of the seven pharmacist appointees to the board
shall be pharmacists who are actively engaged in the practice of
pharmacy. Additionally, the membership of the board shall include
at least one pharmacist representative from each of the following
practice settings: an acute care hospital, an independent community
pharmacy, a chain community pharmacy, and a long-term health
care or skilled nursing facility. The pharmacist appointees shall
also include a pharmacist who is a member of a labor union that
represents pharmacists. For the purposes of this subdivision, a
“chain community pharmacy” means a chain of 75 or more stores
in California under the same ownership, and an “independent
community pharmacy” means a pharmacy owned by a person or
entity who owns no more than four pharmacies in California.

(d) Members of the board shall be appointed for a term of four
years. No person shall serve as a member of the board for more
than two consecutive terms. Each member shall hold office until
the appointment and qualification of his or her successor or until
one year shall have elapsed since the expiration of the term for
which the member was appointed, whichever first occurs.
Vacancies occurring shall be filled by appointment for the
unexpired term.

(e) Each member of the board shall receive a per diem and
expenses as provided in Section 103.

(f) This section shall remain in effect only until January 1, 2017,
and as of that date is repealed, unless a later enacted statute, that
is enacted before January 1, 2017, deletes or extends that date.
Notwithstanding any other provision of law, the repeal of this
section renders the board subject to review by the appropriate
policy committees of the Legislature.

end delete