Revision: April 24, 2024, 8:25 a.m.
SB 555-FN - AS AMENDED BY THE SENATE
03/07/2024 0832s
2024 SESSION
24-2870
05/08
SENATE BILL 555-FN
AN ACT relative to receipt of pharmaceutical rebates by insurers and pharmacy benefits managers.
SPONSORS: Sen. Avard, Dist 12; Sen. Watters, Dist 4; Sen. Innis, Dist 7; Sen. Birdsell, Dist 19; Sen. Soucy, Dist 18; Sen. Bradley, Dist 3; Sen. Gannon, Dist 23; Sen. Pearl, Dist 17; Sen. Gendreau, Dist 1; Sen. Carson, Dist 14; Sen. Fenton, Dist 10; Rep. Pauer, Hills. 36; Rep. Mooney, Hills. 12
COMMITTEE: Health and Human Services
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ANALYSIS
This bill revises the annual reporting requirement for pharmacy benefits managers regarding pharmaceutical rebates. The bill also revises the percentage of rebates insurers are required to make available to enrollees, increases the fine for noncompliance, and removes prospective repeal of RSA 415-A:7, relative to insurer cost sharing of rebates.
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Explanation: Matter added to current law appears in bold italics.
Matter removed from current law appears [in brackets and struckthrough.]
Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
03/07/2024 0832s 24-2870
05/08
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Twenty Four
AN ACT relative to receipt of pharmaceutical rebates by insurers and pharmacy benefits managers.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 Pharmacy Benefits Manager Reporting. Amend RSA 402-N:6, I to read as follows:
I. Each pharmacy benefits manager shall submit an annual or quarterly report to the commissioner containing a list of health benefit plans it administered[,] and the [aggregate amount of all] rebates it collected from pharmaceutical manufacturers that were attributable to patient utilization in the state of New Hampshire during the prior calendar year. This paragraph shall not apply to Medicaid, the Medicaid Care Management Program, the Ryan White HIV/AIDS Program administered by the department of health and human services, or self-funded plans such as the state employee health benefit plan. The report submitted to the commissioner shall include the following information:
(a) The aggregate number of rebates and total value received by the pharmacy benefit manager;
(b) The aggregate number of rebates and total value distributed to the appropriate health care insurer;
(c) The aggregate number of rebates and total value passed on to an insured of each health care insurer at the point of sale that reduced the insured’s applicable deductible, copayment, coinsurance, or other cost-sharing amount;
(d) The individual and aggregate amount paid by the health care insurer to the pharmacy benefit manager for pharmacist services itemized by pharmacy, by product (at the unique NDC level), and by goods and services; and
(e) The individual and aggregate amount a pharmacy benefit manager paid for pharmacist services itemized by pharmacy, by product, and by goods and services.
2 Pharmaceutical Rebates. Amend RSA 415-A:7, II-IV to read as follows:
II. All rebates remitted by or on behalf of a pharmaceutical manufacturer, developer, or labeler, directly or indirectly, to an insurer, or to a pharmacy benefits manager under contract with an insurer, related to its prescription drug benefits shall be remitted in [one or both of] the following ways:
(a) At least 50 percent of all rebates shall be remitted directly to the covered person at the point of sale to reduce the out-of-pocket cost to the covered person associated with a particular or specific prescription drug;
(b) Remitted to, and retained by, the insurer. The remainder of the rebates remitted to the insurer shall be applied by the insurer in its plan design and in future plan years to offset the premium for covered persons.
III. Beginning [November 1, 2020] March 1, 2025 and annually thereafter, an insurer shall file with the commissioner a report in the manner and form determined by the commissioner demonstrating the manner in which the insurer and/or its contracted entity for pharmacy benefit services has complied with this section. The report shall include at least the following:
(a) An actuarial certification attesting:
(1) All discounts and rebates received by health insurers were used to reduce costs for policyholders in compliance with paragraph II .
(2) How rebates were remitted in the individual, small, and large group market.
(3) If applied pursuant to subparagraph II(b), an explanation of how remittance was applied to both plan design, based on estimated rebates, and in future plan years to offset premium.
(4) A description of the methodology employed to calculate the estimated rebate amount, for the purpose of applying to plan design.
(b) Methodology for determining estimated rebate amount:
(1) Insurers shall employ actuarial and analytical methodologies to estimate the total rebate amount expected to be received from drug manufacturers over a defined period.
(2) The determination of the estimated rebate amount shall account for factors such as historical rebate data, anticipated changes in drug utilization, formulary modifications, and other pertinent variables.
(3) The calculated estimated rebate amount shall adhere to generally accepted actuarial principles and industry best practices to ensure precision and dependability.
(4) The calculation shall be documented and made available for review by the insurance commissioner, upon request.
III-a. This section shall not apply to Medicaid, the Medicaid Care Management Program, the Ryan White HIV/AIDS Program administered by the department of health and human services, or self-funded plans such as the state employee health benefit plan.
IV. Any insurer that violates any provision of this section may, at the discretion of the commissioner, be subject to subparagraph (a) or (b), or both:
(a) Its certificate of authority may be indefinitely suspended or revoked.
(b) A civil fine not to exceed [$2,500] $10,000 may be imposed for each violation. Repeated violations of the same provision shall constitute separate civil offenses.
3 Repeal. 2020; 15:2, relative to the prospective repeal of RSA 415-A:7, is repealed.
I. Section 3 of this act shall take effect June 30, 2024.
II. The remainder of this act shall take effect 60 days after its passage.
24-2870
Amended 4/23/24
SB 555-FN- FISCAL NOTE
AS AMENDED BY THE SENATE (AMENDMENT #2024-0832s)
AN ACT relative to receipt of pharmaceutical rebates by insurers and pharmacy benefits managers.
FISCAL IMPACT: [ X ] State [ X ] County [ X ] Local [ ] None
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Estimated State Impact - Increase / (Decrease) | ||||||
| FY 2024 | FY 2025 | FY 2026 | FY 2027 | ||
Revenue | $0 | Indeterminable Increase | Indeterminable Increase | Indeterminable Increase | ||
Revenue Fund(s) | General Fund Insurance Premium Tax Revenue | |||||
Expenditures | $0 | $0 | $0 | $0 | ||
Funding Source(s) | None
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Appropriations | $0 | $0 | $0 | $0 | ||
Funding Source(s) | None
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• Does this bill provide sufficient funding to cover estimated expenditures? [X] N/A • Does this bill authorize new positions to implement this bill? [X] No | ||||||
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Estimated Political Subdivision Impact - Increase / (Decrease) | ||||||
| FY 2024 | FY 2025 | FY 2026 | FY 2027 | ||
County Revenue | $0 | $0 | $0 | $0 | ||
County Expenditures | $0 | Indeterminable | Indeterminable | Indeterminable | ||
Local Revenue | $0 | $0 | $0 | $0 | ||
Local Expenditures | $0 | Indeterminable | Indeterminable | Indeterminable | ||
METHODOLOGY:
This bill revises the annual reporting requirement for pharmacy benefits managers (PBMs) regarding pharmaceutical rebates. The bill also revises the percentage of rebates insurers are required to make available to enrollees, increases the fine for noncompliance, and removes prospective repeal of RSA 415-A:7, relative to insurer cost sharing of rebates.
The Insurance Department states section 2, II,(a), of the bill would require insurers to remit at least 50% of product specific rebates directly to the consumer at the point of sale, and that the remaining value of negotiated rebates remitted to the insurer, be applied to the insurer's plan design to offset future years’ premiums. Currently insurers attest to the Department that the entire value of PBM-negotiated rebates are remitted to insurers to offset future years’ premiums. The Department assumes approximately 50% of the nominal value of prescription drug rebates may be redirected to consumers at the point of sale. In plan year 2022, the estimated value of rebates was $90 million. Under this bill 50% or $45 million may not be available to offset future premiums. The Department assumes the changes to carrier reporting requirements will result in a "trivial, but non-zero" fiscal impact to insurance carriers from increased administrative costs.
The Insurance Department assumes, if this bill were to become law, there would be a potentially significant upward pressure on premiums for the commercial, fully insured plans including county and municipal employers purchasing these plans and increased general fund premium tax revenues, however the extent of such increases is indeterminable at this time.
AGENCIES CONTACTED:
Department of Insurance