Florida Senate - 2023                        COMMITTEE AMENDMENT
       Bill No. CS for SB 1550
       
       
       
       
       
       
                                Ì281818?Î281818                         
       
                              LEGISLATIVE ACTION                        
                    Senate             .             House              
                  Comm: RCS            .                                
                  04/13/2023           .                                
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       The Committee on Fiscal Policy (Brodeur) recommended the
       following:
       
    1         Senate Amendment (with title amendment)
    2  
    3         Delete everything after the enacting clause
    4  and insert:
    5         Section 1. This act may be cited as the “Prescription Drug
    6  Reform Act.”
    7         Section 2. Subsection (29) is added to section 499.005,
    8  Florida Statutes, to read:
    9         499.005 Prohibited acts.—It is unlawful for a person to
   10  perform or cause the performance of any of the following acts in
   11  this state:
   12         (29) Failure to accurately complete and timely submit
   13  reportable drug price increase forms, reports, and documents as
   14  required by s. 499.026 and rules adopted thereunder.
   15         Section 3. Subsection (16) is added to section 499.012,
   16  Florida Statutes, to read:
   17         499.012 Permit application requirements.—
   18         (16)A permit for a prescription drug manufacturer or a
   19  nonresident prescription drug manufacturer is subject to the
   20  requirements of s. 499.026.
   21         Section 4. Section 499.026, Florida Statutes, is created to
   22  read:
   23         499.026 Notification of manufacturer prescription drug
   24  price increases.—
   25         (1)As used in this section, the term:
   26         (a)“Course of therapy” means the recommended daily dose
   27  units of a prescription drug pursuant to its prescribing label
   28  for 30 days or the recommended daily dose units of a
   29  prescription drug pursuant to its prescribing label for a normal
   30  course of treatment which is less than 30 days.
   31         (b)“Manufacturer” means a person holding a prescription
   32  drug manufacturer permit or a nonresident prescription drug
   33  manufacturer permit under s. 499.01.
   34         (c)“Prescription drug” has the same meaning as in s.
   35  499.003 and includes biological products but is limited to those
   36  prescription drugs and biological products intended for human
   37  use.
   38         (d)“Reportable drug price increase” means, for a
   39  prescription drug with a wholesale acquisition cost of at least
   40  $100 for a course of therapy before the effective date of an
   41  increase:
   42         1.Any increase of 15 percent or more of the wholesale
   43  acquisition cost during the preceding 12-month period; or
   44         2.Any cumulative increase of 30 percent or more of the
   45  wholesale acquisition cost during the preceding 3 calendar
   46  years. In calculating the 30 percent threshold, the manufacturer
   47  must base the calculation on the wholesale acquisition cost in
   48  effect at the end of the 3-year period as compared to the
   49  wholesale acquisition cost in effect at the beginning of the
   50  same 3-year period.
   51         (e)“Wholesale acquisition cost” means, with respect to a
   52  prescription drug or biological product, the manufacturer’s list
   53  price for the prescription drug or biological product to
   54  wholesalers or direct purchasers in the United States, not
   55  including prompt pay or other discounts, rebates, or reductions
   56  in price, for the most recent month for which the information is
   57  available, as reported in wholesale price guides or other
   58  publications of drug or biological product pricing data.
   59         (2)On the effective date of a manufacturer’s reportable
   60  drug price increase, the manufacturer must provide notification
   61  of each reportable drug price increase to the department on a
   62  form prescribed by the department. The form must require the
   63  manufacturer to specify all of the following:
   64         (a)The proprietary and nonproprietary names of the
   65  prescription drug, as applicable.
   66         (b)The wholesale acquisition cost before the reportable
   67  drug price increase.
   68         (c)The dollar amount of the reportable drug price
   69  increase.
   70         (d)The percentage amount of the reportable drug price
   71  increase from the wholesale acquisition cost before the
   72  reportable drug price increase.
   73         (e)Whether a change or an improvement in the prescription
   74  drug necessitates the reportable drug price increase.
   75         (f)If a change or an improvement in the prescription drug
   76  necessitates the reportable drug price increase as reported in
   77  paragraph (e), the manufacturer must describe the change or
   78  improvement.
   79         (g)The intended uses of the prescription drug.
   80  
   81  This subsection does not prohibit a manufacturer from notifying
   82  other parties, such as pharmacy benefit managers, of a drug
   83  price increase before the effective date of the drug price
   84  increase.
   85         (3)By April 1 of each year, each manufacturer shall submit
   86  a report to the department on a form prescribed by the
   87  department. A report is not deemed to be submitted until
   88  approved by the department. The report must include all of the
   89  following:
   90         (a)A list of all prescription drugs affected by a
   91  reportable drug price increase during the previous calendar year
   92  and both the dollar amount of each reportable drug price
   93  increase and the percentage increase of each reportable drug
   94  price increase relative to the previous wholesale acquisition
   95  cost of the prescription drug. The prescription drugs must be
   96  identified using their proprietary names and nonproprietary
   97  names, as applicable.
   98         (b)If more than one form has been filed under this section
   99  for previous reportable drug price increases, the percentage
  100  increase of the prescription drug from the earliest form filed
  101  to the most recent form filed.
  102         (c)The intended uses of each prescription drug listed in
  103  the report and whether the prescription drug manufacturer
  104  benefits from market exclusivity for such drug.
  105         (d)The length of time the prescription drug has been
  106  available for purchase.
  107         (e)A listing of the factors contributing to each
  108  reportable drug price increase. As used in this section, the
  109  term “factors” means any of the following: research and
  110  development; manufacturing costs; advertising and marketing;
  111  whether the drug has more competitive value; an increased rate
  112  of inflation or other economic dynamics; changes in market
  113  dynamics; supporting regulatory and safety commitments;
  114  operating patient assistance and educational programs; rebate
  115  increases, including any rebate increase requested by a pharmacy
  116  benefit manager; Medicaid, Medicare, or 340B Drug Pricing
  117  Program offsets; profit; or other factors. An estimated
  118  percentage of the influence of each listed factor must be
  119  provided to equal 100 percent.
  120         (f)A description of the justification for each factor
  121  referenced in paragraph (e) must be provided with such
  122  specificity as to explain the need or justification for each
  123  reportable drug price increase. The department may request
  124  additional information from a manufacturer relating to the need
  125  or justification for any reportable drug price increase before
  126  approving the manufacturer’s report.
  127         (g)Any action that the manufacturer has filed to extend a
  128  patent report after the first extension has been granted.
  129         (4)(a)The department shall submit all forms and reports
  130  submitted by manufacturers to the Agency for Health Care
  131  Administration, to be posted on the agency’s website pursuant to
  132  s. 408.062. The agency may not post on its website any of the
  133  information provided pursuant to paragraph (2)(f), paragraph
  134  (3)(f), or paragraph (3)(g) which is marked as a trade secret.
  135  The agency shall compile all information from the forms and
  136  reports submitted by manufacturers and make it available upon
  137  request to the Governor, the President of the Senate, and the
  138  Speaker of the House of Representatives.
  139         (b)Except for information provided pursuant to paragraph
  140  (2)(f), paragraph (3)(f), or paragraph (3)(g), a manufacturer
  141  may not claim a public records exemption for a trade secret
  142  under s. 119.0715 for any information required by the department
  143  under this section. Department employees remain protected from
  144  liability for release of forms and reports pursuant to s.
  145  119.0715(4).
  146         (5)The department, in consultation with the Agency for
  147  Health Care Administration, shall adopt rules to implement this
  148  section.
  149         (a)The department shall adopt necessary emergency rules
  150  pursuant to s. 120.54(4) to implement this section. If an
  151  emergency rule adopted under this section is held to be
  152  unconstitutional or an invalid exercise of delegated legislative
  153  authority and becomes void, the department may adopt an
  154  emergency rule pursuant to this section to replace the rule that
  155  has become void. If the emergency rule adopted to replace the
  156  void emergency rule is also held to be unconstitutional or an
  157  invalid exercise of delegated legislative authority and becomes
  158  void, the department must follow the nonemergency rulemaking
  159  procedures of the Administrative Procedure Act to replace the
  160  rule that has become void.
  161         (b)For emergency rules adopted under this section, the
  162  department need not make the findings required under s.
  163  120.54(4)(a). Emergency rules adopted under this section are
  164  also exempt from:
  165         1.Sections 120.54(3)(b) and 120.541. Challenges to
  166  emergency rules adopted under this section are subject to the
  167  time schedules provided in s. 120.56(5).
  168         2.Section 120.54(4)(c) and remain in effect until replaced
  169  by rules adopted under the nonemergency rulemaking procedures of
  170  the Administrative Procedure Act.
  171         Section 5. Paragraph (a) of subsection (10) of section
  172  624.307, Florida Statutes, is amended, and paragraph (b) of that
  173  subsection is republished, to read:
  174         624.307 General powers; duties.—
  175         (10)(a) The Division of Consumer Services shall perform the
  176  following functions concerning products or services regulated by
  177  the department or office:
  178         1. Receive inquiries and complaints from consumers.
  179         2. Prepare and disseminate information that the department
  180  deems appropriate to inform or assist consumers.
  181         3. Provide direct assistance to and advocacy for consumers
  182  who request such assistance or advocacy.
  183         4. With respect to apparent or potential violations of law
  184  or applicable rules committed by a person or an entity licensed
  185  by the department or office, report apparent or potential
  186  violations to the office or to the appropriate division of the
  187  department, which may take any additional action it deems
  188  appropriate.
  189         5. Designate an employee of the division as the primary
  190  contact for consumers on issues relating to sinkholes.
  191         6.Designate an employee of the division as the primary
  192  contact for consumers and pharmacies on issues relating to
  193  pharmacy benefit managers. The division must refer to the office
  194  any consumer complaint that alleges conduct that may constitute
  195  a violation of part VII of chapter 626 or for which a pharmacy
  196  benefit manager does not respond in accordance with paragraph
  197  (b).
  198         (b) Any person licensed or issued a certificate of
  199  authority by the department or the office shall respond, in
  200  writing, to the division within 20 days after receipt of a
  201  written request for documents and information from the division
  202  concerning a consumer complaint. The response must address the
  203  issues and allegations raised in the complaint and include any
  204  requested documents concerning the consumer complaint not
  205  subject to attorney-client or work-product privilege. The
  206  division may impose an administrative penalty for failure to
  207  comply with this paragraph of up to $2,500 per violation upon
  208  any entity licensed by the department or the office and $250 for
  209  the first violation, $500 for the second violation, and up to
  210  $1,000 for the third or subsequent violation upon any individual
  211  licensed by the department or the office.
  212         Section 6. Subsection (1) of section 624.490, Florida
  213  Statutes, is amended to read:
  214         624.490 Registration of pharmacy benefit managers.—
  215         (1) As used in this section, the term “pharmacy benefit
  216  manager” has the same meaning as in s. 626.88 means a person or
  217  entity doing business in this state which contracts to
  218  administer prescription drug benefits on behalf of a health
  219  insurer or a health maintenance organization to residents of
  220  this state.
  221         Section 7. Subsections (1) and (5) of section 624.491,
  222  Florida Statutes, are amended to read:
  223         624.491 Pharmacy audits.—
  224         (1) A pharmacy benefits plan or program as defined in s.
  225  626.8825 health insurer or health maintenance organization
  226  providing pharmacy benefits through a major medical individual
  227  or group health insurance policy or a health maintenance
  228  contract, respectively, must comply with the requirements of
  229  this section when the pharmacy benefits plan or program health
  230  insurer or health maintenance organization or any person or
  231  entity acting on behalf of the pharmacy benefits plan or program
  232  health insurer or health maintenance organization, including,
  233  but not limited to, a pharmacy benefit manager as defined in s.
  234  626.88 s. 624.490(1), audits the records of a pharmacy licensed
  235  under chapter 465. The person or entity conducting such audit
  236  must:
  237         (a) Except as provided in subsection (3), notify the
  238  pharmacy at least 7 calendar days before the initial onsite
  239  audit for each audit cycle.
  240         (b) Not schedule an onsite audit during the first 3
  241  calendar days of a month unless the pharmacist consents
  242  otherwise.
  243         (c) Limit the duration of the audit period to 24 months
  244  after the date a claim is submitted to or adjudicated by the
  245  entity.
  246         (d) In the case of an audit that requires clinical or
  247  professional judgment, conduct the audit in consultation with,
  248  or allow the audit to be conducted by, a pharmacist.
  249         (e) Allow the pharmacy to use the written and verifiable
  250  records of a hospital, physician, or other authorized
  251  practitioner, which are transmitted by any means of
  252  communication, to validate the pharmacy records in accordance
  253  with state and federal law.
  254         (f) Reimburse the pharmacy for a claim that was
  255  retroactively denied for a clerical error, typographical error,
  256  scrivener’s error, or computer error if the prescription was
  257  properly and correctly dispensed, unless a pattern of such
  258  errors exists, fraudulent billing is alleged, or the error
  259  results in actual financial loss to the entity.
  260         (g) Provide the pharmacy with a copy of the preliminary
  261  audit report within 120 days after the conclusion of the audit.
  262         (h) Allow the pharmacy to produce documentation to address
  263  a discrepancy or audit finding within 10 business days after the
  264  preliminary audit report is delivered to the pharmacy.
  265         (i) Provide the pharmacy with a copy of the final audit
  266  report within 6 months after the pharmacy’s receipt of the
  267  preliminary audit report.
  268         (j) Calculate any recoupment or penalties based on actual
  269  overpayments and not according to the accounting practice of
  270  extrapolation.
  271         (5) A pharmacy benefits plan or program health insurer or
  272  health maintenance organization that, under terms of a contract,
  273  transfers to a pharmacy benefit manager the obligation to pay a
  274  pharmacy licensed under chapter 465 for any pharmacy benefit
  275  claims arising from services provided to or for the benefit of
  276  an insured or subscriber remains responsible for a violation of
  277  this section.
  278         Section 8. Subsection (1) of section 626.88, Florida
  279  Statutes, is amended, and subsection (6) is added to that
  280  section, to read:
  281         626.88 Definitions.—For the purposes of this part, the
  282  term:
  283         (1) “Administrator” means is any person who directly or
  284  indirectly solicits or effects coverage of, collects charges or
  285  premiums from, or adjusts or settles claims on residents of this
  286  state in connection with authorized commercial self-insurance
  287  funds or with insured or self-insured programs which provide
  288  life or health insurance coverage or coverage of any other
  289  expenses described in s. 624.33(1); or any person who, through a
  290  health care risk contract as defined in s. 641.234 with an
  291  insurer or health maintenance organization, provides billing and
  292  collection services to health insurers and health maintenance
  293  organizations on behalf of health care providers; or a pharmacy
  294  benefit manager. The term does not include, other than any of
  295  the following persons:
  296         (a) An employer or wholly owned direct or indirect
  297  subsidiary of an employer, on behalf of such employer’s
  298  employees or the employees of one or more subsidiary or
  299  affiliated corporations of such employer.
  300         (b) A union on behalf of its members.
  301         (c) An insurance company which is either authorized to
  302  transact insurance in this state or is acting as an insurer with
  303  respect to a policy lawfully issued and delivered by such
  304  company in and pursuant to the laws of a state in which the
  305  insurer was authorized to transact an insurance business.
  306         (d) A health care services plan, health maintenance
  307  organization, professional service plan corporation, or person
  308  in the business of providing continuing care, possessing a valid
  309  certificate of authority issued by the office, and the sales
  310  representatives thereof, if the activities of such entity are
  311  limited to the activities permitted under the certificate of
  312  authority.
  313         (e) An entity that is affiliated with an insurer and that
  314  only performs the contractual duties, between the administrator
  315  and the insurer, of an administrator for the direct and assumed
  316  insurance business of the affiliated insurer. The insurer is
  317  responsible for the acts of the administrator and is responsible
  318  for providing all of the administrator’s books and records to
  319  the insurance commissioner, upon a request from the insurance
  320  commissioner. For purposes of this paragraph, the term “insurer”
  321  means a licensed insurance company, health maintenance
  322  organization, prepaid limited health service organization, or
  323  prepaid health clinic.
  324         (f) A nonresident entity licensed in its state of domicile
  325  as an administrator if its duties in this state are limited to
  326  the administration of a group policy or plan of insurance and no
  327  more than a total of 100 lives for all plans reside in this
  328  state.
  329         (g) An insurance agent licensed in this state whose
  330  activities are limited exclusively to the sale of insurance.
  331         (h) A person appointed as a managing general agent in this
  332  state, whose activities are limited exclusively to the scope of
  333  activities conveyed under such appointment.
  334         (i) An adjuster licensed in this state whose activities are
  335  limited to the adjustment of claims.
  336         (j) A creditor on behalf of such creditor’s debtors with
  337  respect to insurance covering a debt between the creditor and
  338  its debtors.
  339         (k) A trust and its trustees, agents, and employees acting
  340  pursuant to such trust established in conformity with 29 U.S.C.
  341  s. 186.
  342         (l) A trust exempt from taxation under s. 501(a) of the
  343  Internal Revenue Code, a trust satisfying the requirements of
  344  ss. 624.438 and 624.439, or any governmental trust as defined in
  345  s. 624.33(3), and the trustees and employees acting pursuant to
  346  such trust, or a custodian and its agents and employees,
  347  including individuals representing the trustees in overseeing
  348  the activities of a service company or administrator, acting
  349  pursuant to a custodial account which meets the requirements of
  350  s. 401(f) of the Internal Revenue Code.
  351         (m) A financial institution which is subject to supervision
  352  or examination by federal or state authorities or a mortgage
  353  lender licensed under chapter 494 who collects and remits
  354  premiums to licensed insurance agents or authorized insurers
  355  concurrently or in connection with mortgage loan payments.
  356         (n) A credit card issuing company which advances for and
  357  collects premiums or charges from its credit card holders who
  358  have authorized such collection if such company does not adjust
  359  or settle claims.
  360         (o) A person who adjusts or settles claims in the normal
  361  course of such person’s practice or employment as an attorney at
  362  law and who does not collect charges or premiums in connection
  363  with life or health insurance coverage.
  364         (p) A person approved by the department who administers
  365  only self-insured workers’ compensation plans.
  366         (q) A service company or service agent and its employees,
  367  authorized in accordance with ss. 626.895-626.899, serving only
  368  a single employer plan, multiple-employer welfare arrangements,
  369  or a combination thereof.
  370         (r) Any provider or group practice, as defined in s.
  371  456.053, providing services under the scope of the license of
  372  the provider or the member of the group practice.
  373         (s) Any hospital providing billing, claims, and collection
  374  services solely on its own and its physicians’ behalf and
  375  providing services under the scope of its license.
  376         (t) A corporation not for profit whose membership consists
  377  entirely of local governmental units authorized to enter into
  378  risk management consortiums under s. 112.08.
  379  
  380  A person who provides billing and collection services to health
  381  insurers and health maintenance organizations on behalf of
  382  health care providers shall comply with the provisions of ss.
  383  627.6131, 641.3155, and 641.51(4).
  384         (6)“Pharmacy benefit manager” means a person or an entity
  385  doing business in this state which contracts to administer
  386  prescription drug benefits on behalf of a pharmacy benefits plan
  387  or program as defined in s. 626.8825. The term includes, but is
  388  not limited to, a person or an entity that performs one or more
  389  of the following services on behalf of such plan or program:
  390         (a)Pharmacy claims processing.
  391         (b)Administration or management of a pharmacy discount
  392  card program and performance of any other service listed in this
  393  subsection.
  394         (c)Managing pharmacy networks or pharmacy reimbursement.
  395         (d)Paying or managing claims for pharmacist services
  396  provided to covered persons.
  397         (e)Developing or managing a clinical formulary, including
  398  utilization management or quality assurance programs.
  399         (f)Pharmacy rebate administration.
  400         (g)Managing patient compliance, therapeutic intervention,
  401  or generic substitution programs.
  402         (h)Administration or management of a mail-order pharmacy
  403  program.
  404         Section 9. Present subsections (3) through (6) of section
  405  626.8805, Florida Statutes, are redesignated as subsections (4)
  406  through (7), respectively, a new subsection (3) and subsection
  407  (8) are added to that section, and subsection (1) and present
  408  subsection (3) of that section are amended, to read:
  409         626.8805 Certificate of authority to act as administrator.—
  410         (1) It is unlawful for any person to act as or hold himself
  411  or herself out to be an administrator in this state without a
  412  valid certificate of authority issued by the office pursuant to
  413  ss. 626.88-626.894. A pharmacy benefit manager that is
  414  registered with the office under s. 624.490 as of June 30, 2023,
  415  may continue to operate until January 1, 2024, as an
  416  administrator without a certificate of authority and is not in
  417  violation of the requirement to possess a valid certificate of
  418  authority as an administrator during that timeframe. To qualify
  419  for and hold authority to act as an administrator in this state,
  420  an administrator must otherwise be in compliance with this code
  421  and with its organizational agreement. The failure of any
  422  person, excluding a pharmacy benefit manager, to hold such a
  423  certificate while acting as an administrator shall subject such
  424  person to a fine of not less than $5,000 or more than $10,000
  425  for each violation. A person who, on or after January 1, 2024,
  426  does not hold a certificate of authority to act as an
  427  administrator while operating as a pharmacy benefit manager is
  428  subject to a fine of $10,000 per violation per day. By January
  429  15, 2024, the office shall submit to the Governor, the President
  430  of the Senate, and the Speaker of the House of Representatives a
  431  report detailing whether each pharmacy benefit manager operating
  432  in this state on January 1, 2024, obtained a certificate of
  433  authority on or before that date as required by this section.
  434         (3) An applicant that is a pharmacy benefit manager must
  435  also submit all of the following:
  436         (a)A complete biographical statement on forms prescribed
  437  by the commission.
  438         (b)An independent background report as prescribed by the
  439  commission.
  440         (c)A full set of fingerprints of all of the individuals
  441  referenced in paragraph (2)(c) to the office or to a vendor,
  442  entity, or agency authorized by s. 943.053(13). The office,
  443  vendor, entity, or agency, as applicable, shall forward the
  444  fingerprints to the Department of Law Enforcement for state
  445  processing, and the Department of Law Enforcement shall forward
  446  the fingerprints to the Federal Bureau of Investigation for
  447  national processing in accordance with s. 943.053 and 28 C.F.R.
  448  s. 20.
  449         (d)A self-disclosure of any administrative, civil, or
  450  criminal complaints, settlements, or discipline of the
  451  applicant, or any of the applicant’s affiliates, which relate to
  452  a violation of the insurance laws, including pharmacy benefit
  453  manager laws, in any state.
  454         (e)A statement attesting to compliance with the network
  455  requirements in s. 626.8825 beginning January 1, 2024.
  456         (4)(a)(3) The applicant shall make available for inspection
  457  by the office copies of all contracts relating to services
  458  provided by the administrator to insurers or other persons using
  459  the services of the administrator.
  460         (b)An applicant that is a pharmacy benefit manager shall
  461  also make available for inspection by the office:
  462         1.Copies of all contract templates with any pharmacy as
  463  defined in s. 465.003; and
  464         2.Copies of all subcontracts to support its operations.
  465         (8)A pharmacy benefit manager is exempt from fees
  466  associated with the initial application and the annual filing
  467  fees in s. 626.89.
  468         Section 10. Section 626.8814, Florida Statutes, is amended
  469  to read:
  470         626.8814 Disclosure of ownership or affiliation.—
  471         (1) Each administrator shall identify to the office any
  472  ownership interest or affiliation of any kind with any insurance
  473  company responsible for providing benefits directly or through
  474  reinsurance to any plan for which the administrator provides
  475  administrative services.
  476         (2)Pharmacy benefit managers shall also identify to the
  477  office any ownership affiliation of any kind with any pharmacy
  478  which, either directly or indirectly, through one or more
  479  intermediaries:
  480         (a)Has an investment or ownership interest in a pharmacy
  481  benefit manager holding a certificate of authority issued under
  482  this part;
  483         (b)Shares common ownership with a pharmacy benefit manager
  484  holding a certificate of authority issued under this part; or
  485         (c)Has an investor or a holder of an ownership interest
  486  which is a pharmacy benefit manager holding a certificate of
  487  authority issued under this part.
  488         (3)A pharmacy benefit manager shall report any change in
  489  information required by subsection (2) to the office in writing
  490  within 60 days after the change occurs.
  491         Section 11. Section 626.8825, Florida Statutes, is created
  492  to read:
  493         626.8825 Pharmacy benefit manager transparency and
  494  accountability.—
  495         (1)DEFINITIONS.—As used in this section, the term:
  496         (a)“Adjudication transaction fee” means a fee charged by
  497  the pharmacy benefit manager to the pharmacy for electronic
  498  claim submissions.
  499         (b)“Affiliated pharmacy” means a pharmacy that, either
  500  directly or indirectly through one or more intermediaries:
  501         1.Has an investment or ownership interest in a pharmacy
  502  benefit manager holding a certificate of authority issued under
  503  this part;
  504         2.Shares common ownership with a pharmacy benefit manager
  505  holding a certificate of authority issued under this part; or
  506         3.Has an investor or a holder of an ownership interest
  507  which is a pharmacy benefit manager holding a certificate of
  508  authority issued under this part.
  509         (c)“Brand name or generic effective rate” means the
  510  contractual rate set forth by a pharmacy benefit manager for the
  511  reimbursement of covered brand name or generic drugs, calculated
  512  using the total payments in the aggregate, by drug type, during
  513  the performance period. The effective rates are typically
  514  calculated as a discount from industry benchmarks, such as
  515  average wholesale price or wholesale acquisition cost.
  516         (d)“Covered person” means a person covered by,
  517  participating in, or receiving the benefit of a pharmacy
  518  benefits plan or program.
  519         (e)“Direct and indirect remuneration fees” means price
  520  concessions that are paid to the pharmacy benefit manager by the
  521  pharmacy retrospectively and that cannot be calculated at the
  522  point of sale. The term may also include discounts, chargebacks
  523  or rebates, cash discounts, free goods contingent on a purchase
  524  agreement, upfront payments, coupons, goods in kind, free or
  525  reduced-price services, grants, or other price concessions or
  526  similar benefits from manufacturers, pharmacies, or similar
  527  entities.
  528         (f)“Dispensing fee” means a fee intended to cover
  529  reasonable costs associated with providing the drug to a covered
  530  person. This cost includes the pharmacist’s services and the
  531  overhead associated with maintaining the facility and equipment
  532  necessary to operate the pharmacy.
  533         (g)“Effective rate guarantee” means the minimum ingredient
  534  cost reimbursement a pharmacy benefit manager guarantees it will
  535  pay for pharmacist services during the applicable measurement
  536  period.
  537         (h)“Erroneous claims” means pharmacy claims submitted in
  538  error, including, but not limited to, unintended, incorrect,
  539  fraudulent, or test claims.
  540         (i)“Group purchasing organization” means an entity
  541  affiliated with a pharmacy benefit manager or a pharmacy
  542  benefits plan or program which uses purchasing volume aggregates
  543  as leverage to negotiate discounts and rebates for covered
  544  prescription drugs with pharmaceutical manufacturers,
  545  distributors, and wholesale vendors.
  546         (j)“Incentive payment” means a retrospective monetary
  547  payment made as a reward or recognition by the pharmacy benefits
  548  plan or program or pharmacy benefit manager to a pharmacy for
  549  meeting or exceeding predefined pharmacy performance metrics as
  550  related to quality measures, such as Healthcare Effectiveness
  551  Data and Information Set measures.
  552         (k)“Maximum allowable cost appeal pricing adjustment”
  553  means a retrospective positive payment adjustment made to a
  554  pharmacy by the pharmacy benefits plan or program or by the
  555  pharmacy benefit manager pursuant to an approved maximum
  556  allowable cost appeal request submitted by the same pharmacy to
  557  dispute the amount reimbursed for a drug based on the pharmacy
  558  benefit manager’s listed maximum allowable cost price.
  559         (l)“Monetary recoupments” means rescinded or recouped
  560  payments from a pharmacy or provider by the pharmacy benefits
  561  plan or program or by the pharmacy benefit manager.
  562         (m)“Network” means a group of pharmacies that agree to
  563  provide pharmacist services to covered persons on behalf of a
  564  pharmacy benefits plan or program or a group of pharmacy
  565  benefits plans or programs in exchange for payment for such
  566  services. The term includes a pharmacy that generally dispenses
  567  outpatient prescription drugs to covered persons.
  568         (n)“Network reconciliation offsets” means a process during
  569  annual payment reconciliation between a pharmacy benefit manager
  570  and a pharmacy which allows the pharmacy benefit manager to
  571  offset an amount for overperformance or underperformance of
  572  contractual guarantees across guaranteed line items, channels,
  573  networks, or payors, as applicable.
  574         (o)“Participation contract” means any agreement between a
  575  pharmacy benefit manager and pharmacy for the provision and
  576  reimbursement of pharmacist services and any exhibits,
  577  attachments, amendments, or addendums to such agreement.
  578         (p)“Pass-through pricing model” means a payment model used
  579  by a pharmacy benefit manager in which the payments made by the
  580  pharmacy benefits plan or program to the pharmacy benefit
  581  manager for the covered outpatient drugs are:
  582         1.Equivalent to the payments the pharmacy benefit manager
  583  makes to a dispensing pharmacy or provider for such drugs,
  584  including any contracted professional dispensing fee between the
  585  pharmacy benefit manager and its network of pharmacies. Such
  586  dispensing fee would be paid if the pharmacy benefits plan or
  587  program was making the payments directly.
  588         2.Passed through in their entirety by the pharmacy
  589  benefits plan or program or by the pharmacy benefit manager to
  590  the pharmacy or provider that dispenses the drugs, and the
  591  payments are made in a manner that is not offset by any
  592  reconciliation.
  593         (q)“Pharmacist” has the same meaning as in s. 465.003.
  594         (r)“Pharmacist services” means products, goods, and
  595  services or any combination of products, goods, and services
  596  provided as part of the practice of the profession of pharmacy
  597  as defined in s. 465.003 or otherwise covered by a pharmacy
  598  benefits plan or program.
  599         (s)“Pharmacy” has the same meaning as in s. 465.003.
  600         (t)“Pharmacy benefit manager” has the same meaning as in
  601  s. 626.88.
  602         (u)“Pharmacy benefits plan or program” means a plan or
  603  program that pays for, reimburses, covers the cost of, or
  604  provides access to discounts on pharmacist services provided by
  605  one or more pharmacies to covered persons who reside in, are
  606  employed by, or receive pharmacist services from this state. The
  607  term includes, but is not limited to, health maintenance
  608  organizations, health insurers, self-insured employer health
  609  plans, discount card programs, and government-funded health
  610  plans, including the Statewide Medicaid Managed Care program
  611  established pursuant to part IV of chapter 409 and the state
  612  group insurance program pursuant to part I of chapter 110.
  613         (v)“Rebate” means all payments that accrue to a pharmacy
  614  benefit manager or its pharmacy benefits plan or program client
  615  or an affiliated group purchasing organization, directly or
  616  indirectly, from a pharmaceutical manufacturer, including, but
  617  not limited to, discounts, administration fees, credits,
  618  incentives, or penalties associated directly or indirectly in
  619  any way with claims administered on behalf of a pharmacy
  620  benefits plan or program client.
  621         (w)“Spread pricing” is the practice in which a pharmacy
  622  benefit manager charges a pharmacy benefits plan or program a
  623  different amount for pharmacist services than the amount the
  624  pharmacy benefit manager reimburses a pharmacy for such
  625  pharmacist services.
  626         (x)“Usual and customary price” means the amount charged to
  627  cash customers for a pharmacist service exclusive of sales tax
  628  or other amounts claimed.
  629         (2)CONTRACTS BETWEEN A PHARMACY BENEFIT MANAGER AND A
  630  PHARMACY BENEFITS PLAN OR PROGRAM.—In addition to any other
  631  requirements in the Florida Insurance Code, all contractual
  632  arrangements executed, amended, adjusted, or renewed on or after
  633  July 1, 2023, which are applicable to pharmacy benefits covered
  634  on or after January 1, 2024, between a pharmacy benefit manager
  635  and a pharmacy benefits plan or program must:
  636         (a)Use a pass-through pricing model, remaining consistent
  637  with the prohibition in paragraph (3)(c).
  638         (b)Exclude terms that allow for the direct or indirect
  639  engagement in the practice of spread pricing unless the pharmacy
  640  benefit manager passes along the entire amount of such
  641  difference to the pharmacy benefits plan or program as allowable
  642  under paragraph (a).
  643         (c)Ensure that funds received in relation to providing
  644  services for a pharmacy benefits plan or program or a pharmacy
  645  are received by the pharmacy benefit manager in trust for the
  646  pharmacy benefits plan or program or pharmacy, as applicable,
  647  and are used or distributed only pursuant to the pharmacy
  648  benefit manager’s contract with the pharmacy benefits plan or
  649  program or with the pharmacy or as otherwise required by
  650  applicable law.
  651         (d) Require the pharmacy benefit manager to pass 100
  652  percent of all prescription drug manufacturer rebates, including
  653  nonresident manufacturer rebates, received to the pharmacy
  654  benefits plan or program, if the contractual arrangement
  655  delegates the negotiation of rebates to the pharmacy benefit
  656  manager, for the sole purpose of offsetting defined cost sharing
  657  and reducing premiums of covered persons. Any excess rebate
  658  revenue after the pharmacy benefit manager and the pharmacy
  659  benefits plan or program have taken all actions required under
  660  this paragraph must be used for the sole purpose of offsetting
  661  copayments and deductibles of covered persons. This paragraph
  662  does not apply to contracts involving Medicaid managed care
  663  plans.
  664         (e)Include network adequacy requirements that meet or
  665  exceed the Medicare Part D program standards for convenient
  666  access to network pharmacies set forth in 42 C.F.R. s. 423.120,
  667  and that:
  668         1.Do not limit a network to solely include affiliated
  669  pharmacies;
  670         2.Require a pharmacy benefit manager to offer a provider
  671  contract to licensed pharmacies physically located on the
  672  physical site of providers that are:
  673         a.Within the pharmacy benefits plan’s or program’s
  674  geographic service area and that have been specifically
  675  designated as essential providers by the Agency for Health Care
  676  Administration pursuant to s. 409.975(1)(a);
  677         b.Designated as a Cancer Center of Excellence under s.
  678  381.925, regardless of the pharmacy benefits plan’s or program’s
  679  geographic service area;
  680         c.Organ transplant hospitals, regardless of the pharmacy
  681  benefits plan’s or program’s geographic service area;
  682         d.Hospitals licensed as specialty children’s hospitals as
  683  defined in s. 395.002; or
  684         e.Regional perinatal intensive care centers as defined in
  685  s. 383.16(2), regardless of the pharmacy benefits plan’s or
  686  program’s geographic service area.
  687  
  688  Such provider contracts must be solely for the administration or
  689  dispensing of covered prescription drugs, including biological
  690  products, that are administered through infusions, intravenously
  691  injected, inhaled during a surgical procedure, or a covered
  692  parenteral drug, as part of onsite outpatient care;
  693         3.Do not require a covered person to receive a
  694  prescription drug by United States mail, common carrier, local
  695  courier, third-party company or delivery service, or pharmacy
  696  direct delivery; unless the prescription drug cannot be acquired
  697  at any retail pharmacy in the pharmacy benefit manager’s network
  698  for the covered person’s pharmacy benefits plan or program. This
  699  subparagraph does not prohibit a pharmacy benefit manager from
  700  operating mail order or delivery programs on an opt-in basis at
  701  the sole discretion of a covered person;
  702         4.Prohibit a requirement for a covered person to receive
  703  pharmacist services from an affiliated pharmacy or an affiliated
  704  health care provider for the in-person administration of covered
  705  prescription drugs; offering or implementing pharmacy networks
  706  that require or provide a promotional item or an incentive,
  707  defined as anything other than a reduced cost-sharing amount or
  708  enhanced quantity limit allowed under the benefit design for a
  709  covered drug, to a covered person to use an affiliated pharmacy
  710  or an affiliated health care provider for the in-person
  711  administration of covered prescription drugs; or advertising,
  712  marketing, or promoting an affiliated pharmacy to covered
  713  persons. Subject to the foregoing, a pharmacy benefit manager
  714  may include an affiliated pharmacy in communications to covered
  715  persons regarding network pharmacies and prices, provided that
  716  the pharmacy benefit manager includes information, such as links
  717  to all nonaffiliated network pharmacies, in such communications
  718  and that the information provided is accurate and of equal
  719  prominence. This paragraph may not be construed to prohibit a
  720  pharmacy benefit manager from entering into an agreement with an
  721  affiliated pharmacy to provide pharmacist services to covered
  722  persons.
  723         (f)Prohibit the ability of a pharmacy benefit manager to
  724  condition participation in one pharmacy network on participation
  725  in any other pharmacy network or penalize a pharmacy for
  726  exercising its prerogative not to participate in a specific
  727  pharmacy network.
  728         (g)Prohibit a pharmacy benefit manager from instituting a
  729  network that requires a pharmacy to meet accreditation standards
  730  inconsistent with or more stringent than applicable federal and
  731  state requirements for licensure and operation as a pharmacy in
  732  this state. However, a pharmacy benefit manager may specify
  733  additional specialty networks that require enhanced standards
  734  related to the safety and competency necessary to meet the
  735  United States Food and Drug Administration’s limited
  736  distribution requirements for dispensing any covered drug, on a
  737  drug-by-drug basis, that requires extraordinary special
  738  handling, provider coordination, clinical care or monitoring, or
  739  patient education when such extraordinary requirements cannot be
  740  met by a network pharmacy. For purposes of this paragraph, drugs
  741  requiring extraordinary special handling include, but are not
  742  limited to, drugs that are subject to a risk evaluation and
  743  mitigation strategy approved by the United States Food and Drug
  744  Administration; require special certification of a health care
  745  provider to prescribe, receive, dispense, or administer; require
  746  special handling due to the molecular complexity or cytotoxic
  747  properties of the biologic or biosimilar product or drug;
  748  require cold chain storage and shipping or specialized equipment
  749  to dispense; or require other conditions of a similar gravity.
  750         (h)1.At a minimum, require the pharmacy benefit manager or
  751  pharmacy benefits plan or program to, upon revising its
  752  formulary of covered prescription drugs during a plan year,
  753  provide a 60-day continuity-of-care period in which the covered
  754  prescription drug that is being revised from the formulary
  755  continues to be provided at the same cost for the patient for a
  756  period of 60 days. The 60-day continuity-of-care period
  757  commences upon notification to the patient. This requirement
  758  does not apply if the covered prescription drug:
  759         a.Has been approved and made available over the counter by
  760  the United States Food and Drug Administration and has entered
  761  the commercial market as such;
  762         b.Has been removed or withdrawn from the commercial market
  763  by the manufacturer; or
  764         c.Is subject to an involuntary recall by state or federal
  765  authorities and is no longer available on the commercial market.
  766         2.Beginning January 1, 2024, and annually thereafter, the
  767  pharmacy benefits plan or program shall submit to the office,
  768  under the penalty of perjury, a statement attesting to its
  769  compliance with the requirements of this subsection.
  770         (3)CONTRACTS BETWEEN A PHARMACY BENEFIT MANAGER AND A
  771  PARTICIPATING PHARMACY.—In addition to other requirements in the
  772  Florida Insurance Code, a participation contract executed,
  773  amended, adjusted, or renewed on or after July 1, 2023, that
  774  applies to pharmacist services on or after January 1, 2024,
  775  between a pharmacy benefit manager and one or more pharmacies or
  776  pharmacists, must include, in substantial form, terms that
  777  ensure compliance with all of the following requirements, and
  778  that, except to the extent not allowed by law, shall supersede
  779  any contractual terms in the participation contract to the
  780  contrary:
  781         (a)At the time of adjudication for electronic claims or
  782  the time of reimbursement for nonelectronic claims, the pharmacy
  783  benefit manager shall provide the pharmacy with a remittance,
  784  including such detailed information as is necessary for the
  785  pharmacy or pharmacist to identify the reimbursement schedule
  786  for the specific network applicable to the claim and which is
  787  the basis used by the pharmacy benefit manager to calculate the
  788  amount of reimbursement paid. This information must include, but
  789  is not limited to, the applicable network reimbursement ID or
  790  plan ID as defined in the most current version of the National
  791  Council for Prescription Drug Programs (NCPDP) Telecommunication
  792  Standard Implementation Guide, or its nationally recognized
  793  successor industry guide. The commission shall adopt rules to
  794  implement this paragraph.
  795         (b)The pharmacy benefit manager must ensure that any basis
  796  of reimbursement information is communicated to a pharmacy in
  797  accordance with the NCPDP Telecommunication Standard
  798  Implementation Guide, or its nationally recognized successor
  799  industry guide, when performing reconciliation for any effective
  800  rate guarantee, and that such basis of reimbursement information
  801  communicated is accurate, corresponds with the applicable
  802  network rate, and may be relied upon by the pharmacy.
  803         (c)A prohibition of financial clawbacks, reconciliation
  804  offsets, or offsets to adjudicated claims. A pharmacy benefit
  805  manager may not charge, withhold, or recoup direct or indirect
  806  remuneration fees, dispensing fees, brand name or generic
  807  effective rate adjustments through reconciliation, or any other
  808  monetary charge, withholding, or recoupments as related to
  809  discounts, multiple network reconciliation offsets, adjudication
  810  transaction fees, and any other instance when a fee may be
  811  recouped from a pharmacy. This prohibition does not apply to:
  812         1.Any incentive payments provided by the pharmacy benefit
  813  manager to a network pharmacy for meeting or exceeding
  814  predefined quality measures, such as Healthcare Effectiveness
  815  Data and Information Set measures; recoupment due to an
  816  erroneous claim, fraud, waste, or abuse; a claim adjudicated in
  817  error; a maximum allowable cost appeal pricing adjustment; or an
  818  adjustment made as part of a pharmacy audit pursuant to s.
  819  624.491.
  820         2.Any recoupment that is returned to the state for
  821  programs in chapter 409 or the state group insurance program in
  822  s. 110.123.
  823         (d)A pharmacy benefit manager may not unilaterally change
  824  the terms of any participation contract.
  825         (e)Unless otherwise prohibited by law, a pharmacy benefit
  826  manager may not prohibit a pharmacy or pharmacist from:
  827         1.Offering mail or delivery services on an opt-in basis at
  828  the sole discretion of the covered person.
  829         2.Mailing or delivering a prescription drug to a covered
  830  person upon his or her request.
  831         3.Charging a shipping or handling fee to a covered person
  832  requesting a prescription drug be mailed or delivered if the
  833  pharmacy or pharmacist discloses to the covered person before
  834  the mailing or delivery the amount of the fee that will be
  835  charged and that the fee may not be reimbursable by the covered
  836  person’s pharmacy benefits plan or program.
  837         (f)The pharmacy benefit manager must provide a pharmacy,
  838  upon its request, a list of pharmacy benefits plans or programs
  839  in which the pharmacy is a part of the network. Updates to the
  840  list must be communicated to the pharmacy within 7 days. The
  841  pharmacy benefit manager may not restrict the pharmacy or
  842  pharmacist from disclosing this information to the public.
  843         (g)The pharmacy benefit manager must ensure that the
  844  Electronic Remittance Advice contains claim level payment
  845  adjustments in accordance with the American National Standards
  846  Institute Accredited Standards Committee, X12 format, and
  847  includes or is accompanied by the appropriate level of detail
  848  for the pharmacy to reconcile any debits or credits, including,
  849  but not limited to, pharmacy NCPDP or NPI identifier, date of
  850  service, prescription number, refill number, adjustment code, if
  851  applicable, and transaction amount.
  852         (h)The pharmacy benefit manager shall provide a reasonable
  853  administrative appeal procedure to allow a pharmacy or
  854  pharmacist to challenge the maximum allowable cost pricing
  855  information and the reimbursement made under the maximum
  856  allowable cost as defined in s. 627.64741 for a specific drug as
  857  being below the acquisition cost available to the challenging
  858  pharmacy or pharmacist.
  859         1.The administrative appeal procedure must include a
  860  telephone number and e-mail address, or a website, for the
  861  purpose of submitting the administrative appeal. The appeal may
  862  be submitted by the pharmacy or an agent of the pharmacy
  863  directly to the pharmacy benefit manager or through a pharmacy
  864  service administration organization. The pharmacy or pharmacist
  865  must be given at least 30 business days after a maximum
  866  allowable cost update or after an adjudication for an electronic
  867  claim or reimbursement for a nonelectronic claim to file the
  868  administrative appeal.
  869         2.The pharmacy benefit manager must respond to the
  870  administrative appeal within 30 business days after receipt of
  871  the appeal.
  872         3.If the appeal is upheld, the pharmacy benefit manager
  873  must:
  874         a.Update the maximum allowable cost pricing information to
  875  at least the acquisition cost available to the pharmacy;
  876         b.Permit the pharmacy or pharmacist to reverse and rebill
  877  the claim in question;
  878         c.Provide to the pharmacy or pharmacist the national drug
  879  code on which the increase or change is based; and
  880         d.Make the increase or change effective for each similarly
  881  situated pharmacy or pharmacist who is subject to the applicable
  882  maximum allowable cost pricing information.
  883         4.If the appeal is denied, the pharmacy benefit manager
  884  must provide to the pharmacy or pharmacist the national drug
  885  code and the name of the national or regional pharmaceutical
  886  wholesalers operating in this state which have the drug
  887  currently in stock at a price below the maximum allowable cost
  888  pricing information.
  889         5.Every 90 days, a pharmacy benefit manager shall report
  890  to the office the total number of appeals received and denied in
  891  the preceding 90-day period, with an explanation or reason for
  892  each denial, for each specific drug for which an appeal was
  893  submitted pursuant to this paragraph.
  894         Section 12. Section 626.8827, Florida Statutes, is created
  895  to read:
  896         626.8827 Pharmacy benefit manager prohibited practices.—In
  897  addition to other prohibitions in this part, a pharmacy benefit
  898  manager may not do any of the following:
  899         (1)Prohibit, restrict, or penalize in any way a pharmacy
  900  or pharmacist from disclosing to any person any information that
  901  the pharmacy or pharmacist deems appropriate, including, but not
  902  limited to, information regarding any of the following:
  903         (a) The nature of treatment, risks, or alternatives
  904  thereto.
  905         (b) The availability of alternate treatment, consultations,
  906  or tests.
  907         (c) The decision of utilization reviewers or similar
  908  persons to authorize or deny pharmacist services.
  909         (d) The process used to authorize or deny pharmacist
  910  services or benefits.
  911         (e) Information on financial incentives and structures used
  912  by the pharmacy benefits plan or program.
  913         (f) Information that may reduce the costs of pharmacist
  914  services.
  915         (g) Whether the cost-sharing obligation exceeds the retail
  916  price for a covered prescription drug and the availability of a
  917  more affordable alternative drug, pursuant to s. 465.0244.
  918         (2) Prohibit, restrict, or penalize in any way a pharmacy
  919  or pharmacist from disclosing information to the office, the
  920  Agency for Health Care Administration, Department of Management
  921  Services, law enforcement, or state and federal governmental
  922  officials, provided that the recipient of the information
  923  represents it has the authority, to the extent provided by state
  924  or federal law, to maintain proprietary information as
  925  confidential; and before disclosure of information designated as
  926  confidential, the pharmacist or pharmacy marks as confidential
  927  any document in which the information appears or requests
  928  confidential treatment for any oral communication of the
  929  information.
  930         (3) Communicate at the point-of-sale, or otherwise require,
  931  a cost-sharing obligation for the covered person in an amount
  932  that exceeds the lesser of:
  933         (a) The applicable cost-sharing amount under the applicable
  934  pharmacy benefits plan or program; or
  935         (b) The usual and customary price, as defined in s.
  936  626.8825, of the pharmacist services.
  937         (4) Transfer or share records relative to prescription
  938  information containing patient-identifiable or prescriber
  939  identifiable data to an affiliated pharmacy for any commercial
  940  purpose other than the limited purposes of facilitating pharmacy
  941  reimbursement, formulary compliance, or utilization review on
  942  behalf of the applicable pharmacy benefits plan or program.
  943         (5) Fail to make any payment due to a pharmacy for an
  944  adjudicated claim with a date of service before the effective
  945  date of a pharmacy’s termination from a pharmacy benefit network
  946  unless payments are withheld because of actual fraud on the part
  947  of the pharmacy or except as otherwise required by law.
  948         (6) Terminate the contract of, penalize, or disadvantage a
  949  pharmacist or pharmacy due to a pharmacist or pharmacy:
  950         (a) Disclosing information about pharmacy benefit manager
  951  practices in accordance with this act;
  952         (b) Exercising any of its prerogatives under this part; or
  953         (c) Sharing any portion, or all, of the pharmacy benefit
  954  manager contract with the office pursuant to a complaint or a
  955  query regarding whether the contract is in compliance with this
  956  act.
  957         (7)Fail to comply with the requirements in s. 626.8825 or
  958  s. 624.491.
  959         Section 13. Section 626.8828, Florida Statutes, is created
  960  to read:
  961         626.8828Investigations and examinations of pharmacy
  962  benefit managers; expenses; penalties.—
  963         (1)The office may investigate administrators who are
  964  pharmacy benefit managers and applicants for authorization as
  965  provided in ss. 624.307 and 624.317. The office shall review any
  966  referral made pursuant to s. 624.307(10) and shall investigate
  967  any referral that, as determined by the Commissioner of
  968  Insurance Regulation or his or her designee, reasonably
  969  indicates a possible violation of this part.
  970         (2)(a)The office shall examine the business and affairs of
  971  each pharmacy benefit manager at least biennially. The biennial
  972  examination of each pharmacy benefit manager must be a
  973  systematic review for the purpose of determining the pharmacy
  974  benefit manager’s compliance with all provisions of this part
  975  and all other laws or rules applicable to pharmacy benefit
  976  managers and must include a detailed review of the pharmacy
  977  benefit manager’s compliance with ss. 626.8825 and 626.8827. The
  978  first 2-year cycle for conducting biennial reviews begins
  979  January 1, 2025. By January 15, 2026, and each January 15
  980  thereafter, the office shall submit to the Governor, the
  981  President of the Senate, and the Speaker of the House of
  982  Representatives a report summarizing the results of the prior
  983  year’s examinations which includes detailed descriptions of any
  984  violations committed by each pharmacy benefit manager and
  985  detailed reporting of actions taken by the office against each
  986  pharmacy benefit manager for such violations. Beginning with the
  987  2027 report, and every 2 years thereafter, the report must
  988  document the office’s compliance with the examination timeframe
  989  requirements as provided in this paragraph. The office must
  990  specify the number and percentage of all examination completed
  991  within the timeframe.
  992         (b)The office also may conduct additional examinations as
  993  often as it deems advisable or necessary for the purpose of
  994  ascertaining compliance with this part and any other laws or
  995  rules applicable to pharmacy benefit managers or applicants for
  996  authorization.
  997         (c)If a referral made pursuant to s. 624.307(10)
  998  reasonably indicates a pattern or practice of violations of this
  999  part by a pharmacy benefit manager, the office must begin an
 1000  examination of the pharmacy benefit manager or include findings
 1001  related to such referral within an ongoing examination.
 1002         (d)Based on the findings of an examination that a pharmacy
 1003  benefit manager or an applicant for authorization has exhibited
 1004  a pattern or practice of knowing and willful violations of s.
 1005  626.8825 or s. 626.8827, the office may, pursuant to chapter
 1006  120, order a pharmacy benefit manager to file all contracts
 1007  between the pharmacy benefit manager and pharmacies or pharmacy
 1008  benefits plans or programs and any policies, guidelines, rules,
 1009  protocols, standard operating procedures, instructions, or
 1010  directives that govern or guide the manner in which the pharmacy
 1011  benefit manager or applicant conducts business related to such
 1012  knowing and willful violations for review and inspection for the
 1013  following 36-month period. Such documents are public records and
 1014  are not trade secrets or otherwise exempt from s. 119.07(1). As
 1015  used in this section, the term:
 1016         1.Contracts” means any contract to which s. 626.8825 is
 1017  applicable.
 1018         2.“Knowing and willful” means any act of commission or
 1019  omission which is committed intentionally, as opposed to
 1020  accidentally, and which is committed with knowledge of the act’s
 1021  unlawfulness or with reckless disregard as to the unlawfulness
 1022  of the act.
 1023         (e)Examinations may be conducted by an independent
 1024  professional examiner under contract to the office, in which
 1025  case payment must be made directly to the contracted examiner by
 1026  the pharmacy benefit manager examined in accordance with the
 1027  rates and terms agreed to by the office and the examiner. The
 1028  commission shall adopt rules providing for the types of
 1029  independent professional examiners who may conduct examinations
 1030  under this section, which types must include, but need not be
 1031  limited to, independent certified public accountants, actuaries,
 1032  investment specialists, information technology specialists, or
 1033  others meeting criteria specified by commission rule. The rules
 1034  must also require that:
 1035         1.The rates charged to the pharmacy benefit manager being
 1036  examined are consistent with rates charged by other firms in a
 1037  similar profession and are comparable with the rates charged for
 1038  comparable examinations.
 1039         2.The firm selected by the office to perform the
 1040  examination has no conflicts of interest which might affect its
 1041  ability to independently perform its responsibilities for the
 1042  examination.
 1043         (3)In making investigations and examinations of pharmacy
 1044  benefit managers and applicants for authorization, the office
 1045  and such pharmacy benefit manager are subject to all of the
 1046  following provisions:
 1047         (a)Section 624.318, as to the conduct of examinations.
 1048         (b)Section 624.319, as to examination and investigation
 1049  reports.
 1050         (c) Section 624.321, as to witnesses and evidence.
 1051         (d) Section 624.322, as to compelled testimony.
 1052         (e) Section 624.324, as to hearings.
 1053         (f) Any other provision of chapter 624 applicable to the
 1054  investigation or examination of a licensee under this part.
 1055         (4)(a) A pharmacy benefit manager must maintain an accurate
 1056  record of all contracts and records with all pharmacies and
 1057  pharmacy benefits plans or programs for the duration of the
 1058  contract, and for 5 years thereafter. Such contracts must be
 1059  made available to the office and kept in a form accessible to
 1060  the office.
 1061         (b) The office may order any pharmacy benefit manager or
 1062  applicant to produce any records, books, files, contracts,
 1063  advertising and solicitation materials, or other information and
 1064  may take statements under oath to determine whether the pharmacy
 1065  benefit manager or applicant is in violation of the law or is
 1066  acting contrary to the public interest.
 1067         (5)(a) Notwithstanding s. 624.307(3), each pharmacy benefit
 1068  manager and applicant for authorization must pay to the office
 1069  the expenses of the examination or investigation. Such expenses
 1070  include actual travel expenses, a reasonable living expense
 1071  allowance, compensation of the examiner, investigator, or other
 1072  person making the examination or investigation, and necessary
 1073  costs of the office directly related to the examination or
 1074  investigation. Such travel expenses and living expense
 1075  allowances are limited to those expenses necessarily incurred on
 1076  account of the examination or investigation and shall be paid by
 1077  the examined pharmacy benefit manager or applicant together with
 1078  compensation upon presentation by the office to such pharmacy
 1079  benefit manager or applicant of such charges and expenses after
 1080  a detailed statement has been filed by the examiner and approved
 1081  by the office.
 1082         (b) All moneys collected from pharmacy benefit managers and
 1083  applicants for authorization pursuant to this subsection shall
 1084  be deposited into the Insurance Regulatory Trust Fund, and the
 1085  office may make deposits from time to time into such fund from
 1086  moneys appropriated for the operation of the office.
 1087         (c) Notwithstanding s. 112.061, the office may pay to the
 1088  examiner, investigator, or person making such examination or
 1089  investigation out of such trust fund the actual travel expenses,
 1090  reasonable living expense allowance, and compensation in
 1091  accordance with the statement filed with the office by the
 1092  examiner, investigator, or other person, as provided in
 1093  paragraph (a).
 1094         (6) In addition to any other enforcement authority
 1095  available to the office, the office shall impose an
 1096  administrative fine of $5,000 for each violation of s. 626.8825
 1097  or s. 626.8827. Each instance of a violation of such sections by
 1098  a pharmacy benefit manager against each individual pharmacy or
 1099  prescription benefits plan or program constitutes a separate
 1100  violation. Notwithstanding any other provision of law, there is
 1101  no limitation on aggregate fines issued pursuant to this
 1102  section. The proceeds from any administrative fine shall be
 1103  deposited into the General Revenue Fund.
 1104         (7) Failure by a pharmacy benefit manager to pay expenses
 1105  incurred or administrative fines imposed under this section is
 1106  grounds for the denial, suspension, or revocation of its
 1107  certificate of authority.
 1108         Section 14. Section 626.89, Florida Statutes, is amended to
 1109  read:
 1110         626.89 Annual financial statement and filing fee; notice of
 1111  change of ownership; pharmacy benefit manager filings.—
 1112         (1) Each authorized administrator shall annually file with
 1113  the office a full and true statement of its financial condition,
 1114  transactions, and affairs within 3 months after the end of the
 1115  administrator’s fiscal year or within such extension of time as
 1116  the office for good cause may have granted. The statement must
 1117  be for the preceding fiscal year and must be in such form and
 1118  contain such matters as the commission prescribes and must be
 1119  verified by at least two officers of the administrator.
 1120         (2) Each authorized administrator shall also file an
 1121  audited financial statement performed by an independent
 1122  certified public accountant. The audited financial statement
 1123  must shall be filed with the office within 5 months after the
 1124  end of the administrator’s fiscal year and be for the preceding
 1125  fiscal year. An audited financial statement prepared on a
 1126  consolidated basis must include a columnar consolidating or
 1127  combining worksheet that must be filed with the statement and
 1128  must comply with the following:
 1129         (a) Amounts shown on the consolidated audited financial
 1130  statement must be shown on the worksheet;
 1131         (b) Amounts for each entity must be stated separately; and
 1132         (c) Explanations of consolidating and eliminating entries
 1133  must be included.
 1134         (3) At the time of filing its annual statement, the
 1135  administrator shall pay a filing fee in the amount specified in
 1136  s. 624.501 for the filing of an annual statement by an insurer.
 1137         (4) In addition, the administrator shall immediately notify
 1138  the office of any material change in its ownership.
 1139         (5) A pharmacy benefit manager shall also notify the office
 1140  within 30 days after any administrative, civil, or criminal
 1141  complaints, settlements, or discipline of the pharmacy benefit
 1142  manager or any of its affiliates which relate to a violation of
 1143  the insurance laws, including pharmacy benefit laws in any
 1144  state.
 1145         (6) A pharmacy benefit manager shall also annually submit
 1146  to the office a statement attesting to its compliance with the
 1147  network requirements of s. 626.8825.
 1148         (7) The commission may by rule require all or part of the
 1149  statements or filings required under this section to be
 1150  submitted by electronic means in a computer-readable form
 1151  compatible with the electronic data format specified by the
 1152  commission.
 1153         Section 15. Subsection (5) is added to section 627.42393,
 1154  Florida Statutes, to read:
 1155         627.42393 Step-therapy protocol.—
 1156         (5)This section applies to a pharmacy benefit manager
 1157  acting on behalf of a health insurer.
 1158         Section 16. Subsections (2), (3), and (4) of section
 1159  627.64741, Florida Statutes, are amended to read:
 1160         627.64741 Pharmacy benefit manager contracts.—
 1161         (2) In addition to the requirements of part VII of chapter
 1162  626, a contract between a health insurer and a pharmacy benefit
 1163  manager must require that the pharmacy benefit manager:
 1164         (a) Update maximum allowable cost pricing information at
 1165  least every 7 calendar days.
 1166         (b) Maintain a process that will, in a timely manner,
 1167  eliminate drugs from maximum allowable cost lists or modify drug
 1168  prices to remain consistent with changes in pricing data used in
 1169  formulating maximum allowable cost prices and product
 1170  availability.
 1171         (3) A contract between a health insurer and a pharmacy
 1172  benefit manager must prohibit the pharmacy benefit manager from
 1173  limiting a pharmacist’s ability to disclose whether the cost
 1174  sharing obligation exceeds the retail price for a covered
 1175  prescription drug, and the availability of a more affordable
 1176  alternative drug, pursuant to s. 465.0244.
 1177         (4) A contract between a health insurer and a pharmacy
 1178  benefit manager must prohibit the pharmacy benefit manager from
 1179  requiring an insured to make a payment for a prescription drug
 1180  at the point of sale in an amount that exceeds the lesser of:
 1181         (a) The applicable cost-sharing amount; or
 1182         (b) The retail price of the drug in the absence of
 1183  prescription drug coverage.
 1184         Section 17. Subsections (2), (3), and (4) of section
 1185  627.6572, Florida Statutes, are amended to read:
 1186         627.6572 Pharmacy benefit manager contracts.—
 1187         (2) In addition to the requirements of part VII of chapter
 1188  626, a contract between a health insurer and a pharmacy benefit
 1189  manager must require that the pharmacy benefit manager:
 1190         (a) Update maximum allowable cost pricing information at
 1191  least every 7 calendar days.
 1192         (b) Maintain a process that will, in a timely manner,
 1193  eliminate drugs from maximum allowable cost lists or modify drug
 1194  prices to remain consistent with changes in pricing data used in
 1195  formulating maximum allowable cost prices and product
 1196  availability.
 1197         (3) A contract between a health insurer and a pharmacy
 1198  benefit manager must prohibit the pharmacy benefit manager from
 1199  limiting a pharmacist’s ability to disclose whether the cost
 1200  sharing obligation exceeds the retail price for a covered
 1201  prescription drug, and the availability of a more affordable
 1202  alternative drug, pursuant to s. 465.0244.
 1203         (4) A contract between a health insurer and a pharmacy
 1204  benefit manager must prohibit the pharmacy benefit manager from
 1205  requiring an insured to make a payment for a prescription drug
 1206  at the point of sale in an amount that exceeds the lesser of:
 1207         (a) The applicable cost-sharing amount; or
 1208         (b) The retail price of the drug in the absence of
 1209  prescription drug coverage.
 1210         Section 18. Paragraph (e) is added to subsection (46) of
 1211  section 641.31, Florida Statutes, to read:
 1212         641.31 Health maintenance contracts.—
 1213         (46)
 1214         (e)This subsection applies to a pharmacy benefit manager
 1215  acting on behalf of a health maintenance organization.
 1216         Section 19. Subsections (2), (3), and (4) of section
 1217  641.314, Florida Statutes, are amended to read:
 1218         641.314 Pharmacy benefit manager contracts.—
 1219         (2) In addition to the requirements of part VII of chapter
 1220  626, a contract between a health maintenance organization and a
 1221  pharmacy benefit manager must require that the pharmacy benefit
 1222  manager:
 1223         (a) Update maximum allowable cost pricing information at
 1224  least every 7 calendar days.
 1225         (b) Maintain a process that will, in a timely manner,
 1226  eliminate drugs from maximum allowable cost lists or modify drug
 1227  prices to remain consistent with changes in pricing data used in
 1228  formulating maximum allowable cost prices and product
 1229  availability.
 1230         (3) A contract between a health maintenance organization
 1231  and a pharmacy benefit manager must prohibit the pharmacy
 1232  benefit manager from limiting a pharmacist’s ability to disclose
 1233  whether the cost-sharing obligation exceeds the retail price for
 1234  a covered prescription drug, and the availability of a more
 1235  affordable alternative drug, pursuant to s. 465.0244.
 1236         (4) A contract between a health maintenance organization
 1237  and a pharmacy benefit manager must prohibit the pharmacy
 1238  benefit manager from requiring a subscriber to make a payment
 1239  for a prescription drug at the point of sale in an amount that
 1240  exceeds the lesser of:
 1241         (a) The applicable cost-sharing amount; or
 1242         (b) The retail price of the drug in the absence of
 1243  prescription drug coverage.
 1244         Section 20. (1)This act establishes requirements for
 1245  pharmacy benefit managers as defined in s. 626.88, Florida
 1246  Statutes, including, without limitation, pharmacy benefit
 1247  managers in their performance of services for or otherwise on
 1248  behalf of a pharmacy benefits plan or program as defined in s.
 1249  626.8825, Florida Statutes, which includes coverage pursuant to
 1250  Titles XVIII, XIX, or XXI of the Social Security Act, 42 U.S.C.
 1251  ss. 1395 et seq., 1396 et seq., and 1397aa et seq., known as
 1252  Medicare, Medicaid, or any other similar coverage under a state
 1253  or Federal Government funded health plan, including the
 1254  Statewide Medicaid Managed Care program established pursuant to
 1255  part IV of chapter 409, Florida Statutes, and the state group
 1256  insurance program pursuant to part I of chapter 110, Florida
 1257  Statutes.
 1258         (2)This act is not intended, nor may it be construed, to
 1259  conflict with existing, relevant federal law.
 1260         (3)If any provision of this act or its application to any
 1261  person or circumstances is held invalid, the invalidity does not
 1262  affect other provisions or applications of this act which can be
 1263  given effect without the invalid provision or application, and
 1264  to this end the provisions of this act are severable.
 1265         Section 21. For the 2023-2024 fiscal year, the sum of
 1266  $980,705 in recurring funds and $146,820 in nonrecurring funds
 1267  from the Insurance Regulatory Trust Fund are appropriated to the
 1268  Office of Insurance Regulation, and 10 full-time equivalent
 1269  positions with associated salary rate of 644,877 are authorized,
 1270  for the purpose of implementing this act.
 1271         Section 22. This act shall take effect July 1, 2023.
 1272  
 1273  ================= T I T L E  A M E N D M E N T ================
 1274  And the title is amended as follows:
 1275         Delete everything before the enacting clause
 1276  and insert:
 1277                        A bill to be entitled                      
 1278         An act relating to prescription drugs; providing a
 1279         short title; amending s. 499.005, F.S.; specifying
 1280         additional prohibited acts related to the Florida Drug
 1281         and Cosmetic Act; amending s. 499.012, F.S.; providing
 1282         that prescription drug manufacturer and nonresident
 1283         prescription drug manufacturer permitholders are
 1284         subject to specified requirements; creating s.
 1285         499.026, F.S.; defining terms; requiring certain drug
 1286         manufacturers to notify the Department of Business and
 1287         Professional Regulation of reportable drug price
 1288         increases on a specified form on the effective date of
 1289         such increase; providing requirements for the form;
 1290         providing construction; requiring such manufacturers
 1291         to submit certain reports to the department by a
 1292         specified date each year; providing requirements for
 1293         the reports; authorizing the department to request
 1294         certain additional information from the manufacturer
 1295         before approving the report; requiring the department
 1296         to submit the forms and reports to the Agency for
 1297         Health Care Administration to be posted on the
 1298         agency’s website; prohibiting the agency from posting
 1299         on its website certain submitted information that is
 1300         marked as a trade secret; requiring the agency to
 1301         compile all information from the submitted forms and
 1302         reports and make it available to the Governor and the
 1303         Legislature upon request; prohibiting manufacturers
 1304         from claiming a public records exemption for trade
 1305         secrets for certain information provided in such forms
 1306         or reports; providing that department employees remain
 1307         protected from liability for releasing the forms and
 1308         reports as public records; authorizing the department,
 1309         in consultation with the agency, to adopt rules;
 1310         providing for emergency rulemaking; amending s.
 1311         624.307, F.S.; requiring the Division of Consumer
 1312         Services of the Department of Financial Services to
 1313         designate an employee as the primary contact for
 1314         consumer complaints involving pharmacy benefit
 1315         managers; requiring the division to refer certain
 1316         complaints to the Office of Insurance Regulation;
 1317         amending s. 624.490, F.S.; revising the definition of
 1318         the term “pharmacy benefit manager”; amending s.
 1319         624.491, F.S.; revising provisions related to pharmacy
 1320         audits; amending s. 626.88, F.S.; revising the
 1321         definition of the term “administrator”; defining the
 1322         term “pharmacy benefit manager”; amending s. 626.8805,
 1323         F.S.; providing a grandfathering provision for certain
 1324         pharmacy benefit managers operating as administrators;
 1325         providing a penalty for certain persons who do not
 1326         hold a certificate of authority to act as an
 1327         administrator on or after a specified date; requiring
 1328         the office to submit a report detailing specified
 1329         information to the Governor and the Legislature by a
 1330         specified date; providing additional requirements for
 1331         pharmacy benefit managers applying for a certificate
 1332         of authority to act as an administrator; exempting
 1333         pharmacy benefit managers from certain fees; amending
 1334         s. 626.8814, F.S.; requiring pharmacy benefit managers
 1335         to identify certain ownership affiliations to the
 1336         office; requiring pharmacy benefit managers to report
 1337         any change in such information to the office within a
 1338         specified timeframe; creating s. 626.8825, F.S.;
 1339         defining terms; providing requirements for certain
 1340         contracts between a pharmacy benefit manager and a
 1341         pharmacy benefits plan or program; requiring pharmacy
 1342         benefits plans and programs, beginning on a specified
 1343         date, to annually submit a certain attestation to the
 1344         office; providing requirements for certain contracts
 1345         between a pharmacy benefit manager and a participating
 1346         pharmacy; specifying requirements for certain
 1347         administrative appeal procedures that such contracts
 1348         with participating pharmacies must include; requiring
 1349         pharmacy benefit managers to submit reports on
 1350         submitted appeals to the office every 90 days;
 1351         creating s. 626.8827, F.S.; specifying prohibited
 1352         practices for pharmacy benefit managers; creating s.
 1353         626.8828, F.S.; authorizing the office to investigate
 1354         administrators that are pharmacy benefit managers and
 1355         certain applicants; requiring the office to review
 1356         certain referrals and investigate them under certain
 1357         circumstances; providing for biennial reviews of
 1358         pharmacy benefit managers; requiring the office to
 1359         submit an annual report of its examinations to the
 1360         Governor and the Legislature by a specified date;
 1361         providing requirements for the report, including
 1362         specified additional requirements for the biennial
 1363         reports; authorizing the office to conduct additional
 1364         examinations; requiring the office to conduct an
 1365         examination under certain circumstances; providing
 1366         procedures and requirements for such examinations;
 1367         defining the terms “contracts” and “knowing and
 1368         willful”; providing that independent professional
 1369         examiners under contract with the office may conduct
 1370         examinations of pharmacy benefit managers; requiring
 1371         the Financial Services Commission to adopt specified
 1372         rules; specifying provisions that apply to such
 1373         investigations and examinations; providing
 1374         recordkeeping requirements for pharmacy benefit
 1375         managers; authorizing the office to order the
 1376         production of such records and other specified
 1377         information; authorizing the office to take statements
 1378         under oath; requiring pharmacy benefit managers and
 1379         applicants subjected to an investigation or
 1380         examination to pay the associated expenses; specifying
 1381         covered expenses; providing for collection of such
 1382         expenses; providing for the deposit of certain moneys
 1383         into the Insurance Regulatory Trust Fund; authorizing
 1384         the office to pay examiners, investigators, and other
 1385         persons from such fund; providing administrative
 1386         penalties; providing grounds for administrative action
 1387         against a certificate of authority; amending s.
 1388         626.89, F.S.; requiring pharmacy benefit managers to
 1389         notify the office of specified complaints,
 1390         settlements, or discipline within a specified
 1391         timeframe; requiring pharmacy benefit managers to
 1392         annually submit a certain attestation statement to the
 1393         office; amending s. 627.42393, F.S.; providing that
 1394         certain step-therapy protocol requirements apply to a
 1395         pharmacy benefit manager acting on behalf of a health
 1396         insurer; amending ss. 627.64741 and 627.6572, F.S.;
 1397         conforming provisions to changes made by the act;
 1398         amending s. 641.31, F.S.; providing that certain step
 1399         therapy protocol requirements apply to a pharmacy
 1400         benefit manager acting on behalf of a health
 1401         maintenance organization; amending s. 641.314, F.S.;
 1402         conforming a provision to changes made by the act;
 1403         providing legislative intent, construction, and
 1404         severability; providing appropriations and authorizing
 1405         positions; providing an effective date.