SB 642 – California

Status: Inactive / Dead
Year Introduced: 2019

Pharmacy benefit management: Prescription Acquisition and Adjudication Agency – This bill would, on and after July 1, 2021, prohibit a health care service plan or a health insurer from entering into, renewing, or extending a contract for pharmacy benefit manager services, as defined. This bill would create the Prescription Acquisition and Adjudication Agency, and would create an advisory board for that agency, as specified. The bill would require a division of the agency to offer pharmacy benefit manager services to health care service plans and health insurers, including adjudicated claim processing, negotiations for pharmaceutical discounts, and the creation of formularies for each plan or insurer, as specified. This bill would additionally require a separate division of the agency to negotiate with pharmaceutical manufacturers for discounts and rebates for those plans or insurers, and would require the agency to develop a closed bidding process for those negotiations. The bill would require an agreement between the agency and a health care service plan or health insurer to include provisions granting 10% of any rebate or of the difference between the market value and the price negotiated by the agency, or 100% of the rebate or difference if the agreement is with a Medi-Cal managed care plan, to be paid to the agency, and deposited in to the Pharmaceutical Discount Fund, and would make those funds available, upon appropriation by the Legislature, to the agency to fund its costs or for other programs to lower health care costs in the state.

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