House File 489 H-1210 Amend House File 489 as follows: 1 1. By striking everything after the enacting clause and 2 inserting: 3 < Section 1. NEW SECTION . 510C.1 Definitions. 4 As used in this chapter unless the context otherwise 5 requires: 6 1. “Administrative fees” means a fee or payment, other than 7 a rebate, under a contract between a pharmacy benefit manager 8 and a pharmaceutical drug manufacturer in connection with the 9 pharmacy benefit manager’s management of a health carrier’s 10 prescription drug benefit, that is paid by a pharmaceutical 11 drug manufacturer to a pharmacy benefit manager or is retained 12 by the pharmacy benefit manager. 13 2. “Aggregate retained rebate percentage” means the 14 percentage of all rebates received by a pharmacy benefit 15 manager that is not passed on to the pharmacy benefit manager’s 16 health carrier clients. 17 3. “Commissioner” means the commissioner of insurance. 18 4. “Covered person” means the same as defined in section 19 514J.102. 20 5. “Formulary” means a complete list of prescription drugs 21 eligible for coverage under a health benefit plan. 22 6. “Health benefit plan” means the same as defined in 23 section 514J.102. 24 7. “Health carrier” means the same as defined in section 25 514J.102. 26 8. “Health carrier administrative service fee” means a fee 27 or payment under a contract between a pharmacy benefit manager 28 and a health carrier in connection with the pharmacy benefit 29 manager’s administration of the health carrier’s prescription 30 drug benefit that is paid by a health carrier to a pharmacy 31 benefit manager or is otherwise retained by a pharmacy benefit 32 manager. 33 9. “Pharmacy benefit manager” means a person who, pursuant 34 to a contract or other relationship with a health carrier, 35 -1- HF489.1783 (1) 88 (amending this HF 489 to CONFORM to SF 563) ko/lh 1/ 4 #1.

either directly or through an intermediary, manages a 1 prescription drug benefit provided by the health carrier. 2 10. “Prescription drug benefit” means a health benefit 3 plan providing for third-party payment or prepayment for 4 prescription drugs. 5 11. “Rebate” means all discounts and other negotiated price 6 concessions paid directly or indirectly by a pharmaceutical 7 manufacturer or other entity, other than a covered person, 8 in the prescription drug supply chain to a pharmacy benefit 9 manager, and which may be based on any of the following: 10 a. A pharmaceutical manufacturer’s list price for a 11 prescription drug. 12 b. Utilization. 13 c. To maintain a net price for a prescription drug for 14 a specified period of time for the pharmacy benefit manager 15 in the event the pharmaceutical manufacturer’s list price 16 increases. 17 d. Reasonable estimates of the volume of a prescribed drug 18 that will be dispensed by a pharmacy to covered persons. 19 Sec. 2. NEW SECTION . 510C.2 Annual report to the 20 commissioner. 21 1. Each pharmacy benefit manager shall provide a report 22 annually by February 15 to the commissioner that contains 23 all of the following information regarding prescription drug 24 benefits provided to covered persons of each health carrier 25 with whom the pharmacy manager has contracted during the prior 26 calendar year: 27 a. The aggregate dollar amount of all rebates received by 28 the pharmacy benefit manager. 29 b. The aggregate dollar amount of all administrative fees 30 received by the pharmacy benefit manager. 31 c. The aggregate dollar amount of all health carrier 32 administrative service fees received by the pharmacy benefit 33 manager. 34 d. The aggregate dollar amount of all rebates received by 35 -2- HF489.1783 (1) 88 (amending this HF 489 to CONFORM to SF 563) ko/lh 2/ 4

the pharmacy benefit manager that the pharmacy benefit manager 1 did not pass through to the health carrier. 2 e. The aggregate amount of all administrative fees received 3 by the pharmacy benefit manager that the pharmacy benefit 4 manager did not pass through to the health carrier. 5 f. The aggregate retained rebate percentage as calculated by 6 dividing the dollar amount in paragraph “d” by the dollar amount 7 in paragraph “a” . 8 g. Across all health carrier clients with whom the pharmacy 9 manager was contracted, the highest and the lowest aggregate 10 retained rebate percentages. 11 2. a. A pharmacy benefit manager shall provide the 12 information pursuant to subsection 1 to the commissioner in a 13 format approved by the commissioner that does not directly or 14 indirectly disclose any of the following: 15 (1) The identity of a specific health carrier. 16 (2) The price charged by a specific pharmaceutical 17 manufacturer for a specific prescription drug or for a class 18 of prescription drugs. 19 (3) The amount of rebates provided for a specific 20 prescription drug or class of prescription drugs. 21 b. Information provided under this section by a pharmacy 22 benefit manager to the commissioner that may reveal the 23 identity of a specific health carrier, the price charged 24 by a specific pharmaceutical manufacturer for a specific 25 prescription drug or class of prescription drugs, or the amount 26 of rebates provided for a specific prescription drug or class 27 of prescription drugs shall be considered a confidential record 28 and be recognized and protected as a trade secret pursuant to 29 section 22.7, subsection 3. 30 3. The commissioner shall publish, within sixty calendar 31 days of receipt, the nonconfidential information received by 32 the commissioner on a publicly accessible internet site. The 33 information shall be made available to the public in a format 34 that complies with subsection 2, paragraph “a” . 35 -3- HF489.1783 (1) 88 (amending this HF 489 to CONFORM to SF 563) ko/lh 3/ 4

Sec. 3. NEW SECTION . 510C.3 Rules. 1 The commissioner of insurance shall adopt rules pursuant to 2 chapter 17A as necessary to administer this chapter. 3 Sec. 4. NEW SECTION . 510C.4 Enforcement. 4 The commissioner may take any action within the 5 commissioner’s authority to enforce compliance with this 6 chapter. 7 Sec. 5. NEW SECTION . 510C.5 Applicability. 8 This chapter is applicable to a health benefit plan that is 9 delivered, issued for delivery, continued, or renewed in this 10 state on or after January 1, 2020. > 11 2. Title page, by striking lines 1 through 3 and inserting 12 < An Act relating to pharmacy benefit managers and information 13 related to the management of prescription drug benefits, and 14 including applicability provisions. > 15 ______________________________ BEST of Carroll -4- HF489.1783 (1) 88 (amending this HF 489 to CONFORM to SF 563) ko/lh 4/ 4 #2.