SB 396 — Revises provisions relating to the purchasing of prescription drugs. (BDR 38-443)

(ReprintedSenate withBill amendmentsNo. adopted on April 16, 2021) FIRST REPRINT S.B.

396396–Committee SENATEon BILLHealth NOand .Human Services CHAPTER..........

396–COMMITTEE ON H EALTH AND HUMAN SERVICES (O NB EHALF OF THE C OMMITTEE TO C ONDUCT AN INTERIM STUDY CONCERNING THE COSTS OF PRESCRIPTION DRUGS ) M ARCH 26, 2021 ____________ Referred to Committee on Health and Human Services SUMMARY—Revises provisions relating to the purchasing of prescription drugs.

(BDR 38-443) FISCAL NOTE:

Effect on Local Government:

No.

Effect on the State:

No.

~ EXPLANATION – Matter in bolded italics is new;

matter between brackets [omitted material] is material to be omitted.

exempting a contract between the Department of Health and Human Services and a pharmacy benefit manager or health maintenance organization entered into pursuant to such an agreement from certain requirements;

(NRS 333.435) Sections 3.3 and 3.6 of this bill additionally authorize public agencies in this State to enter into agreements for the purchase of prescriptionservices drugs,with pharmaceuticalprivate services,entities within or medicaloutside supplies and related bill authorize the Department of Health and Human Services to enter into such an of this agreementState. for the purchase of prescription drugs for Medicaid or the Children’s Health Insurance Program.

-Sections *SB396_R1*1 –and 2 –of Existingthis lawbill imposesauthorize certain requirements concerning transparency, rebates and auditing on any contract between the Department andof aHealth pharmacy benefit payments and rebatesHuman forServices prescriptionto drugsenter orinto othersuch servicesan andagreement paymentsfor relating to the provisionpurchase of prescription drugs under the State Plan for Medicaid andor the Children’s Health Insurance Program.

(NRSEXPLANATION 422.4053,– 422.4056)Matter Sectionsin 2bolded anditalics 3is ofnew; this bill exempt a contract between the Department and a pharmacy benefit manager or health maintenance organization entered into pursuant to an agreement for the collaborative purchasing of prescription drugs from those requirements.

matter between brackets [omitted material] is material to be omitted.

2.- 81st Session (2021) – 2 – prescription drugs which must be excluded from any restrictions that are imposed by the Medicaid program on drugs that are on the list of preferred prescription drugs established pursuant to subsection 1.

The Department shall, by regulation, establish a list of prescription drugs which must be excluded from any restrictions that are imposed by the Medicaid program on drugs that are on the list of preferred prescription drugs established pursuant to subsection 1.

- *SB396_R1* – 3 – 3.

The regulations must provide that the Board makes the final determinationdet(a) of:Whether a class of therapeutic prescription drugs is included on the list of preferred prescription drugs and is excluded from any restrictions that are imposed by the Medicaid program on drugs that are on the list of preferred prescription drugs;

(a) Whether a class of therapeutic prescription drugs is included on the list of preferred prescription drugs and is excluded from any restrictions that are imposed by the Medicaid program on drugs that are on the list of preferred prescription drugs;

The list of preferred prescription drugs established pursuant to subsection 1 must include, without limitation, any prescription drug determined by the Board to be essential for treating sickle cell disease and its variants.

- 81st Session (2021) – 3 – (a) Compile a report concerning the agreements negotiated pursuant to paragraph (b) of subsection 1 and contracts entered into pursuant to NRS 422.4053 which must include, without limitation, the financial effects of obtaining prescription drugs through those agreements and contracts, in total and aggregated separately for agreements negotiated by the Department, contracts with aaely for pharmacy benefit manager , [and] contracts with a health maintenance organization [;] and contracts with public and private entities from this State, the District of Columbia and other states and territories of the United States;

Except as otherwise provided in subsection 2, the Department shall directly manage, direct and coordinate all - *SB396_R1* – 4 – payments and rebates for prescription drugs and all other services and payments relating to the provision of prescription drugs under the State Plan for Medicaid and the Children’s Health Insurance Program.

(b) A health maintenance organization pursuant to NRS 422.273 for the provision of any of the services described in subsection 1 for recipients of Medicaid or recipients of insurance through the Children’s Health Insurance Program who receive coverage through a Medicaid managed care program.

If such a contract requires the Department to enter into a contract with a pharmacy benefit manager or health maintenance organization for the provision of any of the services described in subsection 1, the contract is not subject to the provisions of subsection 3, paragraph (b) of subsection 4 or NRS 422.4056.

[A]A Except as otherwise provided in paragraph (c) of subsection 2, a contract entered into pursuant to paragraph (a) or (b) of subsection 2 must:

and (b) Require the pharmacy benefit manager or health maintenance organization, as applicable, to disclose to the Department any information relating to the services covered by the contract, including, without limitation, information concerning dispensing fees, measures for the control of costs, rebates collected and paid and any fees and charges imposed by the pharmacy benefit - 81st Session (2021) – 4 – manager or health maintenance organization pursuant to the contract.

(a) Paragraph (a) of subsection 2 may require the pharmacy benefit manager to provide the entire amount of any rebatesrebatescy received for the purchase of prescription drugs, including, without limitation, rebates for the purchase of prescription drugs by an entity other than the Department, to the Department.

(b) Paragraph (b) of subsection 2 must , except as otherwise provided in paragraph (c) of subsection 2, require the health maintenance organization to provide to the Department the entire amount of any rebates received for the purchase of prescription drugs, including, without limitation, rebates for the purchase of - *SB396_R1* – 5 – prescription drugs by an entity other than the Department, less an administrative fee in an amount prescribed by the contract.

NRS(Deleted 422.4056by isamendment.) herebySec. amended to read as follows:

422.4056 1.

[Any] Except as otherwise provided in paragraph (c) of subsection 2 of NRS 422.4053, any contract between the Department and a pharmacy benefit manager or health maintenance organization entered into pursuant to NRS 422.4053 must require the pharmacy benefit manager or health maintenance organization, as applicable, to:

(a) Submit to and cooperate with an annual audit by the Department to evaluate the compliance of the pharmacy benefit manager or health maintenance organization with the agreement and generally accepted accounting and business practices.

The audit must analyze all claims processed by the pharmacy benefit manager or health maintenance organization pursuant to the agreement.

(b) Obtain from an independent accountant, at the expense of the pharmacy benefit manager or health maintenance organization, as applicable, an annual audit of internal controls to ensure the integrity of financial transactions and claims processing.

2.

The Department shall post the results of any audit conducted pursuant to paragraph (a) of subsection 1 on an Internet website maintained by the Department.

Sec.

Any agency of this State when acting jointly with any other public agency may exercise all the powers, privileges and authority conferred by NRS 277.080 to 277.180, inclusive, upon a public agency.agency.nferred by NRS 2.

2.