SB 389 — Revises provisions relating to the administration of pharmacy benefits under Medicaid and certain other health plans. (BDR 38-240)

(c) The methodology for reimbursement to pharmacies owned and contracted by a health care facility that is registered as a covered entity pursuant to 42 U.S.C.

(d) Dispensing fees paid to pharmacies and pharmacists for providing benefits under a contract entered into pursuant to - *SB389_R1* – 5 – subsection 1 of NRS 422.4053 or paragraph (a) of subsection 2 of NRS 422.4053.

In establishing those dispensing fees, the Department may consider applicable guidance promulgated by the Centers for Medicare and Medicaid Services of the United States Department of Health and Human Services.

(e) A requirement that,that to the extent authorized by federal law, providers must periodically submit to the Department or state pharmacy benefit manager data from claims, as prescribed by the DepartmentDepartment, relating to the actual priceacquisition paidcosts byof thedrugs providerpurchased forby the purchaseproviders of a drug from apharmacies pharmacy owned or contracted by a health care facilityfacilities that isare registered as a covered entityentities pursuant to 42 U.S.C.

To the extent authorized by federal law, the dispensing fees established pursuant to paragraph (d) of subsection 1 may vary by pharmacy type, including, without limitation, rural and independently owned pharmacies, pharmacies owned by a corporation operating in multiple states and pharmacies owned and contracted by a health care facility that is registered as a covered entity pursuant to 42 U.S.C.

- 83rd Session (2025) – 5 – 3.

(a) Generate the maximum amount of savings for the State withwit(b) respectProvide torates of reimbursement for drugs which are based on the actual cost of acquiring a drug, to the extent that doing so would result in a reduction of expenditures on prescription drugs;drugs by the Department;

(b)and Provide(c) ratesUtilize of reimbursement for drugs which are based on the actualNevada costAverage ofAcquisition acquiringCost aprice drug,benchmark tofor the extentpurposes thatset doingforth so would result in aparagraph reduction(b), ofif expendituresestablished onpursuant prescriptionto drugssubsection by4. the Department;

and (c) Utilize the Nevada Average Drug Acquisition Cost price benchmark for the purposes set forth in paragraph (b), if established pursuant to subsection 4.

Except as otherwise provided in this subsection, the Department shall establish a pricing benchmark to be known as Nevada Average Drug Acquisition Cost to measure the average, actual cost of prescription drugs purchased by pharmacies and other providers in this State directly from manufacturers and wholesalers of prescription drugs.drugs or from any other sources.

The Department shall establish the Nevada Average Drug Acquisition Cost only if, in the determination of the Department, the development of the benchmark would result in a reduction of spending on prescription drugs by the Department or otherwise result in a net reduction of expenditures by the State.

To facilitate the establishment of the Nevada Average Drug Acquisition Cost price benchmark, the Department may:

- *SB389_R1* – 6 – (a) Establish a voluntary survey tothat must be completed periodically by retail pharmacies and other providers who purchase prescription drugs directly from manufacturers or wholesalers of prescription drugs;

(b) Utilize any data provided to the Department by the state pharmacy benefit manager or a health management organizationorganizationate with which the Department has contracted pursuant to NRS 422.4053;

(d) Utilize methodologies similar to those established by the Centers for Medicare and Medicaid Services of the United States Department of Health and Human Services with respect to the National Average Drug Acquisition Cost pricing benchmark;

On or before February 1 of each calendarodd-numbered year occurring after the establishment of the Nevada Average Drug- Acquisition83rd Session (2025) – 6 – shall:ition Cost price benchmark, if established, the Department shall:(a) Compile a report concerning the actual or estimated savings generated for the State during the immediately preceding two calendar years from the establishment and utilization of the Nevada Average Acquisition Cost price benchmark;

(a)and Compile(b) aSubmit report concerning the actualreport orcompiled estimatedpursuant savingsto generatedparagraph for(a) to the StateDirector duringof the immediatelyLegislative precedingCounsel calendarBureau yearfor fromtransmittal to the establishmentnext andregular utilizationsession of the NevadaLegislature. Average Drug Acquisition Cost price benchmark;

and (b) Submit the report compiled pursuant to paragraph (a) to the Director of the Legislative Counsel Bureau for transmittal to:

(1) In odd-numbered years, the next regular session of the Legislature;

and (2) In even-numbered years, the Interim Finance Committee.

As used in this section,section: “provider” means a person or entity who participates in Medicaid as a provider of goods or services.

(a) “Actual acquisition cost” has the meaning ascribed to it in C.F.R.

§ 447.502.

(b) “Provider” means a person or entity who participates in Medicaid as a provider of goods or services.

(a) Each contract for the provision of benefits under the contract entered into pursuant to NRS 422.4053 between the state pharmacy benefit manager and a pharmacy or an entity thatthate state contracts on behalf of such a pharmacy;

The Department shall review each submission received pursuant to subsection 1 and approve or deny the contract, - *SB389_R1* – 7 – revision, suspension or termination, as applicable.

The Department may change a payment arrangement between the Department and a Medicaid managed care organization, the Department and the state pharmacy benefit manager or a Medicaid managed care organization and the state pharmacy benefit manager in order to comply with federal or state law or regulations or any other agreement between the Department and the Federal Government.

or - 83rd Session (2025) – 7 – (b) The reimbursement methodologies and dispensing fees established by the Department pursuant to subsection 1 of section 5 of this act.

Any contract entered into by the state pharmacy benefit managermanSec. in violation of subsection 4 is void and unenforceable.

Sec.

NRSviNRS 422.001 is hereby amended to read as follows:follows:.

 Nothing in this section shall be construed as exempting a federally-qualified health center, the University Medical Center of Southern Nevada or the University of Nevada School of Medicine from the requirements for contracting with the health maintenance organization.org2.izaDuring the development and implementation of any Medicaid managed care program, the Department shall cooperate with the University of Nevada School of Medicine by assisting in the provision of an adequate and diverse group of patients upon which the school may base its educational programs.

- *SB389_R1* – 8 – 2.

During the development and implementation of any Medicaid managed care program, the Department shall cooperate with the University of Nevada School of Medicine by assisting in the provision of an adequate and diverse group of patients upon which the school may base its educational programs.

- 83rd Session (2025) – 8 – 5.

A Medicaid managed care program must require each health maintenance organization that enters into a contract with the Department pursuant to this section to contract with and,and except as otherwise provided by paragraph (a) of subsection 2 of NRS 422.4053, utilize the state pharmacy benefit manager for the purpose of administering all pharmacy benefits for recipients of Medicaid who receive pharmacy benefits through the health maintenancemaintenanceid organization.

(a) “Federally-qualified health center” has the meaning ascribed to (b) “Health maintenance organization” has the meaning ascribed to it in 42NRS U.S.C.695C.030.

§(c) 1396d(l)(2)(B).“Managed care organization” has the meaning ascribed to it in NRS 695G.050.

(b) “Health maintenance organization” has the meaning ascribed to it in NRS 695C.030.

- *SB389_R1* – 9 – (c) “Managed care organization” has the meaning ascribed to it in NRS 695G.050.

(a) By] , by regulation, develop a list of preferred prescription drugs to be used for the Medicaid program and the Children’s Health Insurance Program, and each public or nonprofit health benefit plan that elects to use the list of preferred prescription drugs as- its83rd formularySession pursuant(2025) to– NRS9 287.012,– 287.0433[; or 687B.407 .

[;and formulary pursuant to NRS 287.012, 287.0433 or 687B.407 .

and (b) Negotiate and enter into agreements to purchase the drugs included on the list of preferred prescription drugs on behalf of the health benefit plans described in paragraph (a) or enter into a contract pursuant to NRS 422.4053 with a pharmacy benefit manager, health maintenance organization or one or more public or private entities in this State, the District of Columbia or other states or territories of the United States, as appropriate, to negotiate such agreements.] 2.

(a) Prescription drugs that are prescribed for the treatment of the humanantiretroviral immunodeficiencymedications;s, virus, including, without limitation, antiretroviral(b) medications;Antirejection medications for organ transplants;

(b) Antirejection medications for organ transplants;

- *SB389_R1* – 10 – (b) Which therapeutically equivalent prescription drugs will be reviewed for inclusion on the list of preferred prescription drugs and for exclusion from any restrictions that are imposed by the Medicaid program on drugs that are on the list of preferred prescription drugs;

(a)- Any83rd prescriptionSession drug(2025) determined– by10 the– Board to be essential for treating sickle cell disease and its variants;

(3) Used to support safe withdrawal from substance use disorder;

ororsed to support safe withdrawal from substance use (4) In the same class as a drug on the list of preferred prescription drugs;

-or *SB389_R1*atypical –antipsychotic 11medication –or 7.anticonvulsant medication that is not on the list of preferred prescription drugs upon the demonstrated therapeutic failure of one drug on that list to adequately treat the condition of a recipient of Medicaid.

The Medicaid program must automatically cover any typical or atypical antipsychotic medication or anticonvulsant medication that is not on the list of preferred prescription drugs upon the demonstrated therapeutic failure of one drug on that list to adequately treat the condition of a recipient of Medicaid.

(a) Compile a report concerning the [agreements negotiated pursuant to paragraph (b) of subsection 1 and contracts] contract entered into pursuant to subsection 1 of NRS 422.4053 with the state pharmacy benefit manager and any contracts entered into pursuant- to83rd subsectionSession 2(2025) of– NRS11 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 a pharmacy benefi]tbenefit [manager,manager, 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;] each such contract;

The Department [or a] , the state pharmacy benefit manager or a health maintenance organization with which the Department contracts pursuant to NRS 422.4053 to manage prescription drug benefits shall allow a recipient of Medicaid who has been diagnosed with stage 3 or 4 cancer or the attendingattendingid who practitioner of the recipient to apply for an exemption from step therapy that would otherwise be required pursuant to NRS 422.403 to instead use a prescription drug prescribed by the attending practitioner to treat the cancer or any symptom thereof of the recipient of Medicaid.

(c)physician, Requireregistered thenurse reviewor ofpharmacist.ion each application by at least one physician,2. registered nurse or pharmacist.

- *SB389_R1* – 12 – 2.

or - 83rd Session (2025) – 12 – (II) Taken the requested drug for a clinically appropriate amount of time to establish stability in relation to the cancer and the guidelines of the prescribing practitioner;

(b) Must not include any information or supporting documentation that is not necessary to make a determination aboutaboutng the application.

(a) Make a determination concerning the application if the application is complete, or request additional information or documentation necessary to complete the application not later than 72 hours after receiving the application;

5.maintenance organization, as applicable, shall disclose to a recipient or attending practitioner who submits an application for an exemption from step therapy pursuant to subsection 1 the qualifications of each person who will review the application.

The Department, state pharmacy benefit manager or health maintenance organization, as applicable, shall disclose to a recipient or attending practitioner who submits an application for an exemption from step therapy pursuant to subsection 1 the qualifications of each person who will review the application.

- *SB389_R1* – 13 – (a) Any treatment otherwise required under the step therapy or any drug in the same pharmacological class or having the same mechanism of action as the drug for which the exemption is requested has not been effective at treating the cancer or symptom of the recipient when prescribed in accordance with clinical indications, clinical guidelines or other peer-reviewed evidence;

(b)- Delay83rd ofSession effective(2025) treatment– would13 have– severe or irreversible consequences for the recipient and the treatment otherwise required under the step therapy is not reasonably expected to be effective based on the physical or mental characteristics of the recipient and the known characteristics of the treatment;

If the Department, state pharmacy benefit manager or health maintenance organization, as applicable, approves an application for an exemption from step therapy pursuant to this section, the StateStateor must pay the nonfederal share of the cost of the prescription drug to which the exemption applies.

The Department, state pharmacy benefit manager or health maintenance organization, as applicable, shall provide a report of the review to the recipient.recipient.pplicable, shall 8.

8.The Department , [and any] the state pharmacy benefit manager [or] and each health maintenance organization with which the Department contracts pursuant to NRS 422.4053 [to manage prescription drug benefits] shall post in an easily accessible location on an Internet website maintained by the Department , state pharmacy benefit manager or health maintenance organization, as applicable, a form for requesting an exemption pursuant to this section.

The- Department83rd ,Session [and(2025) any]– the14 state– pharmacypractitioner, benefitas managerdefined [or]in andNRS each639.0125, healthwho maintenancehas organizationprimarymeans with which the Departmentresponsibility contractsfor pursuantthe totreatment NRSof 422.4053 [to manage prescription drug benefits] shall post in an easily accessible location - *SB389_R1* – 14 – on an Internet website maintained by the Departmentcancer , state pharmacy benefit manager or healthany maintenancesymptom organization,of assuch applicable,cancer of a formrecipient. for requesting an exemption pursuant to this section.

9.

As used in this section, “attending practitioner” means the practitioner, as defined in NRS 639.0125, who has primary responsibility for the treatment of the cancer or any symptom of such cancer of a recipient.

and (b) Enter into a contract with the state pharmacy benefit manager chosen pursuant to paragraph (a) to, except as otherwise provided in subsection 2, manage, direct and coordinate [all] payments and rebates for any prescription drugs included on the list of preferred prescription drugs developed pursuant to NRS 422.4025, any other prescription drugs listed in the contract and all other services and payments relating to the provision of such prescription drugs under the State Plan for Medicaid , [and] the Children’s Health Insurance Program [.] and the other health the benefit plans described in subsection 1 of NRS 422.4025.

The Department may enter into a contract withwith: :

(b)] A health maintenance organization pursuant to NRS 422.273 for the provision of any of the services described in subsection 1 withthrough respect to those prescription drugs which are not subject to the contract entered into pursuant to subsection 15 whereof suchNRS services422.273 are provided for recipients of Medicaid or recipients of insurance through the Children’s Health Insurance Program who receive coverage through a Medicaid managed care program.

[(c)] (b) One or more public or private entities from this State, the District of Columbia or other states or territories of the United States for the collaborative purchasing of prescription drugs in accordanceacc3.da[A] withThe subsectioncontract 3entered ofinto NRSpursuant 277.110.to [paragraph (a) or (b) of] subsection [2] 1 must:

3.

[A] The contract entered into pursuant to [paragraph (a) or (b) of] subsection [2] 1 must:

(b) Require the state 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 - *SB389_R1* – 15 – dispensing fees, measures for the control of costs, rebates collected and paid , [and] any fees and charges imposed by the state pharmacy benefit- manager83rd [orSession health(2025) maintenance– organization]15 pursuant– to the contract [;] and any other sources of payment received by the state pharmacy benefit manager for prescription drugs covered by the contract;

(e) Require the state pharmacy benefit manager to negotiate and enter into agreements to purchase the drugs included on the list of preferred prescription drugs developed pursuant to NRS 422.4025, except where those drugs are purchased through a contract entered into pursuant to subsection 2;

andrough a (f) Require the state pharmacy benefit manager to provide the entire amount of any rebates 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 DepartmentDepartment. [.

(b)[(b) Paragraph (b) of subsection 2 must 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 prescription drugs by an entity other than the Department, less an administrative fee in an amount prescribed by the contract.

The Department shall adopt policies prescribing the maximum amount of such an administrative fee.];fee.] 4.

andIn (g)addition Establishto ameeting fiduciarythe dutyrequirements betweenof thesubsection Department3, anda the state pharmacy benefit manager.manager from:bsection 1 must prohibit the (a) Using spread pricing;

4.(b) Paying a pharmacy a professional dispensing fee for a drug which is less than the applicable dispensing fee established pursuant to section 5 of this act, if the applicable dispensing fee established pursuant to that section has been included in the State Plan for Medicaid and approved by the Centers for Medicare and Medicaid Services of the United States Department of Health and Human Services;

In- addition83rd toSession meeting(2025) the– requirements16 of– subsection(c) 3,Creating, amodifying, contractimplementing enteredor intoindirectly pursuantestablishing any fee to subsectionbe 1imposed mustupon prohibita pharmacy, a pharmacist or a recipient of benefits under the statecontract pharmacywithout benefitfirst managerseeking from:and obtaining written approval from the Department;

(a)obtain Usinga spreadspecialty pricing;drug from a specialty pharmacy owned by oro otherwise associated with the state pharmacy benefit manager;

(b) Paying a pharmacy a professional dispensing fee for a drug which is less than the applicable dispensing fee established pursuant to section 5 of this act;

(c) Creating, modifying, implementing or indirectly establishing any fee to be imposed upon a pharmacy, a pharmacist - *SB389_R1* – 16 – or a recipient of benefits under the contract without first seeking and obtaining written approval from the Department;

(d) Requiring a recipient of benefits under the contract to obtain a specialty drug from a specialty pharmacy owned by or otherwise associated with the state pharmacy benefit manager;

and (d) 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 prescription drugs by an entity other than the Department.

- 83rd Session (2025) – 17 – Sec.

[Any] The contract between the Department and [a] the state pharmacy benefit manager [or] and any contract between the Department and a health maintenance organization entered into pursuant to NRS 422.4053 must require the state - *SB389_R1* – 17 – pharmacy benefit manager or health maintenance organization, as applicable, to:

(b) Assess any fee, chargeback, clawback or adjustment against a covered entity or contract pharmacy on the basis that the covered entity or contract pharmacy dispenses a 340B drug or otherwise limit the ability of a covered entity or contract pharmacy to receive the full benefit of purchasing the 340B drug at or below the ceiling price, as calculated pursuant to 42 U.S.C.

(e) Restrict the methods by which a covered entity or contract pharmacy may dispense or deliver a 340B drug or the entity through which- a83rd coveredSession entity(2025) may– dispense18 or– deliver such a drug in a manner that does not apply to drugs that are not 340B drugs;

- *SB389_R1* – 18 – (a) Apply to [a] the state pharmacy benefit manager [that has entered into a contract with the Department of Health and Human Services pursuant to NRS 422.4053] when the state pharmacy benefit manager is managing prescription drug benefits under Medicaid, including, without limitation, where such benefits are delivered through a Medicaid managed care organization.

(1) Prevent duplicate discounts or rebates where prohibited by 42 U.S.C.(2) Ensure the financial stability of the Medicaid program, including, without limitation, by including or enforcing provisions in [any] the contract with [a] the state pharmacy benefit manager .

§ 256b(a)(5)(A);

or (2) Ensure the financial stability of the Medicaid program, including, without limitation, by including or enforcing provisions in [any] the contract with [a] the state pharmacy benefit manager .

§ 256b(a)(4).2(e) “Medicaid managed care organization” has the meaning ascribed to it in 42 U.S.C.

(e) “Medicaid managed care organization” has the meaning ascribed to it in 42 U.S.C.

The initial contract between the Department of Health and Human Services and the state pharmacy benefit manager - 83rd Session (2025) – 19 – entered into pursuant to NRS 422.4053, as amended by section 12 of this act, must become effective on or before January 1, 2030.

provision of this act which adds or revises a requirement to submit a report to the Legislature.

16.

The provisions of NRS 218D.380 do not apply to any provision of this act which adds or revises a requirement to submit a report to the Legislature.

- *SB389_R1* – 19 – Sec.

and (b) On the effective date of the initial contract entered into between the Department of Health and Human Services and the state pharmacy benefit manager pursuant to NRS 422.4053, as amended by section 12 of this act, for all other purposes.spurposes. H - *SB389_R1*

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