CHAPTER 26.1-27.1PHARMACY BENEFITS MANAGEMENT26.1-27.1-01. Definitions. In this chapter, unless the context otherwise requires:1."Covered entity" means a nonprofit hospital or a medical service corporation; a<br>health insurer; a health benefit plan; a health maintenance organization; a health<br>program administered by the state in the capacity of provider of health coverage; or<br>an employer, a labor union, or other entity organized in the state which provides<br>health coverage to covered individuals who are employed or reside in the state. The<br>term does not include a self-funded plan that is exempt from state regulation<br>pursuant to the Employee Retirement Income Security Act of 1974 [Pub. L. 93-406;<br>88 Stat. 829; 29 U.S.C. 1001 et seq.]; a plan issued for coverage for federal<br>employees; or a health plan that provides coverage only for accidental injury,<br>specified disease, hospital indemnity, medicare supplement, disability income,<br>long-term care, or other limited-benefit health insurance policy or contract.2."Covered individual" means a member, a participant, an enrollee, a contractholder, a<br>policyholder, or a beneficiary of a covered entity who is provided health coverage by<br>the covered entity.The term includes a dependent or other individual providedhealth coverage through a policy, contract, or plan for a covered individual.3."De-identified information" means information from which the name, address,<br>telephone number, and other variables have been removed in accordance with<br>requirements of title 45, Code of Federal Regulations, part 164, section 512,<br>subsections (a) or (b).4."Generic drug" means a drug that is chemically equivalent to a brand name drug for<br>which the patent has expired.5."Labeler" means a person that has been assigned a labeler code by the federal food<br>and drug administration under title 21, Code of Federal Regulations, part 207,<br>section 20, and that receives prescription drugs from a manufacturer or wholesaler<br>and repackages those drugs for later retail sale.6."Payment received by the pharmacy benefits manager" means the aggregate<br>amount of the following types of payments:a.A rebate collected by the pharmacy benefits manager which is allocated to a<br>covered entity;b.An administrative fee collected from the manufacturer in consideration of an<br>administrative service provided by the pharmacy benefits manager to the<br>manufacturer;c.A pharmacy network fee; andd.Any other fee or amount collected by the pharmacy benefits manager from a<br>manufacturer or labeler for a drug switch program, formulary management<br>program, mail service pharmacy, educational support, data sales related to a<br>covered individual, or any other administrative function.7."Pharmacy benefits management" means the procurement of prescription drugs at a<br>negotiated rate for dispensation within this state to covered individuals; the<br>administration or management of prescription drug benefits provided by a covered<br>entity for the benefit of covered individuals; or the providing of any of the following<br>services with regard to the administration of the following pharmacy benefits:Page No. 1a.Claims processing, retail network management, and payment of claims to a<br>pharmacy for prescription drugs dispensed to a covered individual;b.Clinical formulary development and management services; orc.Rebate contracting and administration.8."Pharmacy benefits manager" means a person that performs pharmacy benefits<br>management. The term includes a person acting for a pharmacy benefits manager<br>in a contractual or employment relationship in the performance of pharmacy benefits<br>management for a covered entity. The term does not include a public self-funded<br>pool or a private single-employer self-funded plan that provides benefits or services<br>directly to its beneficiaries.The term does not include a health carrier licensedunder title 26.1 if the health carrier is providing pharmacy benefits management to<br>its insureds.9."Rebate" means a retrospective reimbursement of a monetary amount by a<br>manufacturer under a manufacturer's discount program with a pharmacy benefits<br>manager for drugs dispensed to a covered individual.10."Utilization information" means de-identified information regarding the quantity of<br>drug prescriptions dispensed to members of a health plan during a specified time<br>period.26.1-27.1-02. Licensing. A person may not perform or act as a pharmacy benefitsmanager in this state unless that person holds a certificate of registration as an administrator<br>under chapter 26.1-27.26.1-27.1-03. Disclosure requirements.1.A pharmacy benefits manager shall disclose to the commissioner any ownership<br>interest of any kind with:a.Any insurance company responsible for providing benefits directly or through<br>reinsurance to any plan for which the pharmacy benefits manager provides<br>services.b.Any parent company, subsidiary, or other organization that is related to the<br>provision of pharmacy services, the provision of other prescription drug or<br>device services, or a pharmaceutical manufacturer.2.A pharmacy benefits manager shall notify the commissioner in writing within five<br>business days of any material change in the pharmacy benefits manager's<br>ownership.26.1-27.1-04. Prohibited practices.1.A pharmacy benefits manager shall comply with chapter 19-02.1 regarding the<br>substitution of one prescription drug for another.2.A pharmacy benefits manager may not require a pharmacist or pharmacy to<br>participate in one contract in order to participate in another contract. The pharmacy<br>benefits manager may not exclude an otherwise qualified pharmacist or pharmacy<br>from participation in a particular network if the pharmacist or pharmacy accepts the<br>terms, conditions, and reimbursement rates of the pharmacy benefits manager's<br>contract.26.1-27.1-05.Contentsofpharmacybenefitsmanagementagreement-Requirements.Page No. 21.A pharmacy benefits manager shall offer to a covered entity options for the covered<br>entity to contract for services that must include:a.A transaction fee without a sharing of a payment received by the pharmacy<br>benefits manager;b.A combination of a transaction fee and a sharing of a payment received by the<br>pharmacy benefits manager; orc.A transaction fee based on the covered entity receiving all the benefits of a<br>payment received by the pharmacy benefits manager.2.The agreement between the pharmacy benefits manager and the covered entity<br>must include a provision allowing the covered entity to have audited the pharmacy<br>benefits manager's books, accounts, and records, including de-identified utilization<br>information, as necessary to confirm that the benefit of a payment received by the<br>pharmacy benefits manager is being shared as required by the contract.26.1-27.1-06. Examination of insurer-covered entity.1.During an examination of a covered entity as provided for in chapter 26.1-03,<br>26.1-17, or 26.1-18.1, the commissioner shall examine any contract between the<br>covered entity and a pharmacy benefits manager and any related record to<br>determine if the payment received by the pharmacy benefits manager which the<br>covered entity received from the pharmacy benefits manager has been applied<br>toward reducing the covered entity's rates or has been distributed to covered<br>individuals.2.To facilitate the examination, the covered entity shall disclose annually to the<br>commissioner the benefits of the payment received by the pharmacy benefits<br>manager received under any contract with a pharmacy benefits manager and shall<br>describe the manner in which the payment received by the pharmacy benefits<br>manager is applied toward reducing rates or is distributed to covered individuals.3.Any information disclosed to the commissioner under this section is considered a<br>trade secret under chapter 47-25.1.26.1-27.1-07. Rulemaking authority. The commissioner shall adopt rules as necessarybefore implementation of this chapter.Page No. 3Document Outlinechapter 26.1-27.1 pharmacy benefits management
CHAPTER 26.1-27.1PHARMACY BENEFITS MANAGEMENT26.1-27.1-01. Definitions. In this chapter, unless the context otherwise requires:1."Covered entity" means a nonprofit hospital or a medical service corporation; a<br>health insurer; a health benefit plan; a health maintenance organization; a health<br>program administered by the state in the capacity of provider of health coverage; or<br>an employer, a labor union, or other entity organized in the state which provides<br>health coverage to covered individuals who are employed or reside in the state. The<br>term does not include a self-funded plan that is exempt from state regulation<br>pursuant to the Employee Retirement Income Security Act of 1974 [Pub. L. 93-406;<br>88 Stat. 829; 29 U.S.C. 1001 et seq.]; a plan issued for coverage for federal<br>employees; or a health plan that provides coverage only for accidental injury,<br>specified disease, hospital indemnity, medicare supplement, disability income,<br>long-term care, or other limited-benefit health insurance policy or contract.2."Covered individual" means a member, a participant, an enrollee, a contractholder, a<br>policyholder, or a beneficiary of a covered entity who is provided health coverage by<br>the covered entity.The term includes a dependent or other individual providedhealth coverage through a policy, contract, or plan for a covered individual.3."De-identified information" means information from which the name, address,<br>telephone number, and other variables have been removed in accordance with<br>requirements of title 45, Code of Federal Regulations, part 164, section 512,<br>subsections (a) or (b).4."Generic drug" means a drug that is chemically equivalent to a brand name drug for<br>which the patent has expired.5."Labeler" means a person that has been assigned a labeler code by the federal food<br>and drug administration under title 21, Code of Federal Regulations, part 207,<br>section 20, and that receives prescription drugs from a manufacturer or wholesaler<br>and repackages those drugs for later retail sale.6."Payment received by the pharmacy benefits manager" means the aggregate<br>amount of the following types of payments:a.A rebate collected by the pharmacy benefits manager which is allocated to a<br>covered entity;b.An administrative fee collected from the manufacturer in consideration of an<br>administrative service provided by the pharmacy benefits manager to the<br>manufacturer;c.A pharmacy network fee; andd.Any other fee or amount collected by the pharmacy benefits manager from a<br>manufacturer or labeler for a drug switch program, formulary management<br>program, mail service pharmacy, educational support, data sales related to a<br>covered individual, or any other administrative function.7."Pharmacy benefits management" means the procurement of prescription drugs at a<br>negotiated rate for dispensation within this state to covered individuals; the<br>administration or management of prescription drug benefits provided by a covered<br>entity for the benefit of covered individuals; or the providing of any of the following<br>services with regard to the administration of the following pharmacy benefits:Page No. 1a.Claims processing, retail network management, and payment of claims to a<br>pharmacy for prescription drugs dispensed to a covered individual;b.Clinical formulary development and management services; orc.Rebate contracting and administration.8."Pharmacy benefits manager" means a person that performs pharmacy benefits<br>management. The term includes a person acting for a pharmacy benefits manager<br>in a contractual or employment relationship in the performance of pharmacy benefits<br>management for a covered entity. The term does not include a public self-funded<br>pool or a private single-employer self-funded plan that provides benefits or services<br>directly to its beneficiaries.The term does not include a health carrier licensedunder title 26.1 if the health carrier is providing pharmacy benefits management to<br>its insureds.9."Rebate" means a retrospective reimbursement of a monetary amount by a<br>manufacturer under a manufacturer's discount program with a pharmacy benefits<br>manager for drugs dispensed to a covered individual.10."Utilization information" means de-identified information regarding the quantity of<br>drug prescriptions dispensed to members of a health plan during a specified time<br>period.26.1-27.1-02. Licensing. A person may not perform or act as a pharmacy benefitsmanager in this state unless that person holds a certificate of registration as an administrator<br>under chapter 26.1-27.26.1-27.1-03. Disclosure requirements.1.A pharmacy benefits manager shall disclose to the commissioner any ownership<br>interest of any kind with:a.Any insurance company responsible for providing benefits directly or through<br>reinsurance to any plan for which the pharmacy benefits manager provides<br>services.b.Any parent company, subsidiary, or other organization that is related to the<br>provision of pharmacy services, the provision of other prescription drug or<br>device services, or a pharmaceutical manufacturer.2.A pharmacy benefits manager shall notify the commissioner in writing within five<br>business days of any material change in the pharmacy benefits manager's<br>ownership.26.1-27.1-04. Prohibited practices.1.A pharmacy benefits manager shall comply with chapter 19-02.1 regarding the<br>substitution of one prescription drug for another.2.A pharmacy benefits manager may not require a pharmacist or pharmacy to<br>participate in one contract in order to participate in another contract. The pharmacy<br>benefits manager may not exclude an otherwise qualified pharmacist or pharmacy<br>from participation in a particular network if the pharmacist or pharmacy accepts the<br>terms, conditions, and reimbursement rates of the pharmacy benefits manager's<br>contract.26.1-27.1-05.Contentsofpharmacybenefitsmanagementagreement-Requirements.Page No. 21.A pharmacy benefits manager shall offer to a covered entity options for the covered<br>entity to contract for services that must include:a.A transaction fee without a sharing of a payment received by the pharmacy<br>benefits manager;b.A combination of a transaction fee and a sharing of a payment received by the<br>pharmacy benefits manager; orc.A transaction fee based on the covered entity receiving all the benefits of a<br>payment received by the pharmacy benefits manager.2.The agreement between the pharmacy benefits manager and the covered entity<br>must include a provision allowing the covered entity to have audited the pharmacy<br>benefits manager's books, accounts, and records, including de-identified utilization<br>information, as necessary to confirm that the benefit of a payment received by the<br>pharmacy benefits manager is being shared as required by the contract.26.1-27.1-06. Examination of insurer-covered entity.1.During an examination of a covered entity as provided for in chapter 26.1-03,<br>26.1-17, or 26.1-18.1, the commissioner shall examine any contract between the<br>covered entity and a pharmacy benefits manager and any related record to<br>determine if the payment received by the pharmacy benefits manager which the<br>covered entity received from the pharmacy benefits manager has been applied<br>toward reducing the covered entity's rates or has been distributed to covered<br>individuals.2.To facilitate the examination, the covered entity shall disclose annually to the<br>commissioner the benefits of the payment received by the pharmacy benefits<br>manager received under any contract with a pharmacy benefits manager and shall<br>describe the manner in which the payment received by the pharmacy benefits<br>manager is applied toward reducing rates or is distributed to covered individuals.3.Any information disclosed to the commissioner under this section is considered a<br>trade secret under chapter 47-25.1.26.1-27.1-07. Rulemaking authority. The commissioner shall adopt rules as necessarybefore implementation of this chapter.Page No. 3Document Outlinechapter 26.1-27.1 pharmacy benefits management
CHAPTER 26.1-27.1PHARMACY BENEFITS MANAGEMENT26.1-27.1-01. Definitions. In this chapter, unless the context otherwise requires:1."Covered entity" means a nonprofit hospital or a medical service corporation; a<br>health insurer; a health benefit plan; a health maintenance organization; a health<br>program administered by the state in the capacity of provider of health coverage; or<br>an employer, a labor union, or other entity organized in the state which provides<br>health coverage to covered individuals who are employed or reside in the state. The<br>term does not include a self-funded plan that is exempt from state regulation<br>pursuant to the Employee Retirement Income Security Act of 1974 [Pub. L. 93-406;<br>88 Stat. 829; 29 U.S.C. 1001 et seq.]; a plan issued for coverage for federal<br>employees; or a health plan that provides coverage only for accidental injury,<br>specified disease, hospital indemnity, medicare supplement, disability income,<br>long-term care, or other limited-benefit health insurance policy or contract.2."Covered individual" means a member, a participant, an enrollee, a contractholder, a<br>policyholder, or a beneficiary of a covered entity who is provided health coverage by<br>the covered entity.The term includes a dependent or other individual providedhealth coverage through a policy, contract, or plan for a covered individual.3."De-identified information" means information from which the name, address,<br>telephone number, and other variables have been removed in accordance with<br>requirements of title 45, Code of Federal Regulations, part 164, section 512,<br>subsections (a) or (b).4."Generic drug" means a drug that is chemically equivalent to a brand name drug for<br>which the patent has expired.5."Labeler" means a person that has been assigned a labeler code by the federal food<br>and drug administration under title 21, Code of Federal Regulations, part 207,<br>section 20, and that receives prescription drugs from a manufacturer or wholesaler<br>and repackages those drugs for later retail sale.6."Payment received by the pharmacy benefits manager" means the aggregate<br>amount of the following types of payments:a.A rebate collected by the pharmacy benefits manager which is allocated to a<br>covered entity;b.An administrative fee collected from the manufacturer in consideration of an<br>administrative service provided by the pharmacy benefits manager to the<br>manufacturer;c.A pharmacy network fee; andd.Any other fee or amount collected by the pharmacy benefits manager from a<br>manufacturer or labeler for a drug switch program, formulary management<br>program, mail service pharmacy, educational support, data sales related to a<br>covered individual, or any other administrative function.7."Pharmacy benefits management" means the procurement of prescription drugs at a<br>negotiated rate for dispensation within this state to covered individuals; the<br>administration or management of prescription drug benefits provided by a covered<br>entity for the benefit of covered individuals; or the providing of any of the following<br>services with regard to the administration of the following pharmacy benefits:Page No. 1a.Claims processing, retail network management, and payment of claims to a<br>pharmacy for prescription drugs dispensed to a covered individual;b.Clinical formulary development and management services; orc.Rebate contracting and administration.8."Pharmacy benefits manager" means a person that performs pharmacy benefits<br>management. The term includes a person acting for a pharmacy benefits manager<br>in a contractual or employment relationship in the performance of pharmacy benefits<br>management for a covered entity. The term does not include a public self-funded<br>pool or a private single-employer self-funded plan that provides benefits or services<br>directly to its beneficiaries.The term does not include a health carrier licensedunder title 26.1 if the health carrier is providing pharmacy benefits management to<br>its insureds.9."Rebate" means a retrospective reimbursement of a monetary amount by a<br>manufacturer under a manufacturer's discount program with a pharmacy benefits<br>manager for drugs dispensed to a covered individual.10."Utilization information" means de-identified information regarding the quantity of<br>drug prescriptions dispensed to members of a health plan during a specified time<br>period.26.1-27.1-02. Licensing. A person may not perform or act as a pharmacy benefitsmanager in this state unless that person holds a certificate of registration as an administrator<br>under chapter 26.1-27.26.1-27.1-03. Disclosure requirements.1.A pharmacy benefits manager shall disclose to the commissioner any ownership<br>interest of any kind with:a.Any insurance company responsible for providing benefits directly or through<br>reinsurance to any plan for which the pharmacy benefits manager provides<br>services.b.Any parent company, subsidiary, or other organization that is related to the<br>provision of pharmacy services, the provision of other prescription drug or<br>device services, or a pharmaceutical manufacturer.2.A pharmacy benefits manager shall notify the commissioner in writing within five<br>business days of any material change in the pharmacy benefits manager's<br>ownership.26.1-27.1-04. Prohibited practices.1.A pharmacy benefits manager shall comply with chapter 19-02.1 regarding the<br>substitution of one prescription drug for another.2.A pharmacy benefits manager may not require a pharmacist or pharmacy to<br>participate in one contract in order to participate in another contract. The pharmacy<br>benefits manager may not exclude an otherwise qualified pharmacist or pharmacy<br>from participation in a particular network if the pharmacist or pharmacy accepts the<br>terms, conditions, and reimbursement rates of the pharmacy benefits manager's<br>contract.26.1-27.1-05.Contentsofpharmacybenefitsmanagementagreement-Requirements.Page No. 21.A pharmacy benefits manager shall offer to a covered entity options for the covered<br>entity to contract for services that must include:a.A transaction fee without a sharing of a payment received by the pharmacy<br>benefits manager;b.A combination of a transaction fee and a sharing of a payment received by the<br>pharmacy benefits manager; orc.A transaction fee based on the covered entity receiving all the benefits of a<br>payment received by the pharmacy benefits manager.2.The agreement between the pharmacy benefits manager and the covered entity<br>must include a provision allowing the covered entity to have audited the pharmacy<br>benefits manager's books, accounts, and records, including de-identified utilization<br>information, as necessary to confirm that the benefit of a payment received by the<br>pharmacy benefits manager is being shared as required by the contract.26.1-27.1-06. Examination of insurer-covered entity.1.During an examination of a covered entity as provided for in chapter 26.1-03,<br>26.1-17, or 26.1-18.1, the commissioner shall examine any contract between the<br>covered entity and a pharmacy benefits manager and any related record to<br>determine if the payment received by the pharmacy benefits manager which the<br>covered entity received from the pharmacy benefits manager has been applied<br>toward reducing the covered entity's rates or has been distributed to covered<br>individuals.2.To facilitate the examination, the covered entity shall disclose annually to the<br>commissioner the benefits of the payment received by the pharmacy benefits<br>manager received under any contract with a pharmacy benefits manager and shall<br>describe the manner in which the payment received by the pharmacy benefits<br>manager is applied toward reducing rates or is distributed to covered individuals.3.Any information disclosed to the commissioner under this section is considered a<br>trade secret under chapter 47-25.1.26.1-27.1-07. Rulemaking authority. The commissioner shall adopt rules as necessarybefore implementation of this chapter.Page No. 3Document Outlinechapter 26.1-27.1 pharmacy benefits management
