Pharmacy Benefit Managers Face New Licensing Requirements
Two states recently enacted new pharmacy benefit manager licensing requirements that affect pharmacy benefit managers in Kentucky and New Mexico. It is important for Pharmacy Benefit Managers to ensure they are in compliance with these new laws.
The details of the actions are summarized below.
Kentucky SB 117
Kentucky Senate Bill 117 revised the definition of a "pharmacy benefit manager" (PBM) and "maximum allowable cost." It also clarifies PBM obligations, including an appeal process for certain parties and the maximum allowable cost to determine the drug product reimbursement. Further, Senate Bill 117 creates a new requirement for PBMs to obtain a license from the Kentucky Insurance Department by January 1, 2017. Per the Kentucky Insurance Department, as of January 1, 2017, an entity may not do business in Kentucky as a PBM until its PBM license has been issued. The Kentucky Insurance Department just recently published the PBM licensure application on its website.
The New Mexico Superintendent of Insurance recently issued Bulletin 2016-021, which supersedes Bulletin No. 2014-014.
According to the Superintendent, Bulletin 2016-21 was issued to advise any unlicensed PBM doing business in New Mexico that a PBM application must be submitted to the New Mexico Office of the Superintendent of Insurance by November 1, 2016, and that failure to comply with provisions of the New Mexico Pharmacy Benefits Manager Regulation Act may result in a monetary penalty of up to $10,000 per violation and cessation of business operations in New Mexico.