Pharmacy Benefit Managers

V.S.A. tit. 18, ch. 221, subch. 9

in effect

18 V.S.A. § 9471 Definitions [Repealed effective July 1, 2029]

9471. Definitions [Repealed effective July 1, 2029] As used in this subchapter: (1) “Beneficiary” means an individual enrolled in a health plan in which coverage of prescription drugs is administered by a pharmacy benefit manager and includes his or her dependent or other person provided health coverage through that health plan. (2) “Health insurer” is defined by section 9402 of this title and shall include: (A) a health insurance company, a nonprofit hospital and medical service corporation, and health maintenance organizations; (B) an employer, labor union, or other group of persons organized in Vermont that provides a health plan to beneficiaries who are employed or reside in Vermont; and (C) the State of Vermont and any agent or instrumentality of the State that offers, administers, or provides financial support to State government. (3) “Health plan” means a health benefit plan offered, administered, or issued by a health insurer doing business in Vermont. (4) “Pharmacy benefit management” means an arrangement for the procurement of prescription drugs at a negotiated rate for dispensation within this State to beneficiaries, the administration or management of prescription drug benefits provided by a health plan for the benefit of beneficiaries, or any of the following services provided with regard to the administration of pharmacy benefits: (A) mail service pharmacy; (B) claims processing, retail network management, and payment of claims to pharmacies for prescription drugs dispensed to beneficiaries; (C) clinical formulary development and management services; (D) rebate contracting and administration; (E) certain patient compliance, therapeutic intervention, and generic substitution programs; and (F) disease or chronic care management programs. (5) “Pharmacy benefit manager” means an entity that performs pharmacy benefit management, except an entity that provides pharmacy benefit management services for Vermont Medicaid. The term includes a person or entity in a contractual or employment relationship with an entity performing pharmacy benefit management for a health plan. (6) “Maximum allowable cost” means the per unit drug product reimbursement amount, excluding dispensing fees, for a group of equivalent multisource generic prescription drugs. (7) “Pharmacy benefit manager affiliate” means a pharmacy or pharmacist that, directly or indirectly, through one or more intermediaries, is owned or controlled by, or is under common ownership or control with, a pharmacy benefit manager. Added 2007, No. 80, § 8; amended 2013, No. 79, § 21, eff. Jan. 1, 2014; 2015, No. 54, § 2, eff. June 5, 2015; 2021, No. 131 (Adj. Sess.), § 2, eff. Jan. 1, 2023; repealed by 2023, No. 127 (Adj. Sess.), § 4(a)(2), eff. July 1, 2029.

18 V.S.A. § 9472 Pharmacy benefit managers; required practices with respect to health insurers and covered persons [Repealed effective July 1, 2029]

9472. Pharmacy benefit managers; required practices with respect to health insurers and covered persons [Repealed effective July 1, 2029] (a) A pharmacy benefit manager that provides pharmacy benefit management for a health plan has a fiduciary duty to its health insurer client that includes a duty to be fair and truthful toward the health insurer, to act in the health insurer’s best interests, and to perform its duties with care, skill, prudence, and diligence. In the case of a health benefit plan offered by a health insurer as defined by subdivision 9471(2)(A) of this title, the health insurer shall remain responsible for administering the health benefit plan in accordance with the health insurance policy or subscriber contract or plan and in compliance with all applicable provisions of Title 8 and this title. (b) A pharmacy benefit manager shall provide notice to the health insurer that the terms contained in subsection (c) of this section may be included in the contract between the pharmacy benefit manager and the health insurer. (c) A pharmacy benefit manager that provides pharmacy benefit management for a health plan shall do all of the following: (1) Provide all financial and utilization information requested by a health insurer relating to the provision of benefits to beneficiaries through that health insurer’s health plan and all financial and utilization information relating to services to that health insurer. A pharmacy benefit manager providing information under this subsection may designate that material as confidential. Information designated as confidential by a pharmacy benefit manager and provided to a health insurer under this subsection shall not be disclosed by the health insurer to any person without the consent of the pharmacy benefit manager, except that disclosure may be made by the health insurer: (A) in a court filing under the consumer protection provisions of 9 V.S.A. chapter 63, provided that the information shall be filed under seal and that prior to the information being unsealed, the court shall give notice and an opportunity to be heard to the pharmacy benefit manager on why the information should remain confidential; (B) to State and federal government officials; (C) when authorized by 9 V.S.A. chapter 63; (D) when ordered by a court for good cause shown; or (E) when ordered by the Commissioner as to a health insurer as defined in subdivision 9471(2)(A) of this title pursuant to the provisions of Title 8 and this title. (2) Notify a health insurer in writing of any proposed or ongoing activity, policy, or practice of the pharmacy benefit manager that presents, directly or indirectly, any conflict of interest with the requirements of this section. (3) With regard to the dispensation of a substitute prescription drug for a prescribed drug to a beneficiary in which the substitute drug costs more than the prescribed drug and the pharmacy benefit manager receives a benefit or payment directly or indirectly, disclose to the health insurer the cost of both drugs and the benefit or payment directly or indirectly accruing to the pharmacy benefit manager as a result of the substitution. (4) If the pharmacy benefit manager derives any payment or benefit for the dispensation of prescription drugs within the State based on volume of sales for certain prescription drugs or classes or brands of drugs within the State, pass that payment or benefit on in full to the health insurer. (5) Disclose to the health insurer all financial terms and arrangements for remuneration of any kind that apply between the pharmacy benefit manager and any prescription drug manufacturer that relate to benefits provided to beneficiaries under or services to the health insurer’s health plan, including formulary management and drug-switch programs, educational support, claims processing, and pharmacy network fees charged from retail pharmacies and data sales fees. A pharmacy benefit manager providing information under this subsection may designate that material as confidential. Information designated as confidential by a pharmacy benefit manager and provided to a health insurer under this subsection shall not be disclosed by the health insurer to any person without the consent of the pharmacy benefit manager, except that disclosure may be made by the health insurer: (A) in a court filing under the consumer protection provisions of 9 V.S.A. chapter 63, provided that the information shall be filed under seal and that prior to the information being unsealed, the court shall give notice and an opportunity to be heard to the pharmacy benefit manager on why the information should remain confidential; (B) when authorized by 9 V.S.A. chapter 63; (C) when ordered by a court for good cause shown; or (D) when ordered by the Commissioner as to a health insurer as defined in subdivision 9471(2)(A) of this title pursuant to the provisions of Title 8 and this title. (d) At least annually, a pharmacy benefit manager that provides pharmacy benefit management for a health plan shall disclose to the health insurer, the Department of Financial Regulation, and the Green Mountain Care Board the aggregate amount the pharmacy benefit manager retained on all claims charged to the health insurer for prescriptions filled during the preceding calendar year in excess of the amount the pharmacy benefit manager reimbursed pharmacies. (e) A pharmacy benefit manager contract with a health insurer shall not contain any provision purporting to reserve discretion to the pharmacy benefit manager to move a drug to a higher tier or remove a drug from its drug formulary any more frequently than two times per year. (f)(1) A pharmacy benefit manager shall not require a covered person purchasing a covered prescription drug to pay an amount greater than the lesser of: (A) the cost-sharing amount under the terms of the health benefit plan; (B) the maximum allowable cost for the drug; or (C) the amount the covered person would pay for the drug if the covered person were paying the cash price. (2) Any amount paid by a covered person under subdivision (1) of this subsection shall be attributed toward any deductible and, to the extent consistent with Sec. 2707 of the Public Health Service Act (42 U.S.C. § 300gg-6), the annual out-of-pocket maximums under the covered person’s health benefit plan. (g) Compliance with the requirements of this section is required for pharmacy benefit managers entering into contracts with a health insurer in this State for pharmacy benefit management in this State. Added 2007, No. 80, § 8; amended 2013, No. 144 (Adj. Sess.), § 12, eff. May 27, 2014; 2021, No. 131 (Adj. Sess.), § 2, eff. Jan. 1, 2023; repealed by 2023, No. 127 (Adj. Sess.), § 4(a)(2), eff. July 1, 2029.

18 V.S.A. § 9473 Pharmacy benefit managers; required practices with respect to pharmacies [Repealed effective July 1, 2029]

9473. Pharmacy benefit managers; required practices with respect to pharmacies [Repealed effective July 1, 2029] (a) Within 14 calendar days following receipt of a pharmacy claim, a pharmacy benefit manager or other entity paying pharmacy claims shall do one of the following: (1) Pay or reimburse the claim. (2) Notify the pharmacy in writing that the claim is contested or denied. The notice shall include specific reasons supporting the contest or denial and a description of any additional information required for the pharmacy benefit manager or other payer to determine liability for the claim. (b) A participation contract between a pharmacy benefit manager and a pharmacist shall not prohibit, restrict, or penalize a pharmacy or pharmacist in any way from disclosing to any covered person any health care information that the pharmacy or pharmacist deems appropriate, including: (1) the nature of treatment, risks, or alternatives to treatment; (2) the availability of alternate therapies, consultations, or tests; (3) the decision of utilization reviewers or similar persons to authorize or deny services; (4) the process that is used to authorize or deny health care services; or (5) information on financial incentives and structures used by the health insurer. (c) A pharmacy benefit manager or other entity paying pharmacy claims shall not: (1) require a pharmacy to pass through any portion of the insured’s co-payment, or patient responsibility, to the pharmacy benefit manager or other payer; (2) prohibit a pharmacy or pharmacist from discussing information regarding the total cost for pharmacist services for a prescription drug; (3) prohibit or penalize a pharmacy or pharmacist for providing information to an insured regarding the insured’s cost-sharing amount for a prescription drug; or (4) prohibit or penalize a pharmacy or pharmacist for the pharmacist or other pharmacy employee disclosing to an insured the cash price for a prescription drug or selling a lower cost drug to the insured if one is available. (d) A pharmacy benefit manager contract with a participating pharmacist or pharmacy shall not prohibit, restrict, or limit disclosure of information to the Commissioner, law enforcement, or State and federal government officials, provided that: (1) the recipient of the information represents that the recipient has the authority, to the extent provided by State or federal law, to maintain proprietary information as confidential; and (2) prior to disclosure of information designated as confidential, the pharmacist or pharmacy: (A) marks as confidential any document in which the information appears; and (B) requests confidential treatment for any oral communication of the information. (e) A pharmacy benefit manager shall not terminate a contract with or penalize a pharmacist or pharmacy due to the pharmacist or pharmacy: (1) disclosing information about pharmacy benefit manager practices, except for information determined to be a trade secret under State law or by the Commissioner, when disclosed in a manner other than in accordance with subsection (d) of this section; or (2) sharing any portion of the pharmacy benefit manager contract with the Commissioner pursuant to a complaint or query regarding the contract’s compliance with the provisions of this chapter. (f) For each drug for which a pharmacy benefit manager establishes a maximum allowable cost in order to determine the reimbursement rate, the pharmacy benefit manager shall do all of the following: (1) Make available, in a format that is readily accessible and understandable by a pharmacist, the actual maximum allowable cost for each drug and the source used to determine the maximum allowable cost, which shall not be dependent upon individual beneficiary identification or benefit stage. (2) Update the maximum allowable cost at least once every seven calendar days. In order to be subject to maximum allowable cost, a drug must be widely available for purchase by all pharmacies in the State, without limitations, from national or regional wholesalers and must not be obsolete or temporarily unavailable. (3) Establish or maintain a reasonable administrative appeals process to allow a dispensing pharmacy provider to contest a listed maximum allowable cost. (4)(A) Respond in writing to any appealing pharmacy provider within 10 calendar days after receipt of an appeal, provided that, except as provided in subdivision (B) of this subdivision (4), a dispensing pharmacy provider shall file any appeal within 10 calendar days from the date its claim for reimbursement is adjudicated. (B) A pharmacy benefit manager shall allow a dispensing pharmacy provider to appeal after the 10-calendar-day appeal period set forth in subdivision (A) of this subdivision (4) if the prescription claim is subject to an audit initiated by the pharmacy benefit manager or its auditing agent. (5) For a denied appeal, provide the reason for the denial and identify the national drug code and a Vermont-licensed wholesaler of an equivalent drug product that may be purchased by contracted pharmacies at or below the maximum allowable cost. (6) For an appeal in which the appealing pharmacy is successful: (A) make the change in the maximum allowable cost within 30 business days after the redetermination; and (B) allow the appealing pharmacy or pharmacist to reverse and rebill the claim in question. (g) A pharmacy benefit manager shall not: (1) require a claim for a drug to include a modifier or supplemental transmission, or both, to indicate that the drug is a 340B drug unless the claim is for payment, directly or indirectly, by Medicaid; or (2) restrict access to a pharmacy network or adjust reimbursement rates based on a pharmacy’s participation in a 340B contract pharmacy arrangement. (h)(1) A pharmacy benefit manager or other third party that reimburses a 340B covered entity for drugs that are subject to an agreement under 42 U.S.C. § 256b through the 340B drug pricing program shall not reimburse the 340B covered entity for pharmacy-dispensed drugs at a rate lower than that paid for the same drug to pharmacies that are not 340B covered entities, and the pharmacy benefit manager shall not assess any fee, charge-back, or other adjustment on the 340B covered entity on the basis that the covered entity participates in the 340B program as set forth in 42 U.S.C. § 256b. (2) With respect to a patient who is eligible to receive drugs that are subject to an agreement under 42 U.S.C. § 256b through the 340B drug pricing program, a pharmacy benefit manager or other third party that makes payment for the drugs shall not discriminate against a 340B covered entity in a manner that prevents or interferes with the patient’s choice to receive the drugs from the 340B covered entity. (i) A pharmacy benefit manager shall not reimburse a pharmacy or pharmacist in this State an amount less than the amount the pharmacy benefit manager reimburses a pharmacy benefit manager affiliate for providing the same pharmacist services. (j) A pharmacy benefit manager shall not restrict, limit, or impose requirements on a licensed pharmacy in excess of those set forth by the Vermont Board of Pharmacy or by other State or federal law, nor shall it withhold reimbursement for services on the basis of noncompliance with participation requirements. (k) A pharmacy benefit manager shall provide notice to all participating pharmacies prior to changing its drug formulary. Added 2013, No. 144 (Adj. Sess.), § 14; amended 2015, No. 54, § 3, eff. June 5, 2015; 2017, No. 193 (Adj. Sess.), § 11; 2021, No. 74, § E.227.1; 2021, No. 131 (Adj. Sess.), § 2, eff. January 1, 2023 and § 7, eff. May 24, 2022; 2023, No. 51, § 6, eff. July 1, 2023; repealed by 2023, No. 127 (Adj. Sess.), § 4(a)(2), eff. July 1, 2029.

18 V.S.A. § 9474 Enforcement [Repealed effective July 1, 2029]

9474. Enforcement [Repealed effective July 1, 2029] (a) Except as provided in subsection (d) of this section, in addition to any remedy available to the Commissioner under this title and any other remedy provided by law, a violation of this subchapter shall be considered a violation of the Vermont Consumer Protection Act in 9 V.S.A. chapter 63, subchapter 1. Except as provided in subsection (d) of this section, all rights, authority, and remedies available to the Attorney General and private parties to enforce the Vermont Consumer Protection Act shall be available to enforce the provisions of this subchapter. (b) In connection with any action for violation of the Vermont Consumer Protection Act, the Commissioner’s determinations concerning the interpretation and administration of the provisions of this subchapter and any rules adopted pursuant to this subchapter shall carry a presumption of validity. The Attorney General and the Commissioner shall consult with each other prior to the commencement of any investigation or enforcement action with respect to any pharmacy benefit manager. (c) The Commissioner may investigate, examine, or otherwise enforce a violation of this subchapter by a pharmacy benefit manager under section 9412 of this title as if the pharmacy benefit manager were a health insurer. (d) The Commissioner shall have the exclusive authority to investigate, examine, and otherwise enforce the provisions of this subchapter relating to a pharmacy benefit manager in connection with the pharmacy benefit manager’s contractual relationship with, and any other activity with respect to, a health insurer defined by subdivision 9471(2)(A) of this title. (e) Notwithstanding any provision of this section to the contrary, the Commissioner and the Attorney General may bring a joint enforcement action against any person or entity for a violation of this subchapter. Added 2007, No. 80, § 8; amended 2007, No. 89 (Adj. Sess.), § 6; 2013, No. 144 (Adj. Sess.), § 13, eff. May 27, 2014; 2017, No. 113 (Adj. Sess.), § 110; 2023, No. 6, § 241, eff. July 1, 2023; repealed by 2023, No. 127 (Adj. Sess.), § 4(a)(2), eff. July 1, 2029.

Source: Vermont General Assembly (legislature.vermont.gov)URL: https://legislature.vermont.gov/statutes/chapter/18/221Fetched: 10/21/2026