AB 2180

Bill Subjects

Abstract

Existing law generally prohibits a person who manufactures a prescription drug from offering in California any discount, repayment, product voucher, or other reduction in an individual's out-of-pocket expenses associated with the individual's health insurance, health care service plan, or other health coverage, including, but not limited to, a copayment, coinsurance, or deductible, for any prescription drug if a lower cost generic drug is covered under the individual's health insurance, health care service plan, or other health coverage on a lower cost-sharing tier that is designated as therapeutically equivalent to the prescription drug manufactured by that person or if the active ingredients of the drug are contained in products regulated by the federal Food and Drug Administration, are available without prescription at a lower cost, and are not otherwise contraindicated for the condition for which the prescription drug is approved. Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the licensure and regulation of health care service plans by the Department of Managed Health Care, and makes a willful violation of the act a crime. Existing law provides for the regulation of health insurers by the Department of Insurance. This bill would require a health care service plan, health insurance policy, or pharmacy benefit manager that administers pharmacy benefits for a health care service plan or health insurer to apply any amounts paid by the enrollee, insured, or a third-party patient assistance program for prescription drugs toward the enrollee's or insured's cost-sharing requirement, and would only apply those requirements with respect to enrollees or insureds who have a chronic disease or terminal illness. The bill would limit the application of the section to health care service plans and health insurance policies issued, amended, delivered, or renewed on or after January 1, 2025. The bill would repeal those provisions on January 1, 2035. The bill would require the Department of Managed Health Care and the Department of Insurance, by March 31, 2034, to provide a report to the appropriate policy committees of the Legislature on the impact of the provisions on drug prices and health care premium rates, including a recommendation whether the repeal date should be deleted. Existing law requires a health care service plan or health insurer that files certain rate information to report to the appropriate department specified cost information regarding covered prescription drugs, including generic drugs, brand name drugs, and specialty drugs, dispensed as provided. This bill, until January 1, 2035, additionally would require health care service plans and health insurers to report the 25 most frequently prescribed drugs with a patient assistance program, as described in the bill, and the 25 most costly drugs, by total annual plan spending, with a prescription assistance program, as described in the bill. The bill also would require the health care service plan or health insurer to report the aggregate dollar amount of all patient assistance programs that the health care service plan, health insurer, or their designee collected from all third-party entities in connection with the bill's cost-sharing requirements that are attributable to drug utilization by enrollees or insureds during that calendar year. Because a willful violation of the bill's requirements by a health care service plan would be a crime, this bill would impose a state-mandated local program. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason.