Section 58-29E-1 - [Effective 1/1/2025] Definitions Terms used in this chapter mean:
(1) "Brand name," the same as set forth in § 36-11-2;(2) "Covered individual," a member, participant, enrollee, contract holder, policy holder, or beneficiary of a third-party payor who is provided health coverage by the third-party payor. The term includes a dependent or other individual provided health coverage through a policy, contract, or plan for a covered individual;(3) "Generic drug," a chemically equivalent copy of a brand name drug with an expired patent;(4) "Health benefit plan," the same as set forth in § 58-17F-2;(5) "Health carrier," the same as set forth in § 58-17F-1;(6) "Interchangeable biological product," the same as set forth in § 36-11-2;(7) "Maximum allowable cost," the maximum amount that a pharmacy may be reimbursed, as set by a pharmacy benefit manager or a third-party payor, for a brand name or a generic drug, an interchangeable biological product, or any other prescription drug and which may include: (a) The average acquisition cost;(b) The national average acquisition cost;(c) The average manufacturer price;(d) The average wholesale price;(e) The brand effective rate;(f) The generic effective rate;(h) Federal upper limits;(i) The wholesale acquisition cost; and(j) Any other term used by a pharmacy benefit manager or a health carrier to establish reimbursement rates for a pharmacy;(8) "Maximum allowable cost list," a list of prescription drugs that: (a) Includes the maximum allowable cost for each prescription drug; and(b) Is used, directly or indirectly, by a pharmacy benefit manager;(9) "Pharmaceutical manufacturer," any person engaged in the business of preparing, producing, converting, processing, packaging, labeling, or distributing a prescription drug, but not including a wholesale distributor or dispenser;(10) "Pharmacist," the same as set forth in § 36-11-2;(11) "Pharmacy," the same as set forth in § 36-11-2;(12) "Pharmacy benefit management," the procurement of prescription drugs at a negotiated rate for dispensation within this state to covered individuals, the administration or management of prescription drug benefits provided by a third-party payor for the benefit of covered individuals, 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 covered individuals;(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 management programs involving prescription drug utilization;(13) "Pharmacy benefit management fee," a fee that covers the cost of providing pharmacy benefit management, but does not exceed the value of the service performed by the pharmacy benefit manager;(14) "Pharmacy benefit manager," a person that performs pharmacy benefit management, pursuant to a contract or other relationship with a third-party payor and includes:(a) A person acting in a contractual or employment relationship for a pharmacy benefit manager while providing pharmacy benefit management for a third-party payor; and(b) A mail service pharmacy;(15) "Pharmacy benefit manager affiliate," a pharmacy that, or a pharmacist who, directly or indirectly, through one or more intermediaries, owns or controls, is owned and controlled by, or is under common ownership or control of, a pharmacy benefit manager;(16) "Pharmacy network," pharmacies that have contracted with a pharmacy benefit manager to dispense or sell prescription drugs to covered individuals under a health benefit plan for which the prescription drug benefit is managed by a pharmacy benefit manager;(17) "Prescription drug," a drug classified by the United States Food and Drug Administration as requiring a prescription by a health care practitioner, prior to being administered or dispensed to a patient, and including interchangeable biological products, brand names, and generic drugs;(18) "Prescription drug benefit," a health benefit plan providing third-party payment or prepayment for prescription drugs;(19) "Prescription drug order," the same as set forth in § 36-11-2;(20) "Proprietary information," information on pricing, costs, revenue, taxes, market share, negotiating strategies, customers, and personnel held by a private entity and used for that private entity's business purposes;(21) "Rebate," a discount or other negotiated price concession that is paid directly or indirectly to a pharmacy benefit manager by a pharmaceutical manufacturer or by an entity in the prescription drug supply chain, other than a covered individual, and which is:(a) Based on a pharmaceutical manufacturer's list price for a prescription drug;(b) Based on utilization;(c) Designed to maintain, for the pharmacy benefit manager, a net price for a prescription drug, during a specified period of time, in the event the pharmaceutical manufacturer's list price increases; or(d) Based on estimates regarding the quantity of a prescribed drug that will be dispensed by a pharmacy to covered individuals;(22) "Spread pricing," an amount charged or claimed by a pharmacy benefit manager that is in excess of the ingredient cost for a dispensed prescription drug, plus a dispensing fee paid directly or indirectly to a pharmacy, pharmacist, or other provider, on behalf of the third-party payor, less a pharmacy benefit management fee;(23) "Third-party payor," any entity, other than a covered individual, a covered individual's representative, or a healthcare provider, which is responsible for any amount of reimbursement for a prescription drug benefit, provided the term includes a health carrier and a health benefit plan;(24) "340B drug," a drug purchased through the 340B drug discount program by a 340B entity;(25) "340B drug discount program," a program that imposes limitations on the prices of drugs purchased by covered entities, in accordance with 42 U.S.C. § 256b (January 1, 2024);(26) "340B entity," a covered entity as defined in 42 U.S.C. § 256b(a)(4) (January 1, 2024);(27) "Trade secret," the same as set forth in § 37-29-1;(28) "Unaffiliated pharmacy," a dispensing pharmacy that is not: (a) Owned, in whole or in part, by a pharmacy benefit manager;(b) A subsidiary of a pharmacy benefit manager; or(c) An affiliate of a pharmacy benefit manager; and(29) "Wholesale distributor," the same as set forth in § 36-11A-25.SL 2004, ch 311, §1; SL 2023, ch 166, §1.Amended by S.L. 2024, ch. 203,s. 2, eff. 1/1/2025.Amended by S.L. 2023, ch. 166,s. 1, eff. 7/1/2023.This section is set out more than once due to postponed, multiple, or conflicting amendments.