STAND. COM. REP. NO. 1485

Honolulu, Hawaii

RE:    H.B. No. 252

       H.D. 1

       S.D. 2

Honorable Donna Mercado Kim

President of the Senate

Twenty-Eighth State Legislature

Regular Session of 2015

State of Hawaii

Madam:

     Your Committees on Commerce and Consumer Protection and Ways and Means, to which was referred H.B. No. 252, H.D. 1, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO PHARMACY BENEFIT MANAGERS,"

beg leave to report as follows:

     The purpose and intent of this measure is to:

     (1)  Establish requirements for a pharmacy benefit manager that reimburses a contracting pharmacy for a drug on a maximum allowable cost basis; and

     (2)  Require pharmacy benefit managers to have a clearly defined process for a contracting pharmacy to appeal the maximum allowable cost for a drug on a maximum allowable cost list and establish requirements for that process.

     Your Committees received testimony in support of this measure from the Hawaii Community Pharmacy Association, Times Pharmacy, and two individuals.  Your Committees received comments on this measure from CVS Health.

     Your Committees find that the majority of prescriptions dispensed by a pharmacy are generic drugs, which are reimbursed using schedules known as maximum allowable cost.  Maximum allowable cost is a common cost management tool that specifies the reimbursement limit for a particular strength and dosage of generic prescription drugs.  Your Committees further find that there currently is no formal process for maximum allowable cost appeals.  Accordingly, this measure establishes requirements for pharmacy benefit managers that reimburse pharmacies for prescription drugs on a maximum allowable cost basis and sets parameters for pharmacy benefit managers and pharmacies to establish standards for a maximum allowable cost appeals process.

     Your Committees have amended this measure by making technical, nonsubstantive amendments for the purposes of clarity and consistency.

     As affirmed by the records of votes of the members of your Committees on Commerce and Consumer Protection and Ways and Means that are attached to this report, your Committees are in accord with the intent and purpose of H.B. No. 252, H.D. 1, S.D. 1, as amended herein, and recommend that it pass Third Reading in the form attached hereto as H.B. No. 252, H.D. 1, S.D. 2.

Respectfully submitted on behalf of the members of the Committees on Commerce and Consumer Protection and Ways and Means,

________________________________ JILL N. TOKUDA, Chair

________________________________ ROSALYN H. BAKER, Chair