SENATE BILL 503
57th legislature - STATE OF NEW MEXICO - first session, 2025
INTRODUCED BY
Larry R. Scott
AN ACT
RELATING TO PHARMACIES; PROHIBITING CERTAIN PHARMACY BENEFITS MANAGER PRACTICES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. Section 59A-61-2 NMSA 1978 (being Laws 2014, Chapter 14, Section 2, as amended) is amended to read:
"59A-61-2. DEFINITIONS.--As used in the Pharmacy Benefits Manager Regulation Act:
A. "maximum allowable cost" means the maximum amount that a pharmacy benefits manager will reimburse a pharmacy for the cost of a generic drug;
B. "maximum allowable cost list" means a searchable, electronic and internet-based listing of drugs used by a pharmacy benefits manager setting the maximum allowable cost on which reimbursement to a pharmacy or pharmacist is made;
C. "obsolete" means a product that is listed in national drug pricing compendia but is no longer available to be dispensed based on the expiration date of the last lot manufactured;
D. "patient steering" means:
(1) a pharmacy benefits manager directing patients to use a preferred pharmacy through mandatory mail order requirements;
(2) a pharmacy benefits manager requiring a patient to use a restricted network of pharmacies that only consists of pharmacies approved by the pharmacy benefits manager; or
(3) the use of copay differentials for pharmacies contracted with the pharmacy benefits manager and pharmacies that are not contracted with the pharmacy benefits manager;
[D.] E. "pharmacist" means an individual licensed as a pharmacist by the board of pharmacy;
[E.] F. "pharmacy" means a licensed place of business where drugs are compounded or dispensed and pharmacist services are provided;
[F.] G. "pharmacy benefits management" means a service provided to or conducted by a health plan as defined in Section 59A-16-21.1 NMSA 1978 or health insurer that involves:
(1) prescription drug claim administration;
(2) pharmacy network management;
(3) negotiation and administration of prescription drug discounts, rebates and other benefits;
(4) design, administration or management of prescription drug benefits;
(5) formulary management;
(6) payment of claims to pharmacies for dispensing prescription drugs;
(7) negotiation or administration of contracts relating to pharmacy operations or prescription benefits; or
(8) any other service determined by the superintendent as specified by rule to be a pharmacy benefits management activity;
[G.] H. "pharmacy benefits manager" means an entity that provides pharmacy benefits management services;
[H.] I. "pharmacy benefits manager affiliate" means a pharmacy or pharmacist that directly or indirectly, through one or more intermediaries, owns or controls, is owned or controlled by or is under common ownership or control with a pharmacy benefits manager;
[I.] J. "pharmacy services administrative organization" means an entity that contracts with a pharmacy or pharmacist to act as the pharmacy or pharmacist's agent with respect to matters involving a pharmacy benefits manager or third-party payor, including negotiating, executing or administering contracts with the pharmacy benefits manager or third-party payor; [and]
K. "spread pricing" means a pharmacy benefits manager reimbursing a pharmacy for a prescription and billing an insurer or an employer that provides health insurance at a higher price than was reimbursed for the same prescription; and
[J.] L. "superintendent" means the superintendent of insurance."
SECTION 2. Section 59A-61-5 NMSA 1978 (being Laws 2014, Chapter 14, Section 5, as amended) is amended to read:
"59A-61-5. PHARMACY BENEFITS MANAGER CONTRACTS--CERTAIN PRACTICES PROHIBITED--CERTAIN DISCLOSURES REQUIRED UPON REQUEST.--
A. A pharmacy benefits manager shall not require that a pharmacy participate in one contract in order to participate in another contract.
B. A pharmacy benefits manager shall provide to a pharmacy by electronic mail, facsimile or certified mail, at least thirty calendar days prior to its execution, a contract written in plain English.
C. A contract between a pharmacy benefits manager and a pharmacy shall identify the industry standard reimbursement practice that the pharmacy benefits manager will use to determine a reimbursement amount, unless the contract is modified in writing to specify another industry standard practice.
D. The provisions of the Pharmacy Benefits Manager Regulation Act shall not be waived, voided or nullified by contract.
E. A pharmacy benefits manager shall not:
(1) cause or knowingly permit the use of any advertisement, promotion, solicitation, representation, proposal or offer that is untrue, deceptive or misleading;
(2) require pharmacy validation and revalidation standards inconsistent with, more stringent than or in addition to federal and state requirements for licensure and operation as a pharmacy in this state;
(3) prohibit a pharmacy or pharmacist from:
(a) mailing or delivering drugs to a patient as an ancillary service;
(b) providing a patient information regarding the patient's total cost for pharmacist services for a prescription drug; or
(c) discussing information regarding the total cost for pharmacist services for a prescription drug or from selling a more affordable alternative to the insured if a more affordable alternative is available;
(4) require or prefer a generic drug over its generic therapeutic equivalent;
(5) prohibit, restrict or limit disclosure of information by a pharmacist or pharmacy to the superintendent; [or]
(6) prohibit, restrict or limit pharmacies or pharmacists from providing to state or federal government officials general information for public policy purposes;
(7) conduct or participate in patient steering; or
(8) conduct or participate in spread pricing.
F. A pharmacy benefits manager or health benefit plan shall not impose a fee on a pharmacy for scores or metrics or both scores and metrics. Nothing in this subsection prohibits a pharmacy benefits manager or health benefit plan from offering incentives to a pharmacy based on a score or metric; provided that the incentive is equally available to all in-network pharmacies.
G. A clerical or recordkeeping error identified during an audit of a pharmacy conducted by a pharmacy benefits manager, such as a typographical error, scrivener's error, omission or computer error, shall not, in and of itself, constitute fraud or intentional misrepresentation and shall not be the basis of a recoupment unless the error results in an actual overpayment to the pharmacy or the wrong medication being dispensed to the patient.
[G.] H. Within seven business days of a request by the superintendent or a contracted pharmacy or pharmacist, a pharmacy benefits manager or pharmacy services administrative organization shall provide as appropriate:
(1) a contract;
(2) an agreement;
(3) a claim appeal document;
(4) a disputed claim transaction document or price list; or
(5) any other information specified by law.
[H.] I. In a time and manner required by rules promulgated by the superintendent, a pharmacy benefits manager shall issue to the superintendent a network adequacy report describing the pharmacy benefits manager network and the pharmacy benefits manager network's accessibility to insureds statewide.
[I.] J. Pursuant to the provisions of Section 59A-4-3 NMSA 1978, the superintendent, or the superintendent's designee, may examine the books, documents, policies, procedures and records of a pharmacy benefits manager to determine compliance with applicable law. The pharmacy benefits manager shall pay the costs of the examination. At the request of a person who provides information in response to a complaint, investigation or examination, the superintendent may deem the information confidential."
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