Extends limits on prescription drug costs

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 also provides for the regulation of health insurers by the Department of Insurance.

Existing law prohibits the formulary or formularies for outpatient prescription drugs maintained by a health care service plan or health insurer from discouraging the enrollment of individuals with health conditions and from reducing the generosity of the benefit for enrollees or insureds with a particular condition. Existing law, until January 1, 2020, provides that the copayment, coinsurance, or any other form of cost sharing for a covered outpatient prescription drug for an individual prescription shall not exceed $250 for a supply of up to 30 days, except as specified. Existing law, until January 1, 2020, requires a nongrandfathered individual or small group plan contract or policy to use specified definitions for each tier of a drug formulary.

This bill would extend those provisions until January 1, 2024. The bill would, until January 1, 2024, prohibit a drug formulary maintained by a health care service plan or health insurer from containing more than 4 tiers, as specified. The bill would require a prescription drug benefit to provide that an enrollee or an insured is not required to pay more than the retail price for a prescription drug if a pharmacy’s retail price is less than the applicable copayment or coinsurance amount, and the payment rendered by an enrollee or insured would constitute the applicable cost sharing, as specified.

Existing law requires a plan contract or policy to cover a single-tablet prescription drug regimen for combination antiretroviral drug treatments that are medically necessary for the treatment of AIDS/HIV, as specified.

This bill would, until January 1, 2023, extend that coverage requirement to combination antiretroviral drug treatments that are medically necessary for the prevention of AIDS/HIV, as specified. Because a willful violation of the bill’s requirements relative to health care service plans would be a crime, the 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.