In this subtitle the following words have the meanings indicated.
“Independent pharmacy” means a pharmacy operating within the State that is under common ownership with not more than two other pharmacies.
“Pharmacy benefits manager” has the meaning stated in § 15–1601 of this title.
“Pharmacy services administrative contract” means a contractual agreement between a pharmacy services administrative organization and an independent pharmacy under which a pharmacy services administrative organization agrees to negotiate with purchasers or pharmacy benefits managers on behalf of one or more independent pharmacies.
“Pharmacy services administrative organization” means an entity that provides a contracted pharmacy with contracting administrative services relating to prescription drug benefits.
“Pharmacy services administrative organization” does not include a nonprofit health maintenance organization that:
operates as a group model;
provides services solely to a member or patient of the nonprofit health maintenance organization; and
furnishes services through the internal pharmacy operations of the nonprofit health maintenance organization.
“Purchaser” means the State Employee and Retiree Health and Welfare Benefits Program, an insurer, a nonprofit health services plan, or a health maintenance organization that provides prescription drug coverage or benefits in the State.
“Purchaser” does not include a person that provides prescription drug coverage or benefits through plans subject to the Employee Retirement Income Security Act of 1974 and does not provide prescription drug coverage or benefits through insurance, unless the person is a multiple employer welfare arrangement as defined in § 514(b)(6)(A)(ii) of the Employee Retirement Income Security Act of 1974.
On or after July 1, 2021, a pharmacy services administrative organization shall register with the Commissioner as a pharmacy services administrative organization before providing services as a pharmacy services administrative organization in the State to independent pharmacies.
An applicant for registration shall:
file with the Commissioner an application on the form that the Commissioner provides; and
pay to the Commissioner a registration fee set by the Commissioner.
A pharmacy services administrative organization registration expires on the second September 30 after its effective date unless it is renewed as provided under this section.
A pharmacy services administrative organization may renew its registration for an additional 2–year term if the pharmacy services administrative organization:
otherwise is entitled to be registered;
files with the Commissioner a renewal application on the form that the Commissioner requires; and
pays to the Commissioner a renewal fee set by the Commissioner.
A pharmacy services administrative organization that has not registered with the Commissioner may not enter into an agreement or a contract with an independent pharmacy.
Subject to the applicable hearing provisions of Title 2 of this article, the Commissioner may deny a registration to a pharmacy services administrative organization or refuse to renew, suspend, or revoke the registration of a pharmacy services administrative organization if the pharmacy services administrative organization, or an officer, a director, or an employee of the pharmacy services administrative organization:
makes a material misstatement or misrepresentation in an application for registration;
fraudulently or deceptively obtains or attempts to obtain a registration;
in connection with the administration of pharmacy services administrative organization services, commits fraud or engages in illegal activities; or
violates this subtitle or a regulation adopted under this subtitle.
A pharmacy services administrative organization shall maintain adequate books and records regarding each independent pharmacy for which the pharmacy services administrative organization provides services as a pharmacy services administrative organization:
in accordance with prudent standards of record keeping;
for the duration of the agreement between the pharmacy services administrative organization and the independent pharmacy; and
for 3 years after the pharmacy services administrative organization ceases to provide services as a pharmacy services administrative organization for the independent pharmacy.
Whenever the Commissioner considers it advisable, the Commissioner may examine the affairs, transactions, accounts, and records of a registered pharmacy services administrative organization.
The examination shall be conducted in accordance with § 2–207 of this article.
The expense of the examination shall be paid in accordance with § 2–208 of this article.
The reports of the examination and investigation shall be issued in accordance with § 2–209 of this article.
The Commissioner may adopt regulations to implement this subtitle.
This subtitle may not be construed to diminish the authority of the Office of the Attorney General or the Commissioner to obtain information relating to a pharmacy services administrative organization and use the information in any proceeding.
A pharmacy services administrative contract or an amendment to a pharmacy services administrative contract may not become effective unless:
at least 60 days before the contract or amendment is to become effective, the pharmacy services administrative organization files the contract or, if required, amendment with the Commissioner in the form required by the Commissioner; and
the Commissioner does not disapprove the filing within 60 days after the contract or amendment is filed.
Notice from the Commissioner that a filed contract or amendment to a contract may be used in the State constitutes a waiver of any unexpired part of the filing period.
The Commissioner shall adopt regulations to:
establish the circumstances under which the Commissioner may disapprove a contract; and
specify the types of amendments to a contract required to be filed under subsection (a) of this section.
A pharmacy services administrative contract shall include a provision that requires the pharmacy services administrative organization to provide to the independent pharmacy an electronic or paper copy of any contracts, amendments, payment schedules, or reimbursement rates within 5 working days after the execution of a contract, or an amendment to a contract, signed on behalf of the independent pharmacy by the pharmacy services administrative organization.
A pharmacy services administrative contract may prohibit an independent pharmacy from disclosing the documents provided to the independent pharmacy under subsection (a) of this section to any competitor of the pharmacy services administrative organization.
Each pharmacy services administrative organization shall disclose to the Commissioner the extent of any ownership or control of the pharmacy services administrative organization by any parent company, subsidiary, or other organization that:
provides pharmacy services;
provides prescription drug or device services; or
manufactures, sells, or distributes prescription drugs, biologics, or medical devices.
Each pharmacy services administrative organization shall notify the Commissioner in writing within 5 working days after any material change in its ownership or control relating to any company, subsidiary, or other organization described under subsection (a) of this section.
Before entering into a pharmacy services administrative contract, a pharmacy services administrative organization shall provide to an independent pharmacy a written disclosure of ownership or control.
The disclosure required under subsection (a) of this section shall include the extent of any ownership or control by any parent company, subsidiary, or other organization that:
provides pharmacy services;
provides prescription drug or device services; or
manufactures, sells, or distributes prescription drugs, biologics, or medical devices.
A pharmacy services administrative contract shall require a pharmacy services administrative organization to notify an independent pharmacy in writing within 5 working days after any material change in its ownership or control related to any company, subsidiary, or other organization described under subsection (b) of this section.
Before entering into a contract with a purchaser or pharmacy benefits manager, a pharmacy services administrative organization shall provide to the purchaser or pharmacy benefits manager a written disclosure of ownership or control.
The disclosure required under subsection (a) of this section shall include the extent of any ownership or control by any parent company, subsidiary, or other organization that:
provides pharmacy services;
provides prescription drug or device services; or
manufactures, sells, or distributes prescription drugs, biologics, or medical devices.
A contract with a purchaser or pharmacy benefits manager shall provide that a pharmacy services administrative organization shall notify the purchaser or pharmacy benefits manager in writing within 5 working days after any material change in its ownership or control related to any company, subsidiary, or other organization described in subsection (b) of this section.
A pharmacy services administrative contract shall:
require all remittances for claims submitted by a pharmacy benefits manager or purchaser on behalf of an independent pharmacy to be passed by the pharmacy services administrative organization to the independent pharmacy within a reasonable amount of time; and
specify the reasonable amount of time in which the pharmacy services administrative organization is required to pass the remittances received from the pharmacy benefits manager or purchaser to the independent pharmacy.
A pharmacy services administrative organization that owns or is owned by, in whole or in part, an entity that manufactures, sells, or distributes prescription drugs, biologics, or medical devices may not require, as a condition of entering into a pharmacy services administrative contract, that an independent pharmacy purchase any drugs, biologics, or medical devices from the entity.
A pharmacy services administrative organization that owns or is owned by, in whole or in part, any entity that manufactures, sells, or distributes prescription drugs, biologics, or medical devices shall disclose to the Commissioner any agreement with an independent pharmacy under which the independent pharmacy purchases prescription drugs, biologics, or medical devices from the entity.
All disclosures made under this subtitle shall comply with the privacy standards established in federal and State law.
A contract or amendment to a contract submitted to the Commissioner as required by this subtitle:
is considered to be confidential and proprietary information; and
is not subject to disclosure under the Public Information Act.
A pharmacy services administrative organization shall establish appropriate policies and procedures to implement the requirements of this subtitle.
A pharmacy services administrative organization may not:
misrepresent pertinent facts or policy provisions that relate to an issue in a dispute or an appeal of a decision regarding a dispute;
refuse to pay or reimburse an independent pharmacy for an arbitrary or capricious reason based on all available information;
fail to settle a dispute promptly whenever liability is reasonably clear under one part of a policy or contract, in order to influence settlements under other parts of the policy or contract;
fail to act in good faith; or
engage in any activity that is a prohibited activity for a pharmacy benefits manager under Subtitle 16 of this title or a regulation adopted under Subtitle 16 of this title.
If the Commissioner determines that a pharmacy services administrative organization has violated any provision of this subtitle or any regulation adopted under this subtitle, the Commissioner may issue an order that requires a pharmacy services administrative organization to:
cease and desist from the identified violation and further similar violations;
take specific affirmative action to correct the violation;
make restitution of money, property, and other assets to a person that has suffered financial injury because of the violation; or
pay a fine in the amount determined by the Commissioner.
An order of the Commissioner issued under this section may be served on a pharmacy services administrative organization that is registered under § 15–2002 of this subtitle in the manner provided in § 2–204 of this article.
An order of the Commissioner issued under this section may be served on a pharmacy services administrative organization that is not registered under § 15–2002 of this subtitle in the manner provided in § 4–206 or § 4–207 of this article for service on an unauthorized insurer that does an act of insurance business in the State.
A request for a hearing on any order issued under this section does not stay that portion of the order that requires the pharmacy services administrative organization to cease and desist from the conduct identified in the order.
The Commissioner may file a petition in the circuit court of any county to enforce an order issued under this section, whether or not a hearing has been requested or, if requested, whether or not a hearing has been held.
If the Commissioner prevails in an action brought under this section, the Commissioner may recover, for the use of the State, reasonable attorney’s fees and the costs of the action.
In addition to any other enforcement action taken by the Commissioner under this section, the Commissioner may impose a civil penalty not exceeding $10,000 for each violation of this subtitle.
The Commissioner may adopt regulations:
to carry out this section; and
to establish a complaint process to address grievances and appeals brought in accordance with this section.
This section does not limit any other regulatory authority of the Commissioner under this article.