California Health and Safety Code § 1385.001

For the purposes of this article: (a) “Affiliated entity” means any of the following: (1) An applicable group purchasing organization, drug manufacturer, distributor, wholesaler, rebate aggregator or other purchasing entity designed to aggregate rebates, or associated third party. (2) A subsidiary, parent, affiliate, or subcontractor of a health care service plan or health insurer, an entity that provides pharmacy benefit management services on behalf of a health care service plan or health insurer, or an entity described in paragraph (1). (3) Any other entity as designated by the department. (b) “Affiliated pharmacy” means a contract pharmacy that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with a pharmacy benefit manager. (c) “Claim” means a request for payment for administering, filling, or refilling a drug or for providing a pharmacy service or a medical supply or device to an enrollee or insured. (d) “Contract pharmacy” means a pharmacy that contracts directly or through a pharmacy services administration organization with a pharmacy benefit manager. (e) “Department” means the Department of Managed Health Care. (f) “Director” means the Director of the Department of Managed Health Care. (g) “Drug” has the same meaning as defined in Section 4025 of the Business and Professions Code. (h) “Group purchasing organization” means a third party or affiliated person, including an out-of-state or international organization, employed by, contracted with, affiliated with, under common ownership or control by, or otherwise utilized by an entity that provides pharmacy benefit management services or by a pharmacy benefit manager to negotiate, obtain, or otherwise procure rebates from drug manufacturers or wholesalers. (i) “Health insurer” means an entity licensed to provide health insurance, as defined in Section 106 of the Insurance Code. (j) “Manufacturer” has the same meaning as defined in Section 4033 of the Business and Professions Code. (k) “Nonaffiliated pharmacy” means a contract pharmacy that directly, or indirectly through one or more intermediaries, does not control, is not controlled by, and is not under common control with a pharmacy benefit manager. (l) “Passthrough pricing model” means a payment model used by a pharmacy benefit manager in which the payments made by the health care service plan or health insurer client to the pharmacy benefit manager for the covered outpatient drugs are both of the following: (1) Equivalent to the payments the pharmacy benefit manager makes to a pharmacy or provider for those drugs, including any contracted professional dispensing fee between the pharmacy benefit manager and its network of pharmacies. That dispensing fee would be paid if the health care service plan or health insurer was making the payments directly. (2) Passed through in their entirety by the health care service plan or health insurer client or by the pharmacy benefit manager to the pharmacy or provider that dispenses the drugs, and the payments are made in a manner that is not offset by any reconciliation. (m) “Payer” means a health care service plan licensed by the department or a health insurer licensed by the Department of Insurance. (n) “Person” has the same meaning as defined in Section 4035 of the Business and Professions Code. (o) “Personal representative” means an individual who has authority to make a health care decision on behalf of another individual pursuant to Division 4.7 (commencing with Section 4600) of the Probate Code. (p) “Pharmacist” has the same meaning as defined in Section 4036 of the Business and Professions Code. (q) “Pharmacist services” means products, goods, and services, or any combination of products, goods, and services, provided as a part of the practice of pharmacy. (r) “Pharmacy” has the same meaning as defined in Section 4037 of the Business and 

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