§ 280-a. Pharmacy benefit managers. 1. Definitions. As used in this\nsection, the following terms shall have the following meanings:\n (a) "Health plan " means an entity for which a pharmacy benefit\nmanager provides pharmacy benefit management services and that is a\nhealth benefit plan or other entity that approves, provides, arranges\nfor, or pays or reimburses in whole or in part for health care items or\nservices, to include at least prescription drugs, for a substantial\nnumber of beneficiaries who work or reside in this state. The\nsuperintendent shall determine, in his or her sole discretion, by\nregulation how the phrase "a substantial number of beneficiaries who\nwork or reside in this state" shall be interpreted.\n (b) "Pharmacy benefit management services" means the management or\nadministration of prescription drug benefits for a health plan, directly\nor through another entity, and regardless of whether the pharmacy\nbenefit manager and the health plan are related, or associated by\nownership, common ownership, organization or otherwise; including the\nprocurement of prescription drugs to be dispensed to patients, or the\nadministration or management of prescription drug benefits, including\nbut not limited to, any of the following:\n (i) mail service pharmacy;\n (ii) claims processing, retail network management, or payment of\nclaims to pharmacies for dispensing prescription drugs;\n (iii) clinical or other formulary or preferred drug list development\nor management;\n (iv) negotiation or administration of rebates, discounts, payment\ndifferentials, or other incentives, for the inclusion of particular\nprescription drugs in a particular category or to promote the purchase\nof particular prescription drugs;\n (v) patient compliance, therapeutic intervention, or generic\nsubstitution programs;\n (vi) disease management;\n (vii) drug utilization review or prior authorization;\n (viii) adjudication of appeals or grievances related to prescription\ndrug coverage;\n (ix) contracting with network pharmacies; and\n (x) controlling the cost of covered prescription drugs.\n (c) "Pharmacy benefit manager" means any entity that performs pharmacy\nbenefit management services for a health plan.\n (d) "Maximum allowable cost price" means a maximum reimbursement\namount set by the pharmacy benefit manager for therapeutically\nequivalent multiple source generic drugs.\n (e) "Controlling person" means any person or other entity who or which\ndirectly or indirectly has the power to direct or cause to be directed\nthe management, control or activities of a pharmacy benefit manager.\n (f) "Covered individual" means a member, participant, enrollee,\ncontract holder or policy holder or beneficiary of a health plan.\n (g) "License" means a license to be a pharmacy benefit manager, under\narticle twenty-nine of the insurance law.\n (h) "Spread pricing" means the practice of a pharmacy benefit manager\nretaining an additional amount of money in addition to the amount paid\nto the pharmacy to fill a prescription.\n (i) "Superintendent" means the superintendent of financial services.\n 2. Duty, accountability and transparency. (a) (i) The pharmacy benefit\nmanager shall have a duty and obligation to perform pharmacy benefit\nmanagement services with care, skill, prudence, diligence, and\nprofessionalism.\n (ii) In addition to the duties as may be prescribed by regulation\npursuant to article twenty-nine of the insurance law:\n (1) A pharmacy benefit manager interacting with a covered individual\nshall have the same duty to a covered individual as the health plan for\nwhom it is performing pharmacy benefit management services.\n (2) A pharmacy benefit manager shall have a duty of good faith and\nfair dealing with all parties, including but not limited to covered\nindividuals and pharmacies, with whom it interacts in the performance of\npharmacy benefit management services.\n (b) All funds received by the pharmacy be
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