PBM Reform

 

Occasionally, NCAP receives questions from members regarding North Carolina PBM-related laws. The following resource compiles existing PBM statutes, organized by categories, for which inquiries are commonly made. In addition, the resource provides a direct link to the Department of Insurance portal for filing PBM-related complaints.

 

Contents

Patient and Consumer Protections 

Anti-Gag Clause  

  • 58-56A-3(a) 

    • Guarantees patients access to cost information by protecting pharmacists' ability to discuss out-of-pocket costs and less expensive prescription options.

Prescription Cost Sharing 

  • § 58-3-182.  

    • Reduces patients' out-of-pocket prescription costs by requiring insurers to apply most manufacturer rebates when calculating prescription drug cost-sharing. 

Pharmacy of Choice 

  • § 58-51-37. 

    • Protects patient pharmacy choice by ensuring equal access, cost-sharing, reimbursement, and treatment across participating pharmacies while prohibiting patient steering and mandatory mail-order requirements. 

  • § 58-56A-15. 

    • Requires PBM pharmacy networks to satisfy Medicare Part D convenient access standards, ensuring patients have convenient access to participating pharmacies.

PBM Affiliates HIPAA 

  • § 58-56A-20. 

    • Protects patient privacy by prohibiting PBMs from improperly sharing identifiable prescription and prescriber information with affiliated companies.

Access to Non-formulary and Restricted Access Prescription Drugs 

  • § 58‑3‑221. 

    • Protects patients' access to medically necessary medications by requiring insurers to provide a timely exception process when formulary or step therapy restrictions are not appropriate.

Emergency Refills and Continued Medication Access  

  • § 58-3.228. 

    • Ensures patients can refill or replace needed prescription medications early during a declared emergency or disaster without being blocked by "refill too soon" restrictions. 

Pharmacy and Pharmacist Protections  

Anti-Gag Clause  

  • 58-56A-3(a) 

    • Protects pharmacists' right to discuss prescription costs and lower-cost alternatives with patients without PBM penalties

PBM Reimbursement Disparities Between Affiliate and Non-Affiliate 

  •  § 58-56A-20. 

    • Prohibits PBMs from reimbursing affiliated pharmacies more than non-affiliated pharmacies for the same drug or service.

PBM Network Adequacy  

  • § 58-56A-15. 

    • Any willing provider’ requires PBMs to provide equal access to pharmacy networks for qualified pharmacies on the same terms as comparable network participants. 

    • Contract transparency gives pharmacies the right to receive and review the contract terms, rights, and obligations that apply to their participation. 

    • Payment protections prevent PBMs from withholding payment for properly rendered services, even if a pharmacy leaves the network (except in cases of fraud, waste, or abuse). 

    • Specialty pharmacy fairness prohibits PBMs from excluding qualified specialty pharmacies or requiring unnecessary accreditations to join a network. 

    • No network participation fees, prohibits PBMs from charging pharmacies fees simply to participate in a pharmacy network.  

  •  § 58-51-37. 

    • ‘Any willing pharmacy’ requires insurers to offer qualified pharmacies the opportunity to participate in health plan networks if they accept the insurer's contract terms, while protecting patient choice and prohibiting discriminatory treatment. 

    • ‘Use of Agent’ prohibits copayment manipulation and requires uniform treatment of all covered patients. 

    • Offer to participate requires equal network participation opportunities and advance notice to pharmacies. 

    • Rebates & marketing incentives require equal access to rebates and incentives for similarly situated pharmacies. 

Audits, Claims, and Appeals 

  • § 58-56A-5.  

    • Maximum allowable cost price and appeals process 

  • § 58-56A-4.      

    • Fee transparency 

    • Professional judgement 

    • Dispensing authority 

    • Anti-retaliation 

    • Claims finality 

    • Below acquisition cost reimbursement protections 

Prescription Shipping and Delivery 

  • § 58-56A-3(b), (b1) 

    • Protects pharmacies' ability to offer medication delivery and charge a disclosed shipping fee without PBM restrictions. 

Contracts with 340B Covered Entities 

  • § 58-56A-50. 

    • Prohibits PBMs from restricting network participation, reducing reimbursement, or imposing additional fees based on a pharmacy's 340B status.

State of Emergency Pharmacy Protections 

  • § 58-3.228. 

    • Emergency refill reimbursement requires insurers and PBMs to override refill restrictions and reimburse pharmacies for eligible emergency prescription fills during declared disasters. 

Access to Non-formulary and Restricted Access Prescription Drugs 

  • § 58‑3‑221. 

    • Protects providers and pharmacies through transparent formularies, timely coverage exception decisions, and evidence-based step therapy requirements.  

Reimbursement Rates in Medicaid Managed Care 

  • Section 11.(a) section 9D.19A. Of S.L. 2021-180, as amended by S.L. 2022-74 Pg. 20  

    • Extends reimbursement at Medicaid fee-for-service rates (NADAC + dispensing fee) through 2031. 

Pharmacy Services Administration Organization (PSAO) 

  • Section 2.1. § 58-56B-20. Pg. 6 

    • Prohibition on price discrimination 

North Carolina Department of Insurance 

Enforcement 

Licensure Requirements for PBM 

Reporting Requirements for Transparency  

  • § 58-56A-22.   

    • Requires PBMs to annually disclose key financial practices, including rebates, fees, affiliate relationships, reimbursement differences, and aggregate spread data, to the Department of Insurance.

Violations 

Civil Penalties for Violations & Administrative Proceedings 

Penalty for Failure to Report (Manufacturers) 

File a complaint with the North Carolina Department of Insurance 
Phone: 855-408-1212 

PBM Accountability 

Fiduciary duties and claims data transparency 

State health plan PBM contracting 

Spread Pricing Reports 

  • § 58-56A-6. 

    • Requires PBMs to quarterly disclose spread pricing by drug to insurers and employers, increasing transparency into PBM pricing practices. 

Health Benefit Plan Requirements Apply to PBM 

Prescription Drug Market Transparency 

  • § 90-85.56. 

    • Promotes transparency and accountability for prescription drug pricing by requiring manufacturer reporting and disclosures. 

  • § 90-85.58. 

    • Requires DHHS to collect manufacturer pricing data, maintain a public transparency portal, and issue annual prescription drug pricing reports. 

NC BOP Reporting  

  • § 90-85.42. 

    • Requires annual reporting on the number of licensed pharmacies and five-year pharmacy opening and closure trends by pharmacy size. 

Statutory-related Definitions 

Health Benefit Plan Applicability