Drug formularies.

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 provides for the regulation of health insurers by the Department of Insurance. Existing law requires a health care service plan or health insurer that provides prescription drug benefits and maintains one or more drug formularies to meet certain criteria for its formularies and the placement of drugs on formularies. This bill would prohibit a health care service plan or health insurer that provides prescription drug benefits and maintains one or more drug formularies from making changes to a formulary during a plan or policy year, except in specified circumstances. The bill would require a plan or insurer, or its pharmacy benefit manager, to report to the appropriate department any changes made to a formulary during a plan or policy year within 30 days of the change being made. The bill would authorize the departments to impose administrative penalties, as specified, for a violation of these provisions. The bill would authorize the departments to conduct audits related to these provisions. Because a willful violation of the bill's provisions by a health care service plan 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.