Report Title:

Pharmaceutical Benefit Management Companies

Description:

Establishes duties and obligations for pharmaceutical benefit management companies who administer or manage prescription drug benefit coverage to their clients.

THE SENATE

S.B. NO.

775

TWENTY-SECOND LEGISLATURE, 2003

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

relating to PHARMACEUTICAL BENEFIT MANAGEMENT COMPANIES.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. The Hawaii Revised Statutes is amended by adding a new section to be appropriately designated and to read as follows:

" -A Pharmaceutical benefit management companies. (a) Pharmaceutical benefit management companies and other similar entities that administer or manage prescription drug coverage shall discharge their obligations to their clients, including all private employee benefit plans, unions, third party administrators, insurance companies, and state or federal governments and to all covered entities' members, employees, participants and beneficiaries, with the standards of conduct applicable to a fiduciary under the Employee Retirement Income Security Act of 1974. Without limitation, pharmaceutical benefit management companies, shall:

(1) Discharge their duties with respect to any and all covered entities and covered individuals solely in the interest of the covered entities and covered individuals, and for the exclusive purpose of providing benefits to the covered entities and covered individuals, and defraying reasonable expenses of administering the covered entities' and covered individuals' benefits;

(2) Discharge their duties with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent fiduciary acting in similar capacity and familiar with those matters would use in the conduct of an enterprise of a similar character and with similar aims;

(3) Discharge their duties in accordance with the contract governing the covered entities' prescription drug benefit coverage, insofar as the contract is consistent with the provisions of this section and of the Employee Retirement Income Security Act of 1974;

(4) Provide any and all information requested by covered entities to ensure that covered entities are able to ascertain all material activities being undertaken on their behalf, or on behalf of covered individuals; and

(5) Notify covered entities in writing of any proposed or ongoing activity that involves, directly or indirectly, any conflict of interested as contemplated by the standards applicable to a fiduciary under the Employee Retirement Income Security Act of 1974.

(b) This section shall apply to all pharmaceutical benefit management companies residing or doing business in, or providing prescription drug benefit coverage to covered entities or covered individuals residing or doing business in, the State."

SECTION 2. New statutory material is underscored.

SECTION 3. This Act shall take effect on July 1, 2003.

INTRODUCED BY:

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