2017 - 2018 LEGISLATURE
November 9, 2017 - Introduced by Representatives Kolste, Sargent, Zamarripa,
Anderson, Berceau, Pope, Subeck, Spreitzer, Considine, Billings,
Horlacher, Brostoff, Fields, Hesselbein, Vruwink, Ohnstad, Hintz, Young,
Shankland, Zepnick, Riemer, Crowley, Genrich, Hebl and Sinicki,
cosponsored by Senators Erpenbach and Carpenter. Referred to Committee
1An Act to amend
601.43 (1) (a); and to create
chapter 649 of the statutes; 2relating to: registration of pharmacy benefit managers, granting rule-making
3authority, and providing a penalty.
Analysis by the Legislative Reference Bureau
This bill generally allows the commissioner of insurance to regulate pharmacy
benefit managers. A pharmacy benefit manager is an entity that procures
prescription drugs at a negotiated rate for dispensation; administers or manages
prescription drug benefits; performs mail service pharmacy services; processes
pharmacy benefit claims; develops clinical formularies and performs management
services; contracts and administers prescription drug rebates; or conducts disease
management programs or patient compliance, therapeutic intervention, and generic
The bill prohibits a person, except an insurer already regulated by the
commissioner, from performing any activities of a pharmacy benefit manager in this
state without first registering with the commissioner. Certain pharmacy benefit
managers must be licensed by the Pharmacy Examining Board and registered as a
pharmacy benefit manager. If the Pharmacy Examining Board revokes the
pharmacy or distributor license for such a pharmacy benefit manager, the
commissioner must revoke the pharmacy benefit manager registration. An
applicant for registration as a pharmacy benefit manager must file an appropriate
application and pay any registration fee set by the commissioner. A registration is
valid for one year. The commissioner may refuse to register a pharmacy benefit
manager for which a previous registration was suspended or revoked.
Under the bill, the commissioner, after a hearing, may suspend or revoke a
registration of a pharmacy benefit manager if the registered pharmacy benefit
manager, or an officer, director, or employee of a registered pharmacy benefit
manager does any of the actions specified in the bill. The commissioner may
promulgate rules necessary to carry out the intent of pharmacy benefit manager
registration. The bill also allows the commissioner to use his or her authority that
is granted to regulate insurers to similarly regulate pharmacy benefit managers,
including the authority to require reports, conduct examinations, and issue orders.
For further information see the state fiscal estimate, which will be printed as
an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
601.43 (1) (a) of the statutes is amended to read:
(a) Insurers, other licensees and other persons subject to regulation. 3
Whenever the commissioner deems it necessary in order to inform himself or herself 4
about any matter related to the enforcement of chs. 600 to 647
, the 5
commissioner may examine the affairs and condition of any licensee
under chs. 600 to 647 and 649
or applicant for a license or,
of any person or organization of persons doing or in process of organizing 8
to do an insurance business in this state, and of any advisory organization serving 9
any of the foregoing in this state.
Chapter 649 of the statutes is created to read:
pharmacy benefit managers
In this chapter:
“Pharmacy benefit manager" means an entity that does any of the following:
(a) Procures prescription drugs at a negotiated rate for dispensation in this 16
state to an insured.
(b) Administers or manages prescription drug benefits provided to an insured.
(c) Performs any of the following services with regard to the administration of 2
1. Mail service pharmacy.
2. Claims processing or retail network management and payment of claims to 5
pharmacies for prescription drugs dispensed to an insured.
3. Clinical formulary development and management services.
4. Prescription drug rebate contracting and administration.
5. Patient compliance, therapeutic intervention, and generic substitution 9
6. Disease management programs.
“Prescription drug” has the meaning given in s. 450.01 (20).
“Registrant" means a pharmacy benefit manager that is registered under 13
14649.05 Registration of pharmacy benefit managers.
(a) Except as 15
provided in par. (b), no person may perform any activities of a pharmacy benefit 16
manager in this state without first registering with the commissioner under this 17
(b) A pharmacy benefit manager who is an insurer with a current certificate 19
of authority issued under s. 601.04 is not required to register under this section.
(c) 1. Any pharmacy benefit manager that is required to obtain a license under 21
s. 450.06, 450.065, or 450.071 shall also register under this chapter.
2. If the pharmacy examining board revokes a license that had been granted 23
under s. 450.06, 450.065, or 450.071 to a registrant, the registrant shall notify the 24
commissioner of the revocation. The commissioner shall revoke the registration 25
under this chapter.
An applicant for registration as a pharmacy benefit manager shall do all 2
of the following:
(a) File with the commissioner an application on a form that the commissioner 4
(b) Pay any registration fee set by the commissioner.
The commissioner shall register any pharmacy benefit manager that meets 7
the requirements of this chapter and any requirements the commissioner requires 8
of applicants. Registration under this section is valid for one year unless registration 9
is suspended or revoked. The commissioner may refuse to register any pharmacy 10
benefit manager for which a previous registration was suspended or revoked.
11649.10 Powers of the commissioner.
The commissioner may do any of the 12
Promulgate rules necessary to carry out the intent of this chapter.
Use authority granted under ss. 601.41, 601.42, 601.43, 601.44, 601.61, 15
601.62, 601.63, and 601.64 to enforce this chapter.
16649.20 Suspension or revocation of registration; penalty. (1)
commissioner, after a hearing, may suspend or revoke the registration of a 18
registrant, if the registrant or an officer, director, or employee of the registrant does 19
any of the following:
(a) Knowingly makes or causes to be made a false statement or 21
misrepresentation of a material fact in an application for registration under s. 22
(b) Obtains or attempts to obtain a registration under s. 649.05 through 24
misrepresentation or fraud.
(c) Misappropriates or converts to the registrant's own use or improperly 2
withholds insurance premiums or contributions held in a fiduciary capacity, except 3
for any interest earnings received by the pharmacy benefit manager and disclosed 4
to the entity with which it has a contract to provide services.
(d) Commits fraudulent, coercive, or dishonest practices in the transaction of 6
business as a pharmacy benefit manager.
(e) Has a license or registration suspended, revoked, or not renewed in any 8
other state, district, territory, or province that impacts business conducted in this 9
(f) Knowingly violates a requirement of this chapter or a rule promulgated 11
under this chapter.
Any person who performs activities of a pharmacy benefit manager in this 13
state without a valid registration under s. 649.05 is subject to a forfeiture of $500 for 14
each day of violation.
This act takes effect on the first day of the 7th month beginning after 17