§ 58-29e-1

58-29E-1. Definitions.Terms used in this chapter mean:(1)'Brand name,' the same as set forth in §36-11-2;(2)'Covered individual,' a member, participant, enrollee, contract holder, policy holder, or beneficiary of a third-party payor who is provided health coverage by the third-party payor. The term includes a dependent or other individual provided health coverage through a policy, contract, or plan for a covered individual;(3)'Generic drug,' a chemically equivalent copy of a brand name drug with an expired patent;(4)'Health benefit plan,' the same as set forth in §58-17F-2;(5)'Health carrier,' the same as set forth in §58-17F-1;(6)'Interchangeable biological product,' the same as set forth in §36-11-2;(7)'Maximum allowable cost,' the maximum amount that a pharmacy may be reimbursed, as set by a pharmacy benefit manager or a third-party payor, for a brand name or a generic drug, an interchangeable biological product, or any other prescription drug and which may include:(a)The average acquisition cost;(b)The national average acquisition cost;(c)The average manufacturer price;(d)The average wholesale price;(e)The brand effective rate;(f)The generic effective rate;(g)Discount

verage acquisition cost;(b)The national average acquisition cost;(c)The average manufacturer price;(d)The average wholesale price;(e)The brand effective rate;(f)The generic effective rate;(g)Discount indexing;(h)Federal upper limits;(i)The wholesale acquisition cost; and(j)Any other term used by a pharmacy benefit manager or a health carrier to establish reimbursement rates for a pharmacy;(8)'Maximum allowable cost list,' a list of prescription drugs that:(a)Includes the maximum allowable cost for each prescription drug; and(b)Is used, directly or indirectly, by a pharmacy benefit manager;(9)'Pharmaceutical manufacturer,' any person engaged in the business of preparing, producing, converting, processing, packaging, labeling, or distributing a prescription drug, but not including a wholesale distributor or dispenser;(10)'Pharmacist,' the same as set forth in §36-11-2;(11)'Pharmacy,' the same as set forth in §36-11-2;(12)'Pharmacy benefit management,' the procurement of prescription drugs at a negotiated rate for dispensation within this state to covered individuals, the administration or management of prescription drug benefits provided by a third-party payor for the benefit of

drugs at a negotiated rate for dispensation within this state to covered individuals, the administration or management of prescription drug benefits provided by a third-party payor for the benefit of covered individuals, or any of the following services provided with regard to the administration of pharmacy benefits:(a)Mail service pharmacy;(b)Claims processing, retail network management, and payment of claims to pharmacies for prescription drugs dispensed to covered individuals;(c)Clinical formulary development and management services;(d)Rebate contracting and administration;(e)Certain patient compliance, therapeutic intervention, and generic substitution programs; and(f)Disease management programs involving prescription drug utilization;(13)'Pharmacy benefit management fee,' a fee that covers the cost of providing pharmacy benefit management, but does not exceed the value of the service performed by the pharmacy benefit manager;(14)'Pharmacy benefit manager,' a person that performs pharmacy benefit management, pursuant to a contract or other relationship with a third-party payor and includes:(a)A person acting in a contractual or employment relationship for a pharmacy benefit

s pharmacy benefit management, pursuant to a contract or other relationship with a third-party payor and includes:(a)A person acting in a contractual or employment relationship for a pharmacy benefit manager while providing pharmacy benefit management for a third-party payor; and(b)A mail service pharmacy;(15)'Pharmacy benefit manager affiliate,' a pharmacy that, or a pharmacist who, directly or indirectly, through one or more intermediaries, owns or controls, is owned and controlled by, or is under common ownership or control of, a pharmacy benefit manager;(16)'Pharmacy network,' pharmacies that have contracted with a pharmacy benefit manager to dispense or sell prescription drugs to covered individuals under a health benefit plan for which the prescription drug benefit is managed by a pharmacy benefit manager;(17)'Prescription drug,' a drug classified by the United States Food and Drug Administration as requiring a prescription by a health care practitioner, prior to being administered or dispensed to a patient, and including interchangeable biological products, brand names, and generic drugs;(18)'Prescription drug benefit,' a health benefit plan providing third-party payment or

ed or dispensed to a patient, and including interchangeable biological products, brand names, and generic drugs;(18)'Prescription drug benefit,' a health benefit plan providing third-party payment or prepayment for prescription drugs;(19)'Prescription drug order,' the same as set forth in §36-11-2;(20)'Proprietary information,' information on pricing, costs, revenue, taxes, market share, negotiating strategies, customers, and personnel held by a private entity and used for that private entity's business purposes;(21)'Rebate,' a discount or other negotiated price concession that is paid directly or indirectly to a pharmacy benefit manager by a pharmaceutical manufacturer or by an entity in the prescription drug supply chain, other than a covered individual, and which is:(a)Based on a pharmaceutical manufacturer's list price for a prescription drug;(b)Based on utilization;(c)Designed to maintain, for the pharmacy benefit manager, a net price for a prescription drug, during a specified period of time, in the event the pharmaceutical manufacturer's list price increases; or(d)Based on estimates regarding the quantity of a prescribed drug that will be dispensed by a pharmacy to covered

eriod of time, in the event the pharmaceutical manufacturer's list price increases; or(d)Based on estimates regarding the quantity of a prescribed drug that will be dispensed by a pharmacy to covered individuals;(22)'Spread pricing,' an amount charged or claimed by a pharmacy benefit manager that is in excess of the ingredient cost for a dispensed prescription drug, plus a dispensing fee paid directly or indirectly to a pharmacy, pharmacist, or other provider, on behalf of the third-party payor, less a pharmacy benefit management fee;(23)'Third-party payor,' any entity, other than a covered individual, a covered individual's representative, or a healthcare provider, which is responsible for any amount of reimbursement for a prescription drug benefit, provided the term includes a health carrier and a health benefit plan;(24)'340B drug,' a drug purchased through the 340B drug discount program by a 340B entity;(25)'340B drug discount program,' a program that imposes limitations on the prices of drugs purchased by covered entities, in accordance with 42 U.S.C. §256b (January 1, 2024);(26)'340B entity,' a covered entity as defined in 42 U.S.C.

program that imposes limitations on the prices of drugs purchased by covered entities, in accordance with 42 U.S.C. §256b (January 1, 2024);(26)'340B entity,' a covered entity as defined in 42 U.S.C. §256b(a)(4) (January 1, 2024);(27)'Trade secret,' the same as set forth in §37-29-1;(28)'Unaffiliated pharmacy,' a dispensing pharmacy that is not:(a)Owned, in whole or in part, by a pharmacy benefit manager;(b)A subsidiary of a pharmacy benefit manager; or(c)An affiliate of a pharmacy benefit manager; and(29)'Wholesale distributor,' the same as set forth in §36-11A-25. Source: SL 2004, ch 311, §1; SL 2023, ch 166, §1; SL 2024, ch 203, §2, eff. Jan. 1, 2025.