Pharmacy Benefits Managers [For application of this chapter, see 80 Del. Laws, c. 245, § 2]

Del. Code tit. 18, ch. 33A

in effect

Del. Code tit. 18, § 3301A Pharmacy Audit Integrity Program [For application of this section, see 80 Del. Laws, c. 245, § 2].

The Pharmacy Audit Integrity Program is established to provide standards for an audit of pharmacy records carried out by a pharmacy benefits manager or any entity that represents pharmacy benefits managers.

Del. Code tit. 18, § 3302A Definitions [For application of this section, see 80 Del. Laws, c. 245, § 2; 83 Del. Laws, c. 256, § 15; 85 Del. Laws, c. 481, § 7].

For purposes of this subchapter: (1) “Entity” means a pharmacy benefits manager or any person or organization that represents these companies, groups, or organizations. (2) “Pharmacy benefits manager” or “PBM” means an entity that contracts with pharmacists or pharmacies on behalf of a person to do any of the following: a. Process claims for prescription drugs or medical supplies or provide retail network management for pharmacies or pharmacists. b. Pay pharmacies or pharmacists for prescription drugs or medical supplies. c. Negotiate rebates with manufacturers for drugs paid for or procured as described in this chapter. (3) “Plan sponsor” means as defined under § 4405 of this title. (4) “Recoupment” means a reduction, offset, adjustment, or other act that lowers or lessens the payment of a claim or any other amount owed to a pharmacy or pharmacist for any reason unrelated to that claim or other amount owed to that pharmacy or pharmacist. (5) “Similarly situated contracted pharmacy” includes any contracted pharmacy that has the capability of complying with standard terms and conditions for a pharmacy type, even if the pharmacy does not operate exclusively as that type of pharmacy. (6) “Wholesale invoice audit” means review of supplier invoices to verify accuracy, compliance with contracted rates, and receipt of goods.

Del. Code tit. 18, § 3303A Pharmacy benefit manager contract [For application of this section, see 80 Del. Laws, c. 245, § 2].

An amendment to pharmacy audit terms in a contract between a PBM and a pharmacy must be disclosed to the pharmacy at least 60 days prior to the effective date of the proposed change.

Del. Code tit. 18, § 3304A Procedure and process for conducting and reporting an audit [[For application of this section, see 80 Del. Laws, c. 245, § 2; 83 Del. Laws, c. 256, § 15; 85 Del. Laws, c. 481, § 7

(a) Audit procedures. — Unless otherwise prohibited by federal requirements or regulations, any entity conducting a pharmacy audit must adhere to the following procedures: (1) A pharmacy must be given notice 14 days before an audit is conducted. (2) An audit that involves clinical or professional judgment must be conducted by or in consultation with a licensed pharmacist. (3) Each pharmacy shall be audited under the same standards and parameters as other similarly situated pharmacies. (4) A pharmacy must be given a range of prescription numbers no less than 5 business days before the audit. (5) A pharmacy benefits manager shall provide a pharmacy or pharmacist being audited with a phone number, secured facsimile number, or, if available, access to a secure portal that the pharmacy or pharmacist may use to ask questions regarding the audit. (6) An entity may not initiate an audit of a pharmacy more often than once every 12 months. (b) [Audit process. —] Unless otherwise prohibited by federal requirements or regulations, for any entity conducting a pharmacy audit all of the following audit items apply: (1) The period covered by the audit may not exceed 24 months from the date that the claim was submitted to or adjudicated by the entity, unless a longer period is required under state or federal law. (2) If an entity uses random sampling as a method for selecting a set of claims for examination, the sample size must be appropriate for a statistically reliable sample. The auditing entity shall provide the pharmacy a masked list that provides a prescription number or date range that the auditing entity is seeking to audit no less than 5 business days before an audit. (3) An audit may not take place during the first 5 business days of the month or on a federal holiday unless consented to by the pharmacy. (4) Auditors may not enter the pharmacy area unless escorted where patient-specific information is available and to the extent possible must be out of sight and hearing range of the pharmacy customers. (5) Any recoupment will not be deducted against future remittances until after the appeals process and both parties have received the results of the final audit. (6) A PBM may not require information to be written on a prescription unless the information is required to be written on the prescription by state or federal law. Recoupment may be assessed for items not written on the prescription if the required information is not readily available in print or electronic form for the auditor at the time of the audit and one or more of the following conditions applies: a. Additional information is required in the provider manual. b. The information is required by the Food and Drug Administration (FDA). c. The information is required by the drug manufacturer’s product safety program. (7) The auditing company or agent may not receive payment based on a percentage of the amount recovered. This section does not prevent the entity conducting the audit from charging or assessing the responsible party, directly or indirectly, based on amounts recouped if both of the following conditions are met: a. The plan sponsor and the entity conducting the audit have a contract that explicitly states the percentage charge or assessment to the plan sponsor; and b. A commission to an agent or employee of the entity conducting the audit is not based, directly or indirectly, on amounts recouped. (8) If an entity conducts a wholesale invoice audit, the audit must be limited to verification of purchased inventory specific to the pharmacy claims paid by the plan sponsor or pharmacy benefits manager conducting the audit. Redacted copies of supplier invoices in the pharmacy’s or pharmacist’s possession are acceptable to support the validity of a pharmacy claim. (9) The cost of any audit subject to this subchapter shall be borne by the pharmacy benefits manager conducting the audit. The pharmacy benefits manager may not impose a fee or charge, other than a recoupment or chargeback, or pass costs along related to an audit to the audited pharmacy or pharmacist.

Del. Code tit. 18, § 3305A Requirements for recoupment or chargeback [For application of this section, see 80 Del. Laws, c. 245, § 2].

For recoupment or chargeback, the following criteria apply: (1) Audit parameters must consider consumer-oriented parameters based on manufacturer listings. (2) The reimbursable cost for a compounded medication shall be reflective of the ingredients, supplies and professional time reasonably required to create the finished product. (3) A finding of overpayment or underpayment must be based on the actual overpayment or underpayment and not a projection based on the number of patients served having a similar diagnosis or on the number of similar orders or refills for similar drugs. (4) The entity conducting the audit shall not use extrapolation in calculating the recoupment or penalties for audits unless required by state or federal law or regulations. (5) Calculations of overpayments must not include dispensing fees unless a prescription was not actually dispensed, the prescriber denied authorization, the prescription dispensed was a medication error by the pharmacy, or the identified overpayment is solely based on an extra dispensing fee. (6) An entity may not consider any clerical or record-keeping error, such as a typographical error, scrivener’s error, or computer error regarding a required document or record as fraud, however such errors may be subject to recoupment. (7) In the case of errors that have no actual financial harm to the patient or plan, the PBM must not assess any chargebacks. Errors that are a result of the pharmacy failing to comply with a formal corrective action plan may be subject to recovery. (8) Interest may not accrue during the audit period for either party, beginning with the notice of the audit and ending with the final audit report. (9) Whenever it engages in recoupment or chargeback efforts, a PBM must provide written notice to the pharmacy that identifies the error made in the processing or payment of the claim and justifies the recoupment or chargeback efforts.

Del. Code tit. 18, § 3306A Documentation [For application of this section, see 80 Del. Laws, c. 245, § 2].

(a) To validate the pharmacy record and delivery, the pharmacy may use authentic and verifiable statements or records including medication administration records of a nursing home, assisted living facility, hospital, physician, or other authorized practitioner or additional audit documentation parameters located in the provider manual. (b) Any legal prescription that meets the requirements in this subchapter may be used to validate claims in connection with prescriptions, refills, or changes in prescriptions, including medication administration records, faxes, e-prescriptions, or documented telephone calls from the prescriber or the prescriber’s agents.

Del. Code tit. 18, § 3307A Appeals process [For application of this section, see 80 Del. Laws, c. 245, § 2].

The entity conducting the audit must establish a written appeals process which must include appeals of preliminary reports and final reports.

Del. Code tit. 18, § 3308A Audit information and reports [For application of this section, see 80 Del. Laws, c. 245, § 2].

(a) A preliminary audit report must be delivered to the pharmacy within 30 days after the conclusion of the audit. The preliminary audit report shall contain claim level information for any discrepancy and an estimated recovery amount. (b) A pharmacy must be allowed at least 45 days following receipt of the preliminary audit to provide documentation to address any discrepancy found in the audit. (c) A final audit report must be delivered to the pharmacy within 120 days after receipt of the preliminary audit report or final appeal, whichever is later. (d) An entity shall remit any money due to a pharmacy or pharmacist as a result of an underpayment of a claim within 45 days after the appeals process has been exhausted and the final audit report has been issued.

Del. Code tit. 18, § 3309A Disclosures to plan sponsor [For application of this section, see 80 Del. Laws, c. 245, § 2; 83 Del. Laws, c. 256, § 15; 85 Del. Laws, c. 481, § 7].

Where contractually required, an auditing entity must provide a copy to the plan sponsor of all claims that were included in the audit, and any recouped money shall be returned to the plan sponsor.

Del. Code tit. 18, § 3310A Applicability of other laws and regulations [For application of this section, see 80 Del. Laws, c. 245, § 2; 83 Del. Laws, c. 256, § 15; 85 Del. Laws, c. 481, § 7]

The provisions of this subchapter do not apply to an investigative audit of pharmacy records when any of the following apply: (1) Fraud, waste, abuse, or intentional misconduct is indicated by physical review or review of claims data or statements. (2) Other investigative methods indicate a pharmacy is or has been engaged in criminal wrongdoing, fraud, or other intentional or wilful misrepresentation. (3) The audit is being conducted by the State.

Del. Code tit. 18, § 3321A Definitions [For application of this section, see 80 Del. Laws, c. 245, § 2; 85 Del. Laws, c. 481, § 7]

For purposes of this subchapter: (1) “Claim” means a request from a pharmacy or pharmacist to be reimbursed for the cost of filling or refilling a prescription for a drug or for providing a medical supply or device. (2) “Contracted pharmacy” means a pharmacy that participates in the network of a pharmacy benefits manager through a contract with a pharmacy benefits manager, a pharmacy services administration organization, or a group purchasing organization. (3) “Drug shortage list” means a list of drug products listed on the federal Food and Drug Administration’s Drug Shortages website. (4) “Insurer” means any entity that provides health insurance coverage in this State as defined in § 903 of this title. (5) “Maximum allowable cost” means the maximum amount that a pharmacy benefits manager will reimburse a pharmacist or pharmacy for the cost of a multi-sourced drug, medical product, or device. (6) “Maximum allowable cost list” means the multi-source generic drugs, medical products, and devices for which a maximum allowable cost has been established by a pharmacy benefits manager or a purchaser. (7) “Net amount” means the dollar amount that is the result of the invoice price that the pharmacy paid to the supplier for the prescription drug modified as follows, as are attributable to the drug: a. Increased by the dollar amount of all taxes, fees, and other costs. b. Decreased by the dollar amount of all discounts and other cost reductions. ((8)) “Network providers” means those pharmacists and pharmacies who provide covered health-care services or supplies to an insured or a member pursuant to a contract with an insurer or pharmacy benefits manager. (9) “Pharmacist” means as defined under § 2502 of Title 24. (10) “Pharmacy” means as defined under § 2502 of Title 24. (11) “Pharmacy benefits management services” means as defined under § 3351A of this title. (12) “Pharmacy benefits manager” means as defined under § 3302A of this title. (13) “Purchaser” means as defined under § 3351A of this title. (14) “Similarly situated contracted pharmacy” means as defined in § 3302A of this title.

Del. Code tit. 18, § 3322A Exclusions [For application of this section, see 80 Del. Laws, c. 245, § 2].

This subchapter does not apply to the Department of Health and Human Services in the performance of its duties in administering fee-for-service Medicaid under Titles XIX and XXI of the Social Security Act [42 U.S.C. §§ 1396 et seq., 1397aa et seq.].

Del. Code tit. 18, § 3323A Requirements for maximum allowable cost pricing [For application of this section, see 80 Del. Laws, c. 245, § 2; and 83 Del. Laws, c. 256, § 15].

(a) To place a drug on a maximum allowable cost list, a pharmacy benefits manager must ensure that the drug meets all of the following requirements: (1) It is listed as “A” or “B” rated in the most recent version of the United States Food and Drug Administration’s Approved Drug Products with Therapeutic Equivalence Evaluations, also known as the Orange Book, or has an “NR” or “NA” rating or a similar rating by a nationally recognized reference. (2) It is generally available for purchase by pharmacies in this State from national or regional wholesalers. (3) It is not obsolete, temporarily unavailable, or listed on a drug shortage list as in shortage. (4) If it is manufactured by more than 1 manufacturer, the drug is available for purchase by a contracted pharmacy, including a contracted retail pharmacy, in this State from a wholesale distributor with a permit in this State, with whom the pharmacy has an existing relationship. (5) If it is manufactured by only 1 manufacturer, the drug is generally available for purchase by a contracted pharmacy, including a contracted retail pharmacy, in this State from at least 2 wholesale distributors with a permit in this State. (b) A pharmacy benefits manager engaging in maximum allowable cost pricing must do all of the following: (1) Make available to each network provider at the beginning of the term of the network provider’s contract, and upon renewal of the contract, the sources utilized to determine the maximum allowable cost pricing. (2) Provide a process for a network pharmacy provider to readily access the most recent maximum allowable cost specific to that provider in an electronic format as updated in accordance with the requirements of this section. (3) Review and update maximum allowable cost price information at least once every 7 business days and update the information when there is a modification of maximum allowable cost pricing. (4) Ensure that dispensing fees are not included in the calculation of maximum allowable cost. (5) On the next day after a pricing information update under paragraph (b)(3) of this section, use the updated pricing information in calculating the payments made to all contracted pharmacies. (6) Maintain a procedure to eliminate products from the maximum allowable cost list as necessary to do all of the following: a. Remain consistent with price changes. b. Remove from the maximum allowable cost list a drug that no longer meets the requirements of subsection (a) of this section. c. Reflect the most recent availability of drugs in the marketplace.

Del. Code tit. 18, § 3324A Appeals [For application of this section, see 80 Del. Laws, c. 245, § 2; 83 Del. Laws, c. 256, § 15; 85 Del. Laws, c. 481, § 7].

(a) (1) a. A pharmacy benefits manager must establish a process by which a contracted pharmacy can appeal the amount of the provider’s reimbursement for a drug that was reimbursed by the pharmacy benefits manager. b. A contracted pharmacy’s representative may take actions and receive notices under this section on behalf of the contracted pharmacy. (2) A contracted pharmacy has 40 calendar days after the applicable fill date to appeal a reimbursement if the reimbursement for the drug is less than any of the following: a. The net amount that the network provider paid to the supplier of the drug. b. The reimbursement amount required under § 3372A(7) of this title. (3) A pharmacy benefits manager must respond with notice that the appeal has been denied or granted within 10 calendar days of the contracted pharmacy making the claim for which an appeal has been submitted. (b) At the beginning of the term of a network provider’s contract, and upon renewal, a pharmacy benefits manager must provide to network providers a telephone number and e-mail address at which a network provider can contact the pharmacy benefits manager to process an appeal under this section. (c) (1) If an appeal is denied, the pharmacy benefits manager must provide a detailed reason for the denial. If the appeal is related to a maximum allowable cost reimbursement, the pharmacy benefits manager must also provide the name and national drug code number of the national or regional wholesalers operating in this State that have the drug in stock at a price below the maximum allowable cost at the time the pharmacy or pharmacist purchased the drug. (2) At the time the pharmacy benefits manager provides the written notice of a final appeal determination under paragraph (c)(1) of this section, the pharmacy benefits manager shall provide notice to the pharmacy of the right to appeal an adverse determination to the Department. (3) The notice under paragraph (c)(2) of this section may be separate from or a part of the written notice of the final determination under paragraph (c)(1) of this section and must, at a minimum, contain all of the following: a. A statement that says “You have the right to appeal the final appeal determination through the Delaware Department of Insurance. All appeals must be filed with the Department within 10 calendar days from the date you receive the pharmacy benefits manager’s final determination.” b. The Department website the pharmacy can use to file an appeal. (d) If the appeal is granted the pharmacy benefits manger shall do the following: (1) a. Adjust the reimbursement for the drug as of the date of the original claim for payment. b. Without requiring the appealing pharmacy to reverse and rebill the claims, provide reimbursement for the claim and any subsequent and similar claims under similarly applicable contracts with the pharmacy benefits manager as follows: 1. For the original claim, in the first remittance to the pharmacy after the date the appeal was granted. 2. For subsequent and similar claims under similarly applicable contracts, in the second remittance to the pharmacy after the date the appeal was granted. (2) For a similarly situated contracted pharmacy in this State, do all of the following: a. Adjust the maximum allowable cost for the drug as of the date the appeal was granted. b. Provide notice to the pharmacy or the pharmacy’s contracted agent of all of the following: 1. That an appeal was granted. 2. That without filing a separate appeal, the pharmacy or the pharmacy’s contracted agent may reverse and rebill a similar claim. (e) A pharmacy benefits manager shall provide information on its website about the appeal process, including all of the following: (1) A telephone number at which the contracted pharmacy may contact the department or office responsible for processing appeals for the pharmacy benefits manager to speak to an individual specifically or leave a message for an individual or office who is responsible for processing appeals. (2) An email address of the department or office responsible for processing appeals to which an individual who responsible for processing appeals has access. (3) The information required under paragraph (c)(3) of this section. (f) A pharmacy benefits manager may not charge a contracted pharmacy a fee related to the re-adjudication of a claim resulting from a granted appeal under subsection (d) of this section or the granting of an appeal under subsection (h) of this section. (g) A pharmacy benefits manager may not retaliate against a contracted pharmacy for exercising its right to appeal to the pharmacy benefits manager under subsection (a) of this section or to the Commissioner under subsection (h) of this section. (h) (1) If a pharmacy benefits manager denies an appeal and a contracted pharmacy files an appeal with the Commissioner, the Commissioner shall do all of the following: a. Review the pharmacy benefits manager’s compensation program to ensure that the reimbursement for pharmacy benefits management services paid to the pharmacist or a pharmacy complies with the reimbursement requirements under § 3372A(7) of this title. b. Based on a determination made by the Commissioner under paragraph (h)(1)a. of this section, do 1 of the following: 1. Deny the appeal. 2. Grant the appeal and order the pharmacy benefits manager to pay the claim in accordance with the Commissioner’s findings. (2) All pricing information and data collected by the Commissioner during a review required by paragraph (h)(1) of this section is confidential and not subject to subpoena or the Freedom of Information Act, Chapter 100 of Title 29. (3) The non-prevailing party shall pay the costs incurred by the Department in processing an appeal under this subsection. (4) On request, parties shall provide the Commissioner all mathematical calculations, accounts, records, documents, files, logs, correspondence, or other information necessary to complete the Commissioner’s review of an appeal under this subsection.

Del. Code tit. 18, § 3325A Reimbursement for and provision of pharmacy goods or services For application of this section, see 83 Del. Laws, c. 256, § 15].

(a) For purposes of this section: (1) “Affiliate” means a pharmacy or pharmacist that directly or indirectly, through 1 or more intermediaries, owns or controls, is owned or controlled by, or is under common ownership or control with, a pharmacy benefits manager. (2) “Pharmaceutical wholesaler” means a person that sells and distributes a pharmaceutical product and offers regular and private delivery to a pharmacy. (3) “Pharmacy acquisition cost” means the amount that a pharmaceutical wholesaler charges for a pharmaceutical product as listed on the pharmacy’s billing invoice. (4) “Pharmacy goods or services” means 1 or more of the following provided by a pharmacist or pharmacy: a. A single-sourced drug, multi-sourced drug, or compounded drug. b. A medical product. c. A medical device. d. A service. (b) A pharmacy benefits manager may not reimburse a pharmacist or pharmacy for pharmacy goods or services in an amount less than the amount the pharmacy benefits manager reimburses itself or an affiliate for the same pharmacy goods or services. (c) If the amount reimbursed by a pharmacy benefits manager for pharmacy goods or services is less than the pharmacy acquisition cost for the same pharmacy goods or services, a pharmacist or pharmacy may decline to provide the pharmacy goods or services to a patient. (d) A pharmacist or pharmacy acting under subsection (c) of this section shall do all of the following: (1) Inform the patient that the pharmacist or pharmacy has made the decision not to provide pharmacy goods or services to the patient under subsection (c) of this section because of the costs associated with providing the pharmacy goods or services. (2) Provide the patient with a list of pharmacies in the area that may provide the pharmacy goods or services.

Del. Code tit. 18, § 3331A Definitions For application of this section, see 80 Del. Laws, c. 245, § 2; 83 Del. Laws, c. 256, § 15; 85 Del. Laws, c. 481, § 7]

For purposes of this subchapter: (1) “Pharmacist” means as defined in § 2502 of Title 24. (2) “Pharmacy” means as defined in § 2502 of Title 24. (3) “Pharmacy benefits manager” means as defined in § 3302A of this title. (4) “Substitute” means as defined in § 2502 of Title 24.

Del. Code tit. 18, § 3332A Permitted disclosures related to prescription drugs [For application of this section, see 81 Del. Laws, c. 378, § 2; and 81 Del. Laws, c. 256, § 15].

A contract between a pharmacy benefits manager and a pharmacy may not prohibit a pharmacy or pharmacist from doing any of the following: (1) Providing a patient with information regarding the retail price of a prescription drug or the amount of the cost share for which the patient is responsible for a prescription drug. (2) Discussing with a patient information regarding the retail price of a prescription drug or the amount of the cost share for which the patient is responsible for a prescription drug. (3) If a more affordable substitute is available, selling the more affordable substitute to the patient.

Del. Code tit. 18, § 3333A Prohibited retaliation due to permitted disclosures.

(a) A pharmacy benefits manager may not retaliate against a pharmacist or pharmacy for disclosing information in any proceeding if the pharmacist or pharmacy has reasonable cause to believe that the disclosed information is evidence of a violation of a state or federal law, rule, or regulation. Proceedings under this subsection include information disclosed as follows: (1) To a court. (2) During an administrative investigation or hearing. (3) To a legislative commission or committee. (b) A pharmacy benefits manager may not retaliate against a pharmacist or pharmacy for disclosing information to a government, regulatory, or law-enforcement agency, if the pharmacist or pharmacy has reasonable cause to believe that the disclosed information is evidence of a violation of a state or federal law, rule, or regulation. (c) A pharmacist or pharmacy shall, to the extent possible, limit the disclosure of confidential and proprietary information when making a disclosure under subsection (a) or (b) of this section. (d) Retaliatory actions against a pharmacist or pharmacy include the cancellation or restriction of, the refusal to renew, or the refusal to offer a contract solely because the pharmacy or pharmacist has done 1 or more of the following: (1) Disclosed information under subsection (a) or (b) of this section. (2) Filed complaints with a pharmacy benefits manager. (3) Filed complaints against an insurer or pharmacy benefits manager with the Department. (4) Filed an appeal with the Commissioner under § 3324A(h) of this title. (e) If a contract entered into, amended, extended, or renewed after December 31, 2026, includes a provision that prohibits a disclosure permitted under this section, that provision is against public policy and is void and unenforceable.

Del. Code tit. 18, § 3335A Definitions.[For application of this section, see 80 Del. Laws, c. 245, § 2; 83 Del. Laws, c. 256, § 15; 85 Del. Laws, c. 481, § 7]

(1) “Chronic or long-term condition” means any of the following: a. A “complex or chronic medical condition” as defined in § 3364(a) of this title. b. A “rare medical condition” as defined in § 3364(a) of this title. (2) “Emergency medical condition” means as defined in § 3349(e) of this title. (3) “Pharmacy benefits manager” means as defined in § 3302A of this title. (4) “Prior authorization” means a requirement by a carrier or health-insurance plan that providers submit a request or other prior notification to the carrier for evaluation of appropriateness of the request or if the prescription is medically necessary before treatment is rendered. Prior authorization lets the insured and provider know in advance which pharmaceuticals are considered by the insurer to be medically necessary.

Del. Code tit. 18, § 3336A Prior authorization of emergency prescriptions [For application of this section, see 85 Del. Laws, c 481, § 7].

A pharmacy benefits manager may not require prior authorization for coverage of a 72-hour supply of medication that is for a noncontrolled substance prescribed for an emergency medical condition.

Del. Code tit. 18, § 3337A Prior authorization of prescriptions for chronic or long-term conditions [For application of this section, see 85 Del. Laws, c. 481, § 7].

(a) A prior authorization form for a prescription medication must include a question regarding whether the prescription medication is for a chronic or long-term condition for which the prescription medication may be necessary for the life of the patient. (b) If a prescriber indicates on a prior authorization form that the prescription medication is for a chronic or long-term condition for which the prescription medication may be necessary for the life of the patient, the pharmacy benefits manager may not request a reauthorization for the same prescription medication more frequently than every 12 months. (c) In the same communication in which a pharmacy benefits manager or the pharmacy benefits manager’s agent requests a prior authorization for a prescription medication that has therapeutically equivalent medications that do not require a prior authorization from a prescriber, the pharmacy benefits manager or the pharmacy benefits manager’s agent shall provide the prescriber with a list of alternative prescription medications of the same class and family as the requested medication. (d) Prescribers that utilize e-prescribing shall receive alternate medications from the pharmacy benefits manager for prescription medications that do not require a prior authorization before the completion of the e-prescribing transaction. (e) A pharmacy benefits manager or the pharmacy benefit manager’s agent shall provide alternative medications for therapeutically equivalent medications to the pharmacy that require prior authorization on the National Council for Prescription Drug Programs response transaction to a denied claim for prior authorization.

Del. Code tit. 18, § 3351A Definitions [For application of this section, see 83 Del. Laws, c. 256, § 15].

For purposes of this subchapter: (1) “Pharmacy benefits management services” means all of the following: a. The procurement of prescription drugs at a negotiated rate for dispensation within this State to beneficiaries. b. The administration or management of prescription drug coverage provided by a purchaser for beneficiaries. c. Any of the following services provided with regard to the administration of prescription drug coverage: 1. Mail service pharmacy. 2. Claims processing, retail network management, and payment of claims to pharmacies for prescription drugs dispensed to beneficiaries. 3. Clinical formulary development and management services. 4. Rebate contracting and administration. For purposes of this paragraph (1)c.4., “rebate” means as defined in § 3361A of this title. 5. Patient compliance, therapeutic intervention, and generic substitution programs. 6. Disease management programs. (2) “Pharmacy benefits manager” means as defined under § 3302A of this title. (3) “Purchaser” means a person that does all of the following: a. Provides prescription drug coverage or benefits in this State. b. Enters into agreement with a pharmacy benefits manager for the provision of pharmacy benefits management services.

Del. Code tit. 18, § 3352A Applicability.

This subchapter does not apply to plans of health insurance or health benefits designed for issuance to persons eligible for coverage under Titles XVIII, XIX, and XXI of the Social Security Act, 42 U.S.C. §§ 1395 et seq., 1396 et seq., and 1397aa et seq., known as Medicare, Medicaid, or any other similar coverage under a state or federal government plan.

Del. Code tit. 18, § 3353A Registration required [For application of this section, see 83 Del. Laws, c. 256, § 15].

(a) A pharmacy benefits manager shall register with the Commissioner as a pharmacy benefits manager before providing pharmacy benefits management services in this State to a purchaser. (b) A purchaser may not enter into an agreement or contract with a pharmacy benefits manager that has not registered with the Commissioner. (c) A pharmacy benefits manager applying for registration shall do all of the following: (1) File with the Commissioner an application on the form that the Commissioner provides. (2) Pay to the Commissioner a $1,000 nonrefundable registration fee. (d) The Commissioner may require any additional information or submissions from a pharmacy benefits manager that may be reasonably necessary to verify the information contained in the application. (e) Subject to § 3355A of this title, the Commissioner shall register each pharmacy benefits manager that meets the requirements of this section. (f) Except where prohibited by state or federal law, a pharmacy benefits manager applying for registration is deemed to have appointed the Commissioner as agent for service of process in an action or proceeding arising in this State out of or in connection with the exercise of the registration. The appointment of the Commissioner as agent for service of process is irrevocable during the period within which a cause of action against the pharmacy benefits manager may arise out of transactions with respect to pharmacy benefits management services provided in this State. The process must be served on the Commissioner or a Deputy Insurance Commissioner or another person designated by the Commissioner by rule or regulation.

Del. Code tit. 18, § 3354A Expiration and renewal of registration [For application of this section, see 83 Del. Laws, c. 256. § 15].

(a) A pharmacy benefits manager registration expires on May 1 after its effective date unless it is renewed as provided under this section. (b) A pharmacy benefits manager may renew its registration for an additional 1-year term if the pharmacy benefits manager otherwise is entitled to be registered and does all of the following: (1) Files with the Commissioner a registration renewal application on the form that the Commissioner requires. (2) Pays to the Commissioner a $1,000 nonrefundable renewal fee. (c) An application for renewal of a pharmacy benefits manager registration is to be considered made in a timely manner if it is postmarked on or before the date the pharmacy benefits manager’s registration expires. (d) The Commissioner may require additional information or submissions from a pharmacy benefits manager that may be reasonably necessary to verify the information contained in the registration renewal application. (e) Subject to §§ 3355A of this title, the Commissioner shall renew the registration of each pharmacy benefits manager that meets the requirements of this section.

Del. Code tit. 18, § 3355A Denial, suspension, or revocation of registration [For application of this section, see 83 Del. Laws, c. 256, § 15].

(a) The Commissioner may deny a registration to a pharmacy benefits manager applicant or refuse to renew, suspend, or revoke the registration of, or issue a cease and desist order to, a pharmacy benefits manager if the pharmacy benefits manager, or an officer, director, or employee of the pharmacy benefits manager, does any of the following: (1) Makes a material misstatement, misrepresentation, or omission in a registration or registration renewal application. (2) Fraudulently or deceptively obtains or attempts to obtain a registration or renewal of a registration. (3) In connection with the administration of pharmacy benefits management services, commits fraud or engages in illegal or dishonest activities. (4) Violates any provision of this chapter or a regulation adopted under this chapter. (b) [Repealed.] (c) If the action by the Commissioner is to deny or not renew a registration, the Commissioner shall notify the pharmacy benefits manager of the decision, in writing, including the reason for the denial or nonrenewal of the registration. The pharmacy benefits manager may, within 10 days after the Commissioner provides notice under this subsection, make written demand on the Commissioner for a hearing before the Commissioner to determine the reasonableness of the Commissioner’s action. A hearing under this subsection must be held under §§ 323 through 328 of this title. (d) This section does not limit any other regulatory authority of the Commissioner under this title.

Del. Code tit. 18, § 3356A Recordkeeping requirements.

A pharmacy benefits manager shall maintain adequate books and records about each purchaser for which the pharmacy benefits manager provides pharmacy benefits management services as follows: (1) In accordance with prudent standards of record keeping. (2) For the duration of the agreement between the pharmacy benefits manager and the purchaser. (3) For 3 years after the pharmacy benefits manager ceases to provide pharmacy benefits management services for the purchaser.

Del. Code tit. 18, § 3357A Examination of affairs, transactions, accounts, and records.

(a) Whenever the Commissioner considers it advisable, the Commissioner may examine the affairs, transactions, accounts, and records of a registered pharmacy benefits manager. (b) The examination must be conducted under § 320 of this title. (c) The expense of an examination is to be borne by the pharmacy benefits manager being examined. The expense includes the reasonable and proper expenses of the Commissioner, and the Commissioner’s examiners and assistants, including expert assistance, and a reasonable per diem as to the examiners and assistants as necessarily incurred in the examination. The pharmacy benefits manager examined shall promptly pay the examination expense on presentation by the Commissioner or the Commissioner’s examiner of a reasonably detailed written account of the examination expense. (d) The Commissioner shall issue reports of the examination and investigation under § 321 of this title.

Del. Code tit. 18, § 3358A Permit required for nonresident pharmacy to deliver prescription drugs or devices.

A pharmacy benefits manager may not ship, mail, or deliver prescription drugs or devices to a person in this State through a nonresident pharmacy unless the nonresident pharmacy holds a permit issued under § 2535 of Title 24.

Del. Code tit. 18, § 3359A Penalties and enforcement [Transferred].

82 Del. Laws, c. 115, § 4Transferred to § 3373A of this title by 83 Del. Laws, c. 256, § 14, effective Oct. 26, 2021.

Del. Code tit. 18, § 3361A Definitions [For application of this section, see 83 Del. Laws, c. 256, § 15].

For purposes of this subchapter: (1) “Claim” means as defined under § 3321A of this title. (2) “Insured” means an individual covered by health insurance offered by an insurer. (3) “Insurer” means as defined under § 3321A of this title. (4) “Pharmacist” means as defined under § 2502 of Title 24. (5) “Pharmacy” means as defined under § 2502 of Title 24. (6) “Pharmacy benefits manager” means as defined under § 3302A of this title. (7) “Pharmacy benefits manager network” means a network of pharmacists or pharmacies that are offered by an agreement or contract to provide pharmacy goods or services. (8) “Pharmacy goods or services” means as defined under § 3325A of this title. (9) a. “Rebate” means a discount or other price concession, or a payment that is both of the following: 1. Based on utilization of a prescription drug. 2. Paid by a manufacturer or third party, directly or indirectly, to the pharmacy benefits manager, pharmacy services administrative organization, or pharmacy after a claim has been processed and paid at a pharmacy. b. “Rebate” includes incentives, disbursements, and reasonable estimates of a volume-based or category-based discount.

Del. Code tit. 18, § 3362A Pharmacy benefits manager network [For application of this section, see 83 Del. Laws, c. 256, § 15].

(a) A pharmacy benefits manager shall provide a reasonably adequate and accessible pharmacy benefits manager network for the provision of prescription drugs, which provides for convenient patient access to pharmacies within a reasonable distance from a patient’s residence. (b) A pharmacy benefits manager may not deny a pharmacy the opportunity to participate in a pharmacy benefits manager network at preferred participation status if the pharmacy is willing to accept the terms and conditions that the pharmacy benefits manager has established for other pharmacies as a condition of preferred network participation status. (c) A mail-order pharmacy may not be included in the calculations for determining pharmacy benefits manager network adequacy under this section.

Del. Code tit. 18, § 3363A Reports [For application of this section, see 83 Del. Laws, c. 256, § 15; 85 Del. Laws, c. 481, § 7].

(a) A pharmacy benefits manager shall provide a pharmacy benefits manager network adequacy report describing the pharmacy benefits manager network and the pharmacy benefits manager network’s accessibility in this State. The Commissioner shall adopt regulations setting the time and manner for providing the report. (b) A pharmacy benefits manager shall report all of the following information to the Commissioner for each insurer: (1) On an annual basis, no later than March 31, all of the following: a. The itemized amount of pharmacy benefits manager revenue sources, including professional fees, administrative fees, processing fees, audits, direct and indirect renumeration fees, or any other fees. b. The individual and aggregate amount the insurer paid to the pharmacy benefits manager for pharmacy goods or services provided in this State, itemized by all of the following: 1. Pharmacy. 2. Product. 3. Goods and services. c. The individual and aggregate amount a pharmacy benefits manager paid for pharmacy goods or services provided in this State, itemized by all of the following: 1. Pharmacy. 2. Product. 3. Goods and services. (2)-(5) [Repealed.] (6) On an annual basis, all of the following: a. The aggregate amount of the rebates distributed to the appropriate insurer. b. The aggregate amount of the rebates passed on to insureds of each insurer at the point of sale that reduced the insureds’ applicable deductible, copayment, coinsurance, or other cost-sharing amount. (c) The information provided under this section is confidential and not subject to subpoena or the Freedom of Information Act, Chapter 100 of Title 29.

Del. Code tit. 18, § 3371A Definitions [For application of this section, see 83 Del. Laws, c. 256, § 15].

For purposes of this subchapter: (1) “Board of Pharmacy” means the Delaware Board of Pharmacy. (2) “Claim” means as defined under § 3321A of this title. (3) “Insurer” means as defined under § 3321A of this title. (4) “Pharmacist” means as defined under § 2502 of Title 24. (5) “Pharmacy” means as defined under § 2502 of Title 24. (6) “Pharmacy benefits manager” means as defined under § 3302A of this title. (7) “Pharmacy benefits manager network” means a network of pharmacists or pharmacies that are offered by an agreement or contract to provide pharmacy goods or services. (8) “Pharmacy goods or services” means as defined under § 3325A of this title. (9) “Spread pricing” means the model of prescription drug pricing in which the pharmacy benefits manager charges a health benefit plan a contracted price for prescription drugs, and the contracted price for the prescription drugs differs from the amount the pharmacy benefits manager directly or indirectly pays the pharmacist or pharmacy for pharmacy goods or services.

Del. Code tit. 18, § 3372A Prohibited practices [For application of this section, see 83 Del. Laws, c. 256, § 15].

A pharmacy benefits manager or representative of a pharmacy benefits manager may not do any of the following: (1) Engage in spread pricing. (2) Cause or knowingly permit the use of any advertisement, promotion, solicitation, representation, proposal, or offer that is untrue, deceptive, or misleading. (3) Unless reviewed and approved by the Commissioner, charge a pharmacist or pharmacy a fee related to the adjudication of a claim, including a fee for any of the following: a. The receipt and processing of a pharmacy claim. b. The development or management of claims processing services in a pharmacy benefits manager network. c. Participation in a pharmacy benefits manager network. (4) Unless reviewed and approved by the Commissioner in coordination with the Board of Pharmacy, require pharmacy accreditation standards or certification requirements inconsistent with, more stringent than, or in addition to requirements of the Board of Pharmacy. (5) Violate § 3325A(b) of this title. (6) Violate § 3362A of this title. (7) Pay or reimburse a pharmacy or pharmacist for the ingredient drug product component of pharmacist services less than the national average drug acquisition cost that was in effect on the date of service. If the national average drug acquisition cost is unavailable, the wholesale acquisition cost should be applied. The wholesale acquisition cost price must be the price published in effect on the date of service for the drug claim. (8) Make or permit any reduction of payment for pharmacy goods or services by a pharmacy benefits manager or an insurer directly or indirectly to a pharmacy under a reconciliation process to an effective rate of reimbursement, including generic effective rates, brand effective rates, direct and indirect remuneration fees, or any other reduction or aggregate reduction of payment. (9) After adjudication of a claim for pharmacy goods or services, directly or indirectly retroactively deny or reduce the claim unless 1 or more of the following applies: a. The original claim was intentionally submitted fraudulently. b. The original claim payment was incorrect because the pharmacy or pharmacist had already been paid for the pharmacy goods or services. c. The pharmacy goods or services were not properly rendered by the pharmacy or pharmacist. (10) Amend a contract between a pharmacy benefits manager and a pharmacy or pharmacist without providing at least 60 days’ notice to the affected pharmacy or pharmacist. (11) Require pharmacists to break open unit-of-use items beyond manufacturer recommendations if the only commercially available package size exceeds the minimum days’ supply. Packaging labeled “for single-patient-use only” shall be deemed to be the smallest package size available. (12) Require a pharmacy to dispense a therapeutically equivalent or therapeutically alternative drug that costs the enrollee more out-of-pocket than the prescribed drug, unless the substitution is made for medical reasons that benefit the enrollee. (13) Transfer or share prescription information containing enrollee-identifiable or prescriber-identifiable data to an affiliated pharmacy for any commercial purpose other than the purposes of facilitating pharmacy reimbursement, formulary compliance, or utilization review.

Del. Code tit. 18, § 3373A Penalties and enforcement [For application of this section, see 83 Del. Laws, c. 256, § 15].

(a) If the Commissioner determines that a pharmacy benefits manager has violated any provision of this chapter or any regulation adopted under this chapter, the Commissioner may, after notice and a hearing, issue an order that requires the pharmacy benefits manager to do 1 or more of the following: (1) Cease and desist from the identified violation and further similar violations. (2) Take specific affirmative action to correct the violation. (3) Make restitution of money, property, or other assets to a person that has suffered financial injury because of the violation. (4) Pay a fine in an amount determined by the Commissioner, not to exceed $10,000, for each violation of this chapter. (5) Pay the costs, including applicable attorneys’ fees, incurred by the Commissioner in bringing the action. (b) A hearing under this section must be held under §§ 323 through 328 of this title and any regulations adopted by the Commissioner. (c) The Commissioner may adopt regulations to enforce this chapter and to establish a complaint process and set associated fees to address grievances and appeals brought under this chapter.

Del. Code tit. 18, § 3374A Prohibition of discrimination against 340B entities by pharmacy benefits managers.

(a) For purposes of this section: (1) “340B drug” means a drug that is a covered outpatient drug under 42 U.S.C. § 256b. (2) “340B drug program” means the federal drug pricing program under 42 U.S.C. § 256b that limits prices on drugs purchased by covered entities. (3) “Claim” means a request from a covered entity or the covered entity’s contracted pharmacy to be reimbursed for the cost of filling or refilling a prescription for a drug or for providing a medical supply or device. (4) “Covered entity” means as defined in 42 U.S.C. § 256b(a)(4). (5) “Pharmacy benefits manager” means as defined in § 3302A of this title. (6) “Purchaser” means as defined in § 3351A of this title. (b) A pharmacy benefits manager or purchaser may not discriminate, either directly or indirectly, against a covered entity or the covered entity’s contracted pharmacy on the basis of its participation in the 340B program, including by doing any of the following: (1) Providing a reimbursement rate for a 340B drug that is less than the national average drug acquisition cost rate for that drug as determined by the United States Centers for Medicare and Medicaid Services, measured at the time the drug is administered or dispensed, or if no such rate is available at that time, a reimbursement rate that is less than the wholesale acquisition cost of the drug, as contemplated under § 3372A of this title. (2) Imposing a term or condition that differs from terms or conditions imposed on an entity that is not a covered entity or the covered entity’s contracted pharmacy, including any of the following: a. Imposing a fee, chargeback, clawback, or other adjustment to the covered entity or the covered entity’s contracted pharmacy that is not imposed on or exceeds the amount imposed on an entity that is not a covered entity or the covered entity’s contracted pharmacy. b. Restricting or requiring participation in a pharmacy network. c. Requiring more frequent auditing or a broader scope of audit for inventory management systems using generally accepted accounting principles, unless such audit is required under state or federal law. d. Requiring a covered entity or the covered entity’s contracted pharmacy to reverse, resubmit, identify, modify, or clarify a claim after the initial adjudication, unless these actions are the normal course of pharmacy business and not related to the 340B program or required under applicable state or federal law. e. Requiring accreditation or recertification inconsistent with, more stringent than, or in addition to state or federal law. f. Discriminating against a 340B entity or the entity’s contracted pharmacy in a manner that prevents or interferes with an individual’s choice to receive a prescription drug from a 340B covered entity or the covered entity’s contracted pharmacy, including the administration of the drug. g. Imposing any provision determined by the Insurance Commissioner to interfere with the ability of a covered entity or the covered entity’s contracted pharmacy to maximize the value of discounts provided under the 340B program. (c) A violation of subsection (b) of this section by any person constitutes an unfair practice in the insurance business under Chapter 23 of this title. (d) Any contract that is entered into, amended, extended, or renewed after September 19, 2024 that includes a provision that violates subsection (b) of this section is against public policy and is void and unenforceable.

Del. Code tit. 18, § 3381A Definitions [For application of this subchapter, see 83 Del. Laws, c. 522, § 4].

For purposes of this subchapter: (1) “Cost-sharing requirement” means any copayment, coinsurance, deductible, or annual limitation on cost-sharing (including a limitation subject to 42 U.S.C. §§ 18022(c) and 300gg-6(b)), required by or on behalf of an enrollee in order to receive a specific health care service, including a prescription drug, covered by a health benefit plan. (2) “Enrollee” means any individual entitled to health care services from an insurer. (3) “Health benefit plan” means a policy, contract, certification, or agreement offered or issued by an insurer to provide, deliver, arrange for, pay for, or reimburse any of the costs of health care services. (4) “Health care service” means a policy, contract, certification, or agreement offered or issued by an insurer to provide, deliver, arrange for, pay for, or reimburse any of the costs of health care services. (5) “Insurer” means as defined under § 3321A of this title. (6) “Person” means a natural person, corporation, mutual company, unincorporated association, partnership, joint venture, limited liability company, trust, estate, foundation, not-for-profit corporation, unincorporated organization, government or governmental subdivision or agency. (7) “Pharmacy benefits manager” means as defined under § 3302A of this title, and shall include any person, business, or other entity that, pursuant to a contract or under an employment relationship with an insurer, either directly or through an intermediary, manages the prescription drug benefit provided by the insurer, including the processing and payment of claims for prescription drugs, the performance of drug utilization review, the processing of drug prior authorization requests, the adjudication of appeals or grievances related to the prescription drug benefit, contracting with network pharmacies, and/or controlling the cost of covered prescription drugs.

Del. Code tit. 18, § 3382A Fairness in cost-sharing [For application of this subchapter, see 83 Del. Laws, c. 522, § 4].

(a) Cost-sharing calculation. — When calculating an enrollee’s contribution to any applicable cost-sharing requirement, a pharmacy benefits manager shall include any cost-sharing amounts paid by the enrollee or on behalf of the enrollee by another person. If under federal law, application of this requirement would result in health savings account ineligibility under § 223 of the federal Internal Revenue Code [26 U.S.C. § 223], this requirement shall apply for health savings account-qualified high deductible health plans with respect to the deductible of such a plan after the enrollee has satisfied the minimum deductible under [26 U.S.C.] § 223, except with respect to items or services that are preventive care pursuant to [26 U.S.C.] § 223(c)(2)(C) of the federal Internal Revenue Code, in which case the requirements of this subsection shall apply regardless of whether the minimum deductible under [26 U.S.C.] § 223 has been satisfied. (b) Rule-making. — The Insurance Commissioner may promulgate rules and regulations as may be necessary or appropriate to implement and administer this section.

Source: DE Code (Official Site)URL: https://delcode.delaware.gov/title18/c033a/sc01/index.htmlFetched: 10/4/2026