Knox-Keene Act Pharmacy Benefit Managers and Drug Formularies

California Health and Safety Code §§1340-1399.818 and Title 28 of the California Code of Regulations provides a number of protections to healthcare consumers regarding prescription drugs.

These include:

  1. Drug Coverage, Cost Sharing and Exclusions of Drugs, and Methods to Remove Drugs from Formulary
  2. Formulary Availability, including Posting the Formulary Online
  3. Off-Formulary Drugs
  4. Step Therapy
  5. State Department of Managed Health Care Approval Of Drug Exclusion
  6. Prescription Denials
  7. Off-Label Prescriptions
  8. Documented Process to Request Formulary Additions
  9. Contraceptive Coverage
  10. Uniform Prescription Drug Information
  11. Experimental and Investigational Therapies Access
  12. Drugs for Pain Management for the Terminally Ill

Formularies can be complex and are not always well understood by many consumers.  The Knox Keen Act as set forth in California Health and Safety Code §1363.01 provides that:

“Every plan that covers prescription drug benefits shall provide notice in the evidence of coverage and disclosure form to enrollees regarding whether the plan uses a formulary. The notice shall be in language that is easily understood and in a format that is easy to understand. The notice shall include an explanation of what a formulary is, how the plan determines which prescription drugs are included or excluded, and how often the plan reviews the contents of the formulary…”

“…(B) The clinical efficacy of the drug(s) proposed to be limited or excluded;

(C) The availability of therapeutic equivalents or other drugs medically necessary for treatment of health conditions;

(D) The specific health plan products to which the copayment, coinsurance, deductible, limitation, or exclusion will apply;

(E) The duration of the limitation or exclusion;

(F) The rationale for the copayment, coinsurance, deductible, limitation or exclusion;…”

Formularies are managed by Pharmacy Benefit Managers.  See this article in Consumer Affairs about formularies and Pharmacy Benefit Managers for more information.

Related Topics