Pharmacy Benefit Reform Act - Specialty Drug Designation Referral Process

Section 901(c) of the Pharmacy Benefit Reform Act, as amended by Act 77 of 2024, requires that the Insurance Department (Department) “publish guidance to effectuate … an efficient process by which a pharmacy may refer designation of a prescription drug under a health benefit plan.” The guidance will include a list of prescription drugs classified as specialty drugs.  That list will include “the list of prescription drugs classified as a specialty drug under the Medical Assistance (MA) fee-for-service program,” but that (MA) list is “not to be considered exclusive.” The list in the guidance is published to facilitate the Department’s review of rates and forms for individual, small group, student health, and large group health benefit plans.  The listing of prescription drugs not on the MA list is preliminary, tentative, and nonbinding for purposes of that review process.  View Section 901(c) Guidance Specialty Drug List.

Beginning on January 13, 2025, a pharmacy may refer to the Department pharmacy benefit manager’s (PBM’s) or health insurer’s designation of a particular drug as a specialty drug if, but only if, the designation was made by a (PBM) or a health insurer relating to prescription drug coverage under a health benefit plan, i.e., a fully-insured plan.  The Pharmacy should submit the referral to the Department’s Bureau of Consumer Services, who will evaluate whether the request is eligible for review.  The referral should include as much of the following information as possible:

• Name and contact information of the PBM.
• Identification of the drug referred, including the RXCUI, if available.
• Information that will help the Department determine that the PBM’s specialty drug classification is related to a “health benefit plan” as defined under Act 77 of 2024.  For example:
  • A copy of the health insurance policy at issue, including the prescription drug coverage provisions. 
  • A copy of the covered person’s insurance card.
  • Insurance or health plan name and contact information, including website, phone number, or email address.
  • The name of the covered individual.
  • Any other documents that confirm that the covered individual is provided pharmacy benefits by the health benefit plans, either directly or pursuant to a contract administered by a PBM.
• Information that will help the Department determine whether the drug meets the criteria for designating a drug as a specialty drug, including whether the drug:
  • Requires specialized handling or administration.
  • Requires specialized clinical care (including frequent dosing adjustments, clinical monitoring or expanded patient service, intensive patient counseling and ongoing clinical support).
  • Is prescribed to address a rare, complex, chronic or life-threatening medical condition.
  • Has a limited or exclusive distribution and is not typically stocked or dispensed by a retail pharmacy.

If the Department establishes that the request is ineligible for review or the Department is unable to confirm jurisdiction over the referral, the Department will communicate that fact to both the pharmacy and the PBM identified by the pharmacy by letter and electronic mail. 

If the Department’s evaluation concludes that the Pharmacy’s request is eligible for review, the Department will forward the request for review and any supporting documentation to the Department’s Administrative Hearings Office for the opportunity for an administrative hearing, copying both the pharmacy and the PBM on the transmittal letter.

The Department’s Administrative Hearings Office will conduct the hearing between the pharmacy and the PBM.  At the hearing, the parties will have an opportunity to present witness testimony, offer documentary exhibits, and cross-examine the other party’s witnesses. At the conclusion of the hearing, the parties are afforded the opportunity to file written argument in support of their position. Following the receipt of all evidence, the Insurance Commissioner will issue a determination through the Administrative Hearings Office identifying whether the drug subject to the hearing is consistent with the statutory definition of “specialty drug” in section 103 of Act 77 of 2024.

After issuance of the determination, either party has the right to request reconsideration within fifteen (15) days and/or to file an appeal with the Commonwealth Court within thirty (30) days. Filing a request for reconsideration does not add time to the deadline for filing an appeal with the Commonwealth Court.

The Department’s 901(c) adjudications will be available on its website.  Additionally, the Department will update the list of specialty drugs in accordance with any determinations made.