Michigan Office of Administrative Hearings and Rules

MOAHR-Rules@michigan.gov

AGENCY REPORT TO THE

JOINT COMMITEE ON ADMNINISTRATIVE RULES (JCAR)

1. Agency Information

Agency name:

Insurance and Financial Services

Division/Bureau/Office:

Insurance

Name of person completing this form:

Ryan Durkin

Phone number of person completing this form:

517-284-8609

E-mail of person completing this form:

DurkinR@michigan.gov

Name of Department Regulatory Affairs Officer reviewing this form:

Sarah Wohlford

2. Rule Set Information

MOAHR assigned rule set number:

2023-10 IF

Title of proposed rule set:

Pharmacy Benefit Manager Licensure and Regulation Act

3. Purpose for the proposed rules and background:

Pursuant to the pharmacy benefit manager licensure and regulation act, 2022 PA 11, the general

purpose of these rules is to establish the following: fees for license applications and renewals; the

license renewal schedule; standards regarding fines; suspension of licensure, restriction of licensure,

and revocation of licensure.

4. Summary of proposed rules:

The pharmacy benefit manager licensure and regulation act, 2022 PA 11, mandates that the Director

of the Department of Insurance and Financial Services promulgate rules that are necessary or required

to implement the act, including rules regarding fines, suspension of licensure, restriction of licensure,

and revocation of licensure. Consistent with the pharmacy benefit manager licensure and regulation

act, 2022 PA 11, the proposed rules establish the following: the application contents and fee, the

license renewal schedule and fee, and standards regarding fines, suspension of licensure, restriction of

licensure, and revocation of licensure.

5. List names of newspapers in which the notice of public hearing was published and

publication dates:

Lansing State Journal: May 16, 2023

Detroit Free Press: May 16, 2023

Daily Press (Escanaba): May 16, 2023

MCL 24.242 and 24.245

Agency Report to JCAR-Page 2

6. Date of publication of rules and notice of public hearing in Michigan Register:

5/15/2023

7. Date, time, and location of public hearing:

6/9/2023 10:00 AM at First Floor Forum , Michigan Library & Historical Center, 702 West

Kalamazoo Street, Lansing, Michigan 48915

8. Provide the link the agency used to post the regulatory impact statement and cost-benefit

analysis on its website:

https://ARS.apps.lara.state.mi.us/Transaction/RFRTransaction?TransactionID=1437

9. List of the name and title of agency representative(s) who attended the public hearing:

Sarah Wohlford, Senior Deputy Director

Karen Dennis, Director, Office of Insurance Rates and Forms

Michele Riddering, Director, Office of Insurance Licensing, Investigations, and Audits

Adryne Boynton, Manager, Office of Insurance Licensing, Investigations, and Audits

Ryan Durkin, Administrative Law Specialist

10. Persons submitting comments of support:

Jill McCormack and Steven C. Anderson, FASAE, CAE, IOM, submitted comments on behalf of the

National Association of Chain Drug Stores indicating support.

11. Persons submitting comments of opposition:

The Department received comments indicating opposition by Miguel S. Rodriguez (on behalf of

American Pharmacies), Eric Roath, PharmD, MBA (on behalf of Michigan Pharmacists Association),

Anne Cassity (on behalf of National Community Pharmacists Association), and Peter Fjelstad (on

behalf of Pharmaceutical Care Management Association).

12. Persons submitting other comments:

The Department did not receive any other timely comments.

13. Identify any changes made to the proposed rules based on comments received during the

public comment period:

MCL 24.242 and 24.245

Agency Report to JCAR-Page 3

Name &

Organization public hearing

Comments made at Written

Agency Rationale Rule number

for Rule Change & citation

and Description changed

of Change(s)

Comments

Made

1

Peter Fjelstad,

Director, State

Affairs,

Delete the entire Rule 500.31(1)(b) R 500.31(1)

provision as this defined “client,” a (b)

is unsupported by word that is not

Pharmaceutical

Care

Management

Association

law.

defined in the

Pharmacy Benefit

Manager

Licensure and

Regulation Act,

2022 PA 11 (the

“Act”), based on

the Act’s

definition of

“pharmacy benefit

manager,” see

MCL 550.817(l).

Since the agency

has revised Rule

500.33(2)(c)(i) in

response to public

comment (see

below), the

definition of

“client” is no

longer necessary.

The agency

provision because amended Rule

it is too 500.33(2)(c)(i) to

2

Peter Fjelstad,

Director, State

Affairs,

Delete the

R 500.33(2)

(c)(i)

Pharmaceutical

Care

Management

Association

burdensome for a change “[a] list of

pharmacy benefit every client on

manager to list all whose behalf the

businesses that it applicant intends

“intends to

to contract to

contract” with.

Alternatively,

substitute this

provide pharmacy

health services to

residents of this

requirement with state” to “[a] list

the following:

“At the time of

of every health

plan or carrier on

application, a list behalf of which

of health plans or the applicant

carriers that a

contracts with a

MCL 24.242 and 24.245

Agency Report to JCAR-Page 4

PBM contracts

with to provide

pharmacy or a

pharmacy services

pharmacy health administration

services to

organization to

provide pharmacy

health services to

individuals

covered by the

health plan or

carrier.” The

individuals

covered by the

health plan or

carrier.”

revised rule

reduces the

administrative

burden of the

disclosure and

adheres more

closely to the

definition of

“pharmacy benefit

manager” in the

Act, MCL 500.817

(l). The agency did

not adopt the

suggested

language verbatim

because it

contained

undefined terms

and was not

sufficiently clear.

3

Peter Fjelstad,

Director, State

Affairs,

Delete the entire The agency

provision as it is deleted this

R 500.33(2)

(c)(ii)

too broad and

provision to avoid

Pharmaceutical

Care

would be difficult unnecessary

for a company to regulatory burden.

Management

Association

quantify.

Because of this

deletion, the

former Rule

500.33(2)(c)(iii) is

now Rule 500.33

(2)(c)(ii).

MCL 24.242 and 24.245

Agency Report to JCAR-Page 5

Add a new The agency added R 500.33(2)

4

Miguel S.

Rodriguez,

General

subrule (2)(c)(iv) a new paragraph to (c)(iii)

to Rule 500.33 to subrule (2)(c) to

Counsel,

require a

implement the

American

Pharmacies

pharmacy benefit commenter’s

manager to

suggestion, which

disclose whether the agency agrees

the events

would help the

referenced in

Director enforce

Section 11(4) and Section 11(4) and

Section 11(5)(e)- Section 11(5)(e)-

(f), MCL

(f) of the Act,

550.821, have

MCL 550.821, by

occurred so that enhancing

the Director is

informed and

reporting

requirements in a

remains apprised manner that is not

of any such

occurrences.

unduly

burdensome.

14.Date report completed:

8/31/2023

MCL 24.242 and 24.245