Colorado § 24-50-1203 - Definitions.

§ 24-50-1203. Definitions.

As used in this part 12, unless the context otherwise requires:

(1) "AWP" means average wholesale price.

(2) "Department" means the department of personnel.

(3) "GNC" means guaranteed net cost.

(4) "Market check" means a technology-driven evaluation of an incumbent PBM's prescription drug pricing based on benchmark comparators derived from PBM reverse auction processes conducted in the United States over the previous twelve months.

(5) "NADAC" means national average drug acquisition cost.

(6) "NIST" means national institute of standards and technology.

(7) "Participant bidding agreement" means an online agreement that details common definitions, prescription drug classifications, rules, data access and use rights, and other optimal contract terms benefitting the state that all PBM bidders must accept as a prerequisite for participation in a PBM reverse auction.

(8) "Pharmacy benefit manager" or "PBM" means a person, business, or other entity that, pursuant to a contract with a health-care service plan, manages, in whole or through a coordination of service providers, the prescription drug coverage provided by the health-care service plan, including, but not limited to, the processing and payment of claims for prescription drugs, the performance of drug utilization review, the processing of prior authorization requests for specified drugs, the adjudication of appeals or grievances related to prescription drug coverage, contracting with network pharmacies, and controlling the cost of covered prescription drugs.

(9) "PBM reverse auction" means an automated, transparent, and dynamically competitive bidding process conducted online that starts with an opening round of bids and allows qualified PBM bidders to counter-offer a lower price for as many rounds of bidding as determined by the department for a multiple health plan prescription drug purchasing group.

(10) "Price" means the projected cost of a PBM offer or bid for providing prescription drug benefits pursuant to this part 12, to enable direct comparison of the comparably calculated costs of competing PBM proposals over the duration of the PBM services contract.

(11) "Real-time" means within no more than one hour.

(12) "Self-funded private sector health plan" means any self-funded private sector employer or multi-employer health plan.

(13) "Self-funded public sector health plan" means any group benefit plan provided pursuant to the "State Employees Group Benefits Act", part 6 of this article 50; any state-funded health plan or self-funded county, municipal, or other local government employee health plan; and any public school employee health plan, health plan of the university of Colorado, Colorado public four-year college, or Colorado community college system.

(14) "SOC 2" means service organization control 2.

Source: L. 2021: Entire part added, (HB 21-1237), ch. 217, p. 1145, § 1, effective June 7.