AB 24

This bill sets specifications on the development and use of and exceptions to

step therapy protocols for prescription drug coverage. A step therapy protocol, as

defined in the bill, is a protocol that establishes the specific sequence in which

prescription drugs for a specified medical condition that are medically appropriate

for a particular patient are covered by a policy or plan. When establishing a step

therapy protocol, an insurer, pharmacy benefit manager, or utilization review

organization must use clinical review criteria based on clinical practice guidelines

that meet certain criteria specified in the bill, including development and

endorsement of the guidelines either by a multidisciplinary panel of experts that

manages conflicts of interest among its members or, in the absence of a

multidisciplinary panel, based on peer reviewed publications. The bill requires the

insurer, pharmacy benefit manager, or utilization review organization to consider

the needs of atypical patient populations and diagnoses when establishing the

clinical review criteria.

If an insurer, pharmacy benefit manager, or utilization review organization

restricts the coverage of a prescription drug through a step therapy protocol, the

insurer, pharmacy benefit manager, or utilization review organization must provide

access to a process to request an exception to the step therapy protocol, though an

existing medical exceptions process may be used to satisfy this requirement. The

insurer, pharmacy benefit manager, or utilization review organization must

expeditiously grant an exception to the step therapy protocol under certain

circumstances specified in the bill, including when the drug is contraindicated for the

patient or will likely cause an adverse reaction for the patient; the drug is expected

to be ineffective; the patient tried the drug previously and discontinued its use due

to adverse event or ineffectiveness; use of the drug is not in the patient's best interest;

or the patient is stable on a different drug under this or a previous policy or plan.

Upon granting an exception to the step therapy protocol, the insurer, pharmacy

benefit manager, or utilization review organization must authorize coverage for the

drug prescribed by the patient's treating health care provider. An insured may

appeal a denied request for an exception to the step therapy protocol. An insurer,

pharmacy benefit manager, or utilization review organization must grant or deny a

request for an exception within 72 hours of receipt, or within 24 hours in exigent

circumstances. If this deadline is not met, the exception is considered granted.