KRS 304.17A-161: Definitions for KRS 304.17A -161, 304.17A -162, 304.17A -163, and

304.17A-165.

As used in this section and KRS 304.17A-162, 304.17A-163, and 304.17A-165 unless the

context requires otherwise:

(1) "Contracted pharmacy" or "pharmacy" means a pharmacy located in Kentucky

participating in the network of a pharmacy benefit manager through a direct contract

or through a contract with a pharmacy services administration organization or group

purchasing organization;

(2) "Drug product reimbursement" means th e amount paid by a pharmacy benefit

manager to a contracted pharmacy for the cost of the drug dispensed to a patient and

does not include a dispensing or professional fee;

(3) "Maximum allowable cost" means the maximum amount that a pharmacy benefit

manager will reimburse a pharmacy for the cost of a generic drug and does not

include a dispensing or professional fee; and

(4) "Pharmacy benefit manager" means an entity that, on behalf of a health benefit plan,

state agency, insurer, managed care organization providing services under KRS

Chapter 205, or other third-party payor:

(a) Contracts directly or indirectly with pharmacies to provide prescription drugs

to individuals;

(b) Administers a prescription drug benefit;

(c) Processes or pays pharmacy claims;

(d) Creates or updates prescription drug formularies;

(e) Makes or assists in making prior authorization determinations on prescription

drugs;

(f) Administers rebates on prescription drugs; or

(g) Establishes a pharmacy network.