2020 South Dakota Codified Laws
Title 58 - Insurance
Chapter 29E - Pharmacy Benefits Management
Section 58-29E-1 - Definition of terms.

58-29E-1. Definition of terms.

Terms used in this chapter mean:

(1)"Covered entity," a nonprofit hospital or medical service corporation, health insurer, health benefit plan, or health maintenance organization; a health program administered by a department or the state in the capacity of provider of health coverage; or an employer, labor union, or other group of persons organized in the state that provides health coverage to covered individuals who are employed or reside in the state. The term does not include a self-funded plan that is exempt from state regulation pursuant to ERISA, a plan issued for coverage for federal employees, or a health plan that provides coverage only for accidental injury, specified disease, hospital indemnity, medicare supplement, disability income, long- term care, or other limited benefit health insurance policies and contracts;

(2)"Covered individual," a member, participant, enrollee, contract holder, policy holder, or beneficiary of a covered entity who is provided health coverage by the covered entity. The term includes a dependent or other person provided health coverage through a policy, contract, or plan for a covered individual;

(3)"Director," the director of the Division of Insurance;

(4)"Generic drug," a chemically equivalent copy of a brand-name drug with an expired patent;

(5)"Labeler," an entity or person that receives prescription drugs from a manufacturer or wholesaler and repackages those drugs for later retail sale and that has a labeler code from the federal Food and Drug Administration under 21 C.F.R. §270.20 (1999);

(6)"Pharmacy benefits management," the procurement of prescription drugs at a negotiated rate for dispensation within this state to covered individuals, the administration or management of prescription drug benefits provided by a covered entity for the benefit of covered individuals, or any of the following services provided with regard to the administration of the following pharmacy benefits:

(a)Mail service pharmacy;

(b)Claims processing, retail network management, and payment of claims to pharmacies for prescription drugs dispensed to covered individuals;

(c)Clinical formulary development and management services;

(d)Rebate contracting and administration;

(e)Certain patient compliance, therapeutic intervention, and generic substitution programs; and

(f)Disease management programs involving prescription drug utilization;

(7)"Pharmacy benefits manager," an entity that performs pharmacy benefits management. The term includes a person or entity acting for a pharmacy benefits manager in a contractual or employment relationship in the performance of pharmacy benefits management for a covered entity and includes mail service pharmacy. The term does not include a health carrier licensed pursuant to Title 58 when the health carrier or its subsidiary is providing pharmacy benefits management to its own insureds; or a public self-funded pool or a private single employer self-funded plan that provides such benefits or services directly to its beneficiaries;

(8)"Proprietary information," information on pricing, costs, revenue, taxes, market share, negotiating strategies, customers, and personnel held by private entities and used for that private entity's business purposes;

(9)"Trade secret," information, including a formula, pattern, compilation, program, device, method, technique, or process, that:

(a)Derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and

(b)Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.

Source: SL 2004, ch 311, §1.