Does the Privacy Rule permit health plans to disclose protected health information to pharmaceutical manufacturers for the adjudication of drug rebate contracts?

Answer:

Yes. The Privacy Rule permits a health plan to disclose protected health information, such as prescription numbers, to a pharmaceutical manufacturer for purposes of adjudicating claims submitted under a drug rebate contract. Because the amount of the rebate is based on drug utilization by individual enrollees, such disclosures are permitted as part of a covered entity’s payment activities. See 45 CFR 164.502(a)(1)(ii) and the definition of “payment” at 45 CFR 164.501.

A business associate agreement is not required to make these disclosures. However, a health plan must make reasonable efforts to limit the information disclosed to that which is the minimum necessary to adjudicate claims under the contract. See 45 CFR 164.502(b) and 164.514(d) for more information on the minimum necessary standard.