Report Title:

Medicaid Prescription Drug Expansion Program; Special Fund

 

Description:

Establishes the Medicaid prescription drug expansion program to offer discounted prescription drugs to qualified individuals whose income is at or below 300 per cent of the federal poverty level; establishes the Medicaid prescription drug rebate special fund to receive all rebates from pharmaceutical manufacturers from the prescription drug expansion program; appropriates funds for rebates and administration of the program; and allows general fund to be reimbursed from manufacturers rebates if funds are sufficient. (HB1950 CD1)

HOUSE OF REPRESENTATIVES

H.B. NO.

1950

TWENTY-FIRST LEGISLATURE, 2002

S.D. 2

STATE OF HAWAII

C.D. 1


 

A BILL FOR AN ACT

 

RELATING TO PRESCRIPTION DRUGS.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. The legislature finds that prescription drugs have become unaffordable, especially for the elderly, disabled persons, and individuals on fixed incomes. The legislature is further aware that most drug companies offer low- or no-cost drugs for target groups. However, these programs are often inadequate in that they only offer certain drugs at minimal discount or require the individual to obtain reimbursement only after spending full price for the drug. The legislature further finds that other states have been successful in offering rebate programs without high cost to the users and residents of the state. The legislature agrees that it is necessary and appropriate to provide some relief for the high cost of prescription drugs by utilizing rebates and start-up general appropriations, for which reimbursement will be sought through pharmaceutical rebates and federal reimbursement programs.

The purpose of this Act is establish a prescription drug expansion program under medicaid to make prescription drugs more affordable for those individuals whose income is at or below three hundred per cent of the federal poverty level.

SECTION 2. Chapter 346, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"346-    Medicaid prescription drug expansion program; medicaid prescription drug rebate special fund. (a) The department shall provide for an expansion of prescription drug benefits under the medicaid program, which shall offer discounted prescription drugs to qualified individuals whose income is at or below three hundred per cent of the federal poverty level.

(b) There is established within the state treasury the medicaid prescription drug rebate special fund to be administered by the department, into which shall be deposited:

(1) All moneys received by the State as rebates from pharmaceutical manufacturers under the medicaid prescription drug expansion program; and

(2) Appropriations made by the legislature.

(c) Moneys in the medicaid prescription drug rebate special fund shall be used for the following purposes:

(1) Expanding medicaid prescription drug benefits; and

(2) Administering and operating the medicaid prescription drug expansion program.

(d) Upon dissolution of the medicaid prescription rebate special fund, any unencumbered moneys in the fund shall lapse to the general fund."

SECTION 3. There is appropriated out of the general revenues of the State of Hawaii the sum of $1,500,000 or so much thereof as may be necessary for fiscal year 2002-2003 to be deposited into the medicaid prescription drug rebate special fund.

SECTION 4. There is appropriated out of the medicaid prescription drug rebate special fund the sum of $1,500,000 or so much thereof as may be necessary for fiscal year 2002-2003 for the following purposes:

(1) Paying $1 to a participating pharmacist under the medicaid program for each prescription written for a qualified individual; provided that:

(A) The department of human services obtains a waiver from the federal government to provide prescription drugs at medicaid rates to qualified individuals; and

(B) "Qualified individual" means an individual whose income is at or below three hundred per cent of the federal poverty level;

and

(2) Administrative costs associated with the medicaid prescription drug expansion program, including salary and benefits of eight full-time equivalent employees and related operating costs including lease rent, equipment, consultant contracts, and contractual services of the medicaid pharmacy fiscal agent.

The sum appropriated shall be expended by the department of human services for the purposes of this Act.

SECTION 5. The general funds appropriated in section 3 shall be reimbursed by the medicaid prescription drug rebate special fund by June 30, 2005, consistent with the fiscal resources of the fund and the best interests of the medicaid prescription drug expansion program.

SECTION 6. New statutory material is underscored.

SECTION 7. This Act shall take effect on July 1, 2002.