Report Title:

Prescription Drugs; Special Fund; Drug Expansion Program

 

Description:

Creates special fund to hold Medicaid prescription drug rebates to State, Creates an expansion of the medicaid eligibility for prescription drugs; appropriate funds for the expansion program. (SD1)

THE SENATE

S.B. NO.

2027

TWENTY-FIRST LEGISLATURE, 2002

S.D. 1

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

RELATING TO PRESCRIPTION DRUGS.

 

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

SECTION 1. The legislature recognizes that prescription drugs have become unaffordable, especially for the elderly 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.

This legislature is determined to provide some relief to the high cost of prescription drugs by utilizing rebates and through general appropriations. This Act will make prescription drugs more affordable for those individuals who income is at or below three hundred per cent of the federal poverty level. Other states have been successful in offering similar programs without exorbitant cost, the legislature will move to providing the same type of relief without the high cost to the residents of this State.

SECTION 2. Chapter 328, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"328-    Medicaid prescription drug rebate special fund. (a) There is established within the state treasury the Medicaid prescription drug rebate special fund into which shall be deposited all moneys received by the State as rebates from pharmaceutical manufacturers for payments made by the State for prescription drugs for Medicaid patients.

(b) The fund shall be used to expand Medicaid prescription drug benefits and shall be administered by the department.

(c) Upon termination of the Medicaid prescription drug expansion program, any moneys in the fund shall be paid into the general fund."

SECTION 3. Chapter 328, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"328-    Medicaid prescription drug expansion program. 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."

SECTION 4. The department of human services shall deposit into the Medicaid prescription drug rebate special fund the State's portion of all Medicaid rebate funds received since July 1, 2001, that have not been deposited into the state general fund before the effective date of this Act.

SECTION 5. There is appropriated out of the Medicaid prescription drug rebate special fund, the sum of $          , or so much thereof as may be necessary for fiscal year 2002-2003 for the purpose of paying $1 for each prescription written for a qualified individual; provided that:

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

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

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

SECTION 6. There is appropriated out of the general revenues of the State of Hawaii the sum of $          , or so much thereof as may be necessary for fiscal year 2002-2003, for the administrative cost associated with the prescription drug expansion program. The funds shall be used for:

(1) Hiring five employees, and their benefits;

(2) Other administrative costs to include but not be limited to rent, supplies, computers, workstations; and

(3) Costs for processing each prescription.

These funds are to be matched by the federal government.

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

SECTION 7. There is appropriated out of the general revenues of the State of Hawaii the sum of $          , or so much thereof as may be necessary for fiscal year 2002-2003, for front loading the cost of the Medicaid prescription drug expansion program.

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

SECTION 8. The appropriation in Section 7 shall be repaid to the general fund by the Medicaid prescription drug expansion program in a manner to be determined by the director of finance.

SECTION 9. New statutory material is underscored.

SECTION 10. This Act shall take effect upon approval, provided that sections 5, 6, and 7, shall take effect on July 1, 2002.