Establishes program goals, and adopts income and other eligibility requirements, for state discounted drug prescription program, renamed "Rx Plus." Requires creation of preferred drug list and review by pharmacy and therapeutic committee. Clarifies consequences of manufacturer nonparticipation. Appropriates funds for the program. (HB2005 HD1)
HOUSE OF REPRESENTATIVES
TWENTY-SECOND LEGISLATURE, 2004
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. Chapter 346, Hawaii Revised Statutes, is amended by adding a two new sections to part XIII to be appropriately designated and to read as follows:
"§346-A Program goals. The legislature finds that affordability is critical in providing access to prescription drugs for Hawaii residents. This part is enacted by the legislature to enable the State to make prescription drugs more affordable for qualified Hawaii residents, thereby increasing the overall health of Hawaii residents, promoting healthy communities, and protecting the public health and welfare, and to integrate the program as much as possible with other state health programs. It is not the intention of the State to discourage employers from offering to pay or paying for prescription drug benefits for their employees or to supplant employer-sponsored prescription drug benefits plans.
§346-B Rx plus preferred drug list. (a) The department shall establish a Rx plus preferred drug list that includes but is not limited to:
(1) Drugs listed on the State's medicaid preferred drug list;
(2) Antipsychotic drugs;
(3) Antidepressant drugs;
(4) Chemotherapy drugs;
(5) Antiretroviral drugs;
(6) Immunosuppressive drugs; and
(7) Any other drugs pursuant to this chapter.
(b) The pharmacy and therapeutic committee shall review and recommend drugs for placement on the Rx plus preferred drug list, striving to identify the safest and most efficacious drugs that are available at the lowest cost. The committee's recommendations may take into consideration any of the following factors:
(1) Therapeutic value for the disease or condition under treatment;
(2) Clinical efficacy;
(4) Cost; and
(5) Other relevant factors as determined by the committee.
(c) When considering categories of drugs designed to treat specialized chronic medical conditions and diseases, the committee shall consult with physicians and other health care professionals with specialized clinical knowledge and expertise in this area, either in their capacity as consultants serving on a subcommittee of the committee, or as physicians or pharmacists with a practice or specialty in chronic diseases.
(d) The determination of a drug's safety and efficacy shall be consistent with the standards set forth in the peer-reviewed literature and other available sources including, but not limited to the American Hospital Formulary Service Drug Information, the United States Pharmacopoeia Drug Information, the DRUGDEX Information System, and the America Medical Association Drug Evaluations.
(e) The determination of a drug's net cost shall consider the pharmacy reimbursement amount authorized under section 346-317, as adjusted by manufacturer's rebates to be paid to the department. The committee may not consider a drug's net cost unless it determines that the drug has no significant clinical or safety advantages over one or more alternative drugs, when used for a given purpose."
SECTION 2. Section 346-311, Hawaii Revised Statutes, is amended as follows:
1. By adding six new definitions to be appropriately inserted and to read as follows:
""Initial discounted price" as it pertains to a drug means the price that the department pays medicaid participating pharmacies to purchase the drug for its medicaid members.
"Participating pharmacy" or "retail pharmacy" means a retail pharmacy located in this State, or another business licensed to dispense prescription drugs in this State, that elects to participate in the program.
"Pharmacy and therapeutic committee" means the committee established by the department that advises the state medicaid director on the Rx plus preferred drug list and may be the same entity as the committee established in the medicaid program pursuant to section 346-14.
"Preferred drug" includes but is not limited to:
(1) A drug listed on the State's medicaid preferred drug list;
(2) An antipsychotic drug;
(3) An antidepressant drug;
(4) A chemotherapy drug;
(5) An antiretroviral drug;
(6) An immunosuppressive drug; and
(7) Any other drug pursuant to this chapter.
"Qualified resident" means a resident of the State who has a family income equal to or less than three hundred fifty per cent of the federal poverty level, who does not have prescription drug coverage or has exceeded the extent of their benefits, and who is enrolled in the program.
"Secondary discounted price" as it pertains to a drug means the initial discounted price less any further discounts paid out of the Rx plus special fund."
2. By amending the definition of "program" to read as follows:
""Program" means the Rx plus program except as otherwise provided."
SECTION 3. Section 346-312, Hawaii Revised Statutes, is amended to read as follows:
§346-312[ ]] Rx plus program. (a) There is established within the department, the Rx plus program. The program will combine the purchasing power of all [ persons] qualified residents to enable the State to reduce prescription drug costs and to improve the quality of health care for [ those in the group.] qualified Hawaii residents in the program, thereby increasing the overall health of Hawaii residents, promoting healthy communities, and protecting the public health and welfare, and to integrate the program as part of any statewide program for the uninsured.
(b) The program shall utilize manufacturer rebates and pharmacy discounts to reduce prescription drug prices.
(c) The department may administer the program or contract with a third party or third parties [
in accordance with chapter 103F] to administer any single component, or combination of components of the program including outreach, eligibility, claims, administration, rebate negotiations and recovery, and redistribution[ .] in order to achieve the maximum possible discount for Hawaii residents. Any contract to administer any program component shall prohibit the contractor from receiving any compensation or other benefits from any manufacturer participating in the program.
(d) The department shall conduct ongoing quality assurance activities similar to those used in the medicaid program."
SECTION 4. Section 346-313, Hawaii Revised Statutes, is amended to read as follows:
§346-313[ ]] Program eligibility. (a) All qualified residents of the State shall be eligible to participate in the Rx plus program.
(b) The department:
(1) Shall establish procedures [
for determining] to determine eligibility and shall issue program enrollment cards to eligible qualified residents;
(2) Shall undertake outreach efforts to build public awareness of the program and maximize the enrollment of eligible qualified residents; and
(3) May adjust the requirements and terms of the program by rule to accommodate any federally funded or authorized prescription drug program."
SECTION 5. Section 346-314, Hawaii Revised Statutes, is amended to read as follows:
§346-314[ ]] Rebate agreement. (a) [ Any prescription] A drug manufacturer or labeler that sells prescription drugs in the State may enter into a rebate agreement with the department for [ the Rx access program.] this purpose. The rebate agreement shall require the manufacturer to make rebate payments to the State each calendar quarter or according to a schedule established by the department.
(b) The administrator shall negotiate the amount of the rebate required from a manufacturer[
.] in accordance with this part.
(c) The administrator shall take into consideration the rebate calculated under the medicaid rebate program pursuant to title 42 United States Code section 1369r-8, the average wholesale price of prescription drugs, and any other information on prescription drug prices and price discounts.
(d) The administrator shall use the administrator's best efforts to obtain an initial rebate amount equal to or greater than the rebate calculated under the medicaid program pursuant to title 42 United States Code section 1369r-8.
(e) With respect to rebates effective July 1, 2005, the administrator shall use the administrator's best efforts to obtain a rebate amount equal to or greater than the amount of any discount, rebate, or price reduction for prescription drugs provided to the federal government."
SECTION 6. Section 346-315, Hawaii Revised Statutes, is amended to read as follows:
§346-315[ ]] [ Nonparticipating] Participating and nonparticipating manufacturers. [ If the department and a drug manufacturer fail to reach agreement on the terms of a rebate, the department shall conduct a review of whether to place that manufacturer's products on the prior authorization list or formularies for the state medicaid program in accordance with this chapter.] (a) The [ department may release the] names of manufacturers that enter and do not enter into rebate agreements[ . This information] pursuant to this part shall be deemed public information. The department shall release this information to health care providers and the public.
(b) The department or administrator may also provide to [d
octors, pharmacists, and other] health [ professionals] care providers information about the relative cost of drugs produced by manufacturers that enter into rebate agreements compared to the cost of drugs produced by those that do not enter into rebate agreements. The department shall adopt rules under chapter 91 creating procedures for the implementation of this section."
SECTION 7. Section 346-316, Hawaii Revised Statutes, is amended to read as follows:
§346-316[ ]] Discounted retail prices for program participants. (a) Each retail pharmacy participating in the Rx plus program shall [d iscount the price of] sell drugs [ covered by the program and sold] to [ program participants.] qualified residents at the lowered initial discounted price, in addition to the secondary discounted price as such discounted prices are determined by the department pursuant to this part.
(b) The department shall establish discounts for drugs covered by a rebate agreement and shall promote the use of [
reduced-cost] safe, efficacious, and cost-effective drugs, taking into consideration:
(1) Reduced prices for state and federally capped drug programs;
Dispensing] Differential dispensing fees;
(3) Administrative costs of the department; and
The average of all rebates provided pursuant to section 346-314, weighted by sales of drugs subject to those rebates over the most recent twelve-month period for which the information is available.] The recommendation of the pharmacy and therapeutic committee.
In making a determination under this section, the administrator may rely on pricing information for a selected number of prescription drugs where the list of drugs selected is: (1) Representative of the prescription drug needs of the residents of the State; and (2) Made public.] Beginning July 1, 2004, a participating pharmacy shall offer the initial discounted price.
(d) Beginning July 1, 2004, a participating pharmacy shall offer prescription drugs below the average wholesale price, plus a dispensing fee designated by the department. These initial price levels shall be calculated by the department and the dispensing fee shall not be less than that provided under the state medicaid program. The average wholesale price is the price on a specific commodity that is assigned by the drug manufacturer and is listed in a nationally-recognized drug pricing file.
(e)] (d) No later than [ January] July 1, 2005, a participating pharmacy shall offer [ prescription drugs at or below the initial price levels specified in subsection (d), minus the amount of any discounts as calculated pursuant to subsections (b) and (c) to be paid by the State to the pharmacy.] the secondary discounted price, if available."
SECTION 8. Section 346-317, Hawaii Revised Statutes, is amended to read as follows:
§346-317[ ]] Pharmacy reimbursement. (a) A pharmacy shall submit claims to the department to verify the amount charged to program participants. On a schedule to be determined by the department, the department shall reimburse each pharmacy for the discounts of prescription drugs provided to program participants.
(b) The department shall collect pharmacy use data necessary to calculate the amount of the manufacturer rebate under section 346-314. The department shall protect the confidentiality of information received as required under state or federal law, rule, or regulation.
(c) The department shall not impose transaction charges on participating pharmacies that submit claims or receive payments under the program."
SECTION 9. Section 346-318, Hawaii Revised Statutes, is amended to read as follows:
§346-318[ ]] Rx plus special fund. (a) There is established within the state treasury, to be administered by the department, the Rx plus special fund into which shall be deposited:
(1) All moneys received from manufacturers who pay rebates as provided in section 346-314;
(2) Appropriations made by the legislature to the fund; and
(3) Any other revenues designated for the fund.
(b) Moneys in the Rx plus special fund shall be used for the following purposes:
(1) Reimbursement payments to participating pharmacies for discounts provided to program participants;
(2) The cost of administering the Rx plus program, including salary and benefits of employees, computer costs[
;], and contracted services as provided in section 346-312; and
(3) Any other purpose deemed necessary by the department for the purpose of operating and administering the Rx plus program.
All interest on special fund balances shall accrue to the special fund. Upon dissolution of the Rx plus special fund, any unencumbered moneys in the fund shall lapse [
to] into the general fund."
SECTION 10. Section 346-319, Hawaii Revised Statutes, is amended to read as follows:
§346-319[ ]] Annual report. The department shall report the enrollment and financial status of the Rx plus program to the legislature no later than twenty days prior to the convening of each regular session, beginning with the 2005 regular session."
SECTION 11. Chapter 346, Hawaii Revised Statutes, is amended by amending the title of part XIII to read as follows:
PART XIII.[ ]] Rx PLUS PROGRAM"
SECTION 12. There is appropriated out of the general revenues of the State of Hawaii the sum of $400,000 or so much thereof as may be necessary for fiscal year 2004-2005 for the Hawaii Rx program.
The sum appropriated shall be expended by the department of human services for the purposes of this Act.
SECTION 13. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 14. In codifying the new sections added by section 1 of this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in designating the new sections in this Act.
SECTION 15. This Act shall take effect on July 1, 2004.