Senate Bill sb0690

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    Florida Senate - 2001                                   SB 690

    By Senator Mitchell





    4-159B-01

  1                      A bill to be entitled

  2         An act relating to prescription drugs; creating

  3         the "Prescription Drug Fair Pricing Act";

  4         providing legislative findings and purpose;

  5         providing definitions; creating the

  6         Reduced-Cost Prescription Program within the

  7         Agency for Health Care Administration;

  8         requiring drug manufacturers and labelers that

  9         sell prescription drugs through any

10         state-funded program to enter into a rebate

11         agreement with the agency and make certain

12         rebate payments to state agencies; requiring

13         that the Secretary of Health Care

14         Administration negotiate the amount of the

15         rebate; requiring retail pharmacies to provide

16         a discount for drugs covered by the program and

17         sold to program participants; requiring that

18         the agency establish the discounted prices;

19         providing program eligibility for state

20         residents who do not have coverage for

21         prescription drugs under any health insurance

22         plan or public program; providing for an annual

23         enrollment fee; requiring retail pharmacies to

24         disclose the amount of savings to program

25         participants; requiring that the agency

26         reimburse retail pharmacies for discounted

27         prices; providing a procedure for resolving any

28         discrepancy in the rebate amount; requiring

29         that the agency annually report to the

30         Legislature on the Reduced-Cost Prescription

31         Program; providing rulemaking authority;

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    Florida Senate - 2001                                   SB 690
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  1         authorizing the agency to apply for federal

  2         waivers necessary to administer the program;

  3         providing an appropriation; providing an

  4         effective date.

  5

  6  Be It Enacted by the Legislature of the State of Florida:

  7

  8         Section 1.  Prescription Drug Fair Pricing Act.--

  9         (1)  SHORT TITLE.--This section may be cited as the

10  "Prescription Drug Fair Pricing Act."

11         (2)  FINDINGS AND PURPOSE.--

12         (a)  The Legislature finds that:

13         1.  Uninsured residents of this state pay excessive

14  prices for prescription drugs. In many cases, excessive drug

15  prices deny residents access to medically necessary health

16  care, and thereby threaten their health and safety. Many

17  residents are admitted to or treated at hospitals each year

18  because they cannot afford drugs prescribed for them that

19  could have prevented the need for hospitalization. Many others

20  must enter expensive institutional care settings because they

21  cannot afford the necessary prescription drugs that could have

22  supported them outside of an institution. All residents of

23  this state are threatened by the possibility that when they

24  need medically necessary prescription drugs most, they may be

25  unable to afford their doctor's recommended treatment.

26         2.  Residents of this state and other Americans pay the

27  highest prices in the world for prescription drugs, prices

28  that result in extremely high profits for drug companies.

29  Excessive pricing for prescription drugs undermines the

30  economy of this state by diminishing the ability of its

31  residents to contribute as employees and employers.

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    Florida Senate - 2001                                   SB 690
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  1         (b)  The purpose of this section is to make

  2  prescription drugs more affordable for state residents,

  3  thereby increasing the overall health of our families;

  4  benefiting employers, employees, and the fiscal strength of

  5  our society; promoting healthy communities; and improving the

  6  public health and welfare.

  7         (3)  DEFINITIONS.--As used in this section, the term:

  8         (a)  "Agency" means the Agency for Health Care

  9  Administration.

10         (b)  "Labeler" means a person or entity that receives

11  prescription drugs from a manufacturer or wholesaler and

12  repackages those drugs for later retail sale and that has a

13  labeler code from the Federal Food and Drug Administration

14  under section 207.20 of Title 21 of the Code of Federal

15  Regulations.

16         (c)  "Manufacturer" means a manufacturer of

17  prescription drugs and includes a subsidiary or affiliate of a

18  manufacturer.

19         (d)  "Retail pharmacy" means a business that is

20  licensed to dispense prescription drugs in this state and that

21  dispenses drugs covered by a rebate agreement under the

22  Reduced-Cost Prescription Program.

23         (e)  "Secretary" means the Secretary of Health Care

24  Administration or the secretary's designee.

25         (4)  REDUCED-COST PRESCRIPTION PROGRAM.--

26         (a)  The Reduced-Cost Prescription Program is

27  established within the agency to provide discounted

28  prescription drug prices to uninsured residents of this state.

29         (b)  Any drug manufacturer or labeler that sells

30  prescription drugs in this state through any program funded or

31  operated by the state shall enter into a rebate agreement with

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    Florida Senate - 2001                                   SB 690
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  1  the agency for the Reduced-Cost Prescription Program. The

  2  rebate agreement must require the manufacturer or labeler to

  3  make rebate payments to the appropriate state agency each

  4  calendar quarter according to a schedule established by the

  5  department.

  6         (c)  The secretary shall negotiate the amount of the

  7  rebate required from a manufacturer or labeler in accordance

  8  with this subsection.

  9         1.  The secretary shall take into consideration the

10  rebate calculated under the Medicaid Rebate Program pursuant

11  to section 1396r-8 of Title 42 of the United States Code, the

12  average wholesale price of prescription drugs, and any other

13  information with respect to prescription drug prices and price

14  discounts.

15         2.  The secretary shall use his or her best efforts to

16  obtain an initial rebate amount equal to or greater than the

17  rebate calculated under the Medicaid program pursuant to

18  section 1396r-8 of Title 42 of the United States Code.

19         3.  With respect to the rebate taking effect no later

20  than July 1, 2002, the secretary shall use his or her best

21  efforts to obtain an amount equal to or greater than the

22  amount of any discount, rebate, or price reduction for

23  prescription drugs provided to the Federal Government.

24         (d)  A retail pharmacy shall discount the price of

25  drugs covered by the Reduced-Cost Prescription Program and

26  sold to program participants.

27         1.  The agency shall establish discounted prices for

28  drugs covered by a rebate agreement and shall promote the use

29  of efficacious and reduced-cost drugs, taking into

30  consideration reduced prices for state and federally capped

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  1  drug programs, differential dispensing fees, administrative

  2  overhead, and incentive payments.

  3         2.  Beginning January 1, 2002, a retail pharmacy shall

  4  offer prescription drugs at or below the average wholesale

  5  price, minus 6 percent, plus the dispensing fee provided under

  6  the state Medicaid program. These initial price levels shall

  7  be specified by the secretary. The average wholesale price is

  8  the wholesale price charged on a specific commodity that is

  9  assigned by the drug manufacturer and is listed in a

10  nationally recognized drug-pricing file.

11         3.  No later than July 1, 2002, a retail pharmacy shall

12  offer prescription drugs at or below the initial price levels

13  specified in subparagraph 2., minus the amount of any rebate

14  paid by the state to the retail pharmacy, plus the dispensing

15  fee provided under the state Medicaid program. The secretary

16  shall specify the discounted price levels. In determining the

17  discounted price levels, the secretary shall consider an

18  average of all rebates weighted by sales of drugs subject to

19  these rebates over the most recent 12-month period for which

20  the information is available.

21         (e)1.  Any resident of the state who does not have

22  coverage for prescription drugs under any health insurance

23  plan or under any public program may participate in the

24  Reduced-Cost Prescription Program. The agency shall establish

25  simplified procedures for determining eligibility and issuing

26  enrollment cards to eligible residents. The agency shall

27  undertake outreach efforts to build public awareness of the

28  program and maximize enrollment by eligible residents. The

29  agency may adjust the requirements and terms of the

30  Reduced-Cost Prescription Program to accommodate any new

31  federally funded prescription drug programs.

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    Florida Senate - 2001                                   SB 690
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  1         2.  Each fiscal year, the agency shall establish an

  2  annual enrollment fee for the Reduced-Cost Prescription

  3  Program, which may not exceed $50. An eligible resident must

  4  pay the enrollment fee before enrolling in the program.

  5         (f)1.  The agency shall adopt rules requiring that

  6  retail pharmacies disclose to program participants the amount

  7  of savings provided as a result of the program. The rules

  8  shall protect proprietary information.

  9         2.  The agency may not impose transaction charges on

10  retail pharmacies that submit claims or receive payments under

11  the Reduced-Cost Prescription Program.

12         3.  A retail pharmacy shall submit claims to the agency

13  to verify the amount charged to program participants.

14         4.  On a weekly or biweekly basis, the agency shall

15  reimburse a retail pharmacy for discounted prices provided to

16  program participants.

17         5.  The agency shall collect from the retail pharmacy

18  any data that is necessary to calculate the amount of the

19  rebate from the manufacturer or labeler. The agency shall

20  protect the confidentiality of all information subject to

21  confidentiality protection under state or federal law or rule.

22         (g)  The name of any manufacturer or labeler that does

23  not enter into a rebate agreement as provided in paragraph

24  (4)(c) is public information and the department shall release

25  this information to the public. The agency shall impose

26  requirements for prior authorization under the Medicaid

27  program, as permitted by law, for dispensing prescription

28  drugs provided by a manufacturer or labeler that does not

29  enter into a rebate agreement.

30         (h)  Any discrepancy in the rebate amount must be

31  resolved as provided in this paragraph.

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    Florida Senate - 2001                                   SB 690
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  1         1.  If there is a discrepancy in the manufacturer's or

  2  labeler's favor between the amount claimed by a pharmacy and

  3  the amount rebated by the manufacturer or labeler, the agency,

  4  at the agency's expense, may hire a mutually agreed-upon

  5  independent auditor. If a discrepancy exists following the

  6  audit, the manufacturer or labeler shall justify the reason

  7  for the discrepancy or make payment to the agency for any

  8  additional amount due.

  9         2.  If there is a discrepancy against the interest of

10  the manufacturer or labeler in the information provided by the

11  agency to the manufacturer or labeler regarding the

12  manufacturer's or labeler's rebate, the manufacturer or

13  labeler, at the manufacturer's or labeler's expense, may hire

14  a mutually agreed-upon independent auditor to verify the

15  accuracy of the data supplied to the agency. If a discrepancy

16  exists following the audit, the agency shall justify the

17  reason for the discrepancy or refund to the manufacturer any

18  excess payment made by the manufacturer or labeler.

19         3.  Following the procedures established in

20  subparagraph 1. or subparagraph 2., the agency or the

21  manufacturer or labeler may request a hearing. Supporting

22  documentation must accompany the request for a hearing.

23         (i)  By January 15 of each year, the agency shall

24  submit a report to the Legislature on the enrollment and

25  financial status of the Reduced-Cost Prescription Program.

26         (j)  In administering this section, the agency may

27  coordinate with other governmental programs and may take

28  actions to enhance efficiency, reduce the cost of prescription

29  drugs, and maximize the benefits of this and other

30  governmental programs, including providing the benefits of the

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    Florida Senate - 2001                                   SB 690
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  1  Reduced-Cost Prescription Program to the beneficiaries of

  2  other programs.

  3         (k)  The agency may adopt rules for administering this

  4  program.

  5         (l)  The agency may apply for any waiver of federal law

  6  or rule which is necessary to administer this program.

  7         Section 2.  (1)  The sum of $115,451,530 is

  8  appropriated from the Grants and Donations Trust Fund in the

  9  Agency for Health Care Administration for the purpose of

10  paying the administrative costs and meeting the cash-flow

11  requirements of the Reduced-Cost Prescription Program during

12  the 2001-2002 fiscal year.

13         (2)  The annual enrollment fee for participants in the

14  Reduced-Cost Prescription Program for the 2001-2002 fiscal

15  year is $36.

16         Section 3.  This act shall take effect July 1, 2001.

17

18            *****************************************

19                          SENATE SUMMARY

20    Creates the "Prescription Drug Fair Pricing Act."
      Establishes the Reduced-Cost Prescription Program within
21    the Agency for Health Care Administration. Requires drug
      manufacturers and labelers that sell prescription drugs
22    through state programs to pay certain rebates to those
      programs. Provides for the Secretary of Health Care
23    Administration to negotiate the rebate amounts. Requires
      that retail pharmacies provide a discount for drugs that
24    are covered under the program and sold to program
      participants. Provides for program eligibility for state
25    residents who do not have coverage for prescription drugs
      under any health insurance plan or public program.
26    Requires participants in the program to pay an annual
      enrollment fee, which may not exceed $50. Requires that
27    the agency reimburse retail pharmacies for discounted
      prices. Requires that the agency report to the
28    Legislature on the Reduced-Cost Prescription Program.
      (See bill for details.)
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