SB 225-FN - AS INTRODUCED
1999 SESSION
SENATE BILL 225-FN
AN ACT relative to a pharmaceutical program for low income individuals.
SPONSORS: Sen. Hollingworth, Dist 23; Sen. McCarley, Dist 6; Sen. J. King, Dist 18; Sen. Wheeler, Dist 21; Sen. Squires, Dist 12; Rep. O'Keefe, Rock 21
COMMITTEE: Public Institutions, Health and Human Services
This bill establishes a discount prescription drug program for persons with limited incomes, to be administered by the department of health and human services. The bill also establishes a fund to offset the cost of the pharmaceuticals, and an advisory council to oversee the administration of the program.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Explanation: Matter added to current law appears in bold italics.
Matter removed from current law appears [in brackets and struckthrough.]
Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
99-0984
05/09
STATE OF NEW HAMPSHIRE
In the Year of Our Lord One Thousand Nine Hundred and Ninety-Nine
AN ACT relative to a pharmaceutical program for low income individuals.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 New Chapter; Prescription Drug Cost Reduction and Coverage Program. Amend RSA by inserting after chapter 161-H the following new chapter:
CHAPTER 161-I
PRESCRIPTION DRUG COST REDUCTION
161-I:1 Definitions. In this chapter:
I. "Advisory council" means the outpatient prescription drug advisory council established in RSA 161-I:16.
II. "Average manufacturer price" means, with respect to a covered outpatient prescription drug, the average price paid to the manufacturer for the drug in the United States by wholesalers for drugs distributed in the retail pharmacy class of trade, after deducting customary prompt payment discounts.
III. "Commissioner" means the commissioner of health and human services.
IV. "Covered outpatient prescription drug" means a product dispensed in the state of New Hampshire which is not provided as part of, or incident to, inpatient hospital services; which may only be dispensed by prescription; and which is approved by the Food and Drug Administration for both safety and efficacy or is approved by the Food and Drug Administration for safety but not efficacy when the commissioner has determined there is a compelling medical need for its use and no safe and effective substitute exists, including:
(a) A biological product that may only be dispensed upon prescription.
(b) Insulin certified under 21 U.S.C. § 356.
(c) A drug for which a prescription is not required but which has been dispensed by prescription.
(d) Infant formula, whether milk or soy-based, or its equivalent.
(e) Oral rehydration fluids or chemicals.
V. "Innovator multiple source drug" means a covered outpatient prescription drug which was originally marketed under an original new drug application approved by the Food and Drug Administration and for which there are 2 or more drug products sold in the state rated as therapeutically and pharmaceutically equivalent by the Food and Drug Administration.
VI. "Manufacturer" means:
(a) Any entity engaged in the production, preparation, propagation, compounding, conversion or processing of covered outpatient prescription drug products, either directly or indirectly by extraction from substances of natural origin, or independently by means of chemical synthesis or by a combination of extraction and chemical synthesis; or
(b) The packaging, repackaging, labeling, re-labeling, or distribution of covered outpatient prescription drug products; provided, however, that such term shall not include a wholesale distributor of drugs or a retail pharmacy licensed under New Hampshire law.
VII. "Single source drug" means a covered outpatient prescription drug which is produced or distributed under an original new drug application approved by the Food and Drug Administration, including a drug product marketed by any cross-licensed producers or distributors operating under the new drug application.
VIII. "Trust" means the outpatient prescription drug trust fund established in RSA 161-I:5.
161-I:2 Outpatient Prescription Drug Cost Reduction and Coverage Expansion Program.
I. There shall be established within the department of health and human services a program called the outpatient prescription drug cost reduction and coverage expansion program, hereinafter the program, under the supervision and control of the commissioner, in consultation with and with the approval of the advisory council established in this chapter. The commissioner shall be the executive and administrative head of the program and shall be responsible for administering the program and the outpatient prescription drug trust fund, hereinafter the trust.
II. The commissioner shall:
(a) Adopt rules pursuant to RSA 541-A for the administration of the program.
(b) Appoint all such employees as may be necessary to carry out the purposes of the program, subject to the availability of funds in the trust.
(c) Employ such consultants as the commissioner may deem necessary or suitable for the effective administration and performance of the program, subject to the approval of the advisory council and the availability of funds in the trust.
III.(a) The program shall seek to obtain the best prices and widest coverage for all New Hampshire patients requiring covered outpatient prescription drugs with the least administrative and regulatory burden on manufacturers and distributors and on other state agencies.
(b) The commissioner shall, on behalf of all such patients, enter into an agreement with each manufacturer of a covered outpatient prescription drug to secure the largest possible discounts and rebates for these products within 6 months of the effective date of this chapter.
(c) The commissioner shall, in consultation with and with the approval of the advisory council, develop a pharmaceutical assistance program to provide maximum coverage for covered outpatient prescription drugs to as many as possible of such patients lacking adequate coverage and with incomes of up to and including 400 percent of the state level of poverty or who spend 3 percent or more of their gross incomes on covered outpatient prescription drugs, subject to the availability of funds in the trust.
(d) Nothing in this section shall prevent the commissioner from developing, in consultation with and with the approval of the advisory council, a system for reimbursing any pharmacist who provides covered outpatient prescription drugs for services not currently required by law that are consistent with standard pharmacy practice and consistent with providing pharmaceutical care, including, but not limited to, drug use review, management of drug therapy, case management of patients who are identified as at high risk for potential medication-related problems and management of patient compliance, to the extent such services further the purpose of this chapter.
(e) The commissioner shall annually, in consultation with and with the approval of the advisory council, develop a budget and spending plan for the trust to cover the program's costs and the expenses of the advisory council.
(f) The commissioner shall annually, in consultation with and with the approval of the advisory council, adopt eligibility standards that reflect projected availability of funds in the trust, giving highest priority to such patients with the least purchasing power based on a combination of income and alternative coverage. Such eligibility standards shall ensure that no more than 10 percent of the income received by the trust in the prior 12 months shall be retained by the trust unless the commissioner, with the approval of the advisory council, determines additional income shall be set aside for anti-recessionary contingencies. The eligibility standards established pursuant to this subparagraph shall not give rise to enforceable legal rights in any party or an enforceable entitlement to the services funded under this chapter, and nothing shall be construed as giving rise to such legal rights or such enforceable entitlement.
(g) The program shall ensure that such patients are made aware of applicable eligibility standards and procedures for program participation to the maximum extent feasible, subject to the availability of administrative funds in the trust.
(h) The program shall annually survey covered outpatient prescription drug prices with samples of adequate size and composition for prescription medications and of dispensers of covered outpatient prescription drugs to determine the program's effect on the average retail price with a standard error of less than 3 percent, subject to the availability of funding from the trust.
(i) The program shall gather and publicize outpatient prescription retail drug prices in New Hampshire and compare them to other states; classes of retail purchasers, including but not limited to independent pharmacies, chain pharmacies and health maintenance organizations; and countries, including but not limited to Canada, the United Kingdom and Australia.
(j) The program is hereby authorized, consistent with existing law and subject to approval by the advisory committee, to establish its own policies and seek from any official or agency of the state, such information and assistance as is necessary to carry out its functions and duties. All state officials and agencies are hereby directed to supply such information and assistance to the maximum extent consistent with law.
161-I:3 Requirement for a Discount and Rebate Program.
I. In order for a covered outpatient drug to be dispensed in the state, the manufacturer shall have entered into and have in effect an agreement with the commissioner, on behalf of patients requiring covered outpatient prescriptions. Such an agreement shall become effective the first day of the calendar quarter that begins 60 days after the date the agreement is entered into; provided, however, that this shall not apply to the dispensing of a covered outpatient prescription drug if the commissioner determines:
(a) The drug's availability is essential to the health of the state's citizens, and such drug has been given a rating of A-1 by the Food and Drug Administration; or
(b) The commissioner determines that in the first calendar quarter after the effective date of this chapter there are extenuating circumstances; or
(c) A discount or rebate agreement already exists between a manufacturer and an entity that prevents the commissioner from negotiating a discount or rebate agreement as required by this paragraph.
II. Nothing in this section shall be interpreted to:
(a) Permit dispensing of a covered outpatient prescription drug unless there is a rebate and discount agreement in effect for that specific drug, unless otherwise prohibited by state or federal law.
(b) Prevent the commissioner from entering into an agreement with a manufacturer for specific covered outpatient prescription drugs that are not subject to an existing agreement even though a discount or rebate agreement for other such covered drugs may exist between the manufacturer and another entity.
(c) Prevent the commissioner from entering into a discount agreement with a manufacturer for covered outpatient prescription drugs when there is an existing rebate agreement with said manufacturer.
(d) Prevent the commissioner from entering into a rebate agreement with a manufacturer for covered outpatient prescription drugs when there is an existing discount agreement with said manufacturer.
(e) Prevent any private or public entity from voluntarily participating in the discount and rebate program established under this act to the extent consistent with law.
III. All rebates negotiated under such agreement shall be paid to the commissioner in accordance with procedures prescribed by the commissioner. The receipts from such rebates shall not be deposited in the general fund, but shall be dedicated, through the state treasurer as trustee, to the outpatient prescription drug trust fund established in RSA 161-I:15. The commissioner is hereby authorized and required to seek whatever waivers of federal or state law as may be required to obtain the best combination of discounts and rebates possible on behalf of all patients needing outpatient prescription drugs in New Hampshire.
161-I:4 Effect on Existing Agreements.
I. A discount agreement in effect on January 1, 2000 between a manufacturer and a private entity, shall for the initial agreement period be considered to be a discount agreement meeting the requirements of RSA 161-I:5 when the manufacturer reports to the commissioner the terms of such agreement and all discounts allowed pursuant to said agreement following January 1, 2000.
II. A rebate agreement in effect on January 1, 2000 between a manufacturer and a private entity, shall for the initial agreement period be considered to be a rebate agreement meeting the requirements of RSA 161-I:5 when the manufacturer reports to the commissioner the term of such agreement and all rebates credited pursuant to said agreement following January 1, 2000.
III. For the purposes of this section, "initial agreement period" means the term of a discount or rebate agreement in effect on or before January 1, 2000, excluding renewals or extensions. The commissioner shall interpret this term as narrowly as possible consistent with law to enter into discount and rebate agreements with manufacturers as early as possible.
IV. Nothing in this section shall be interpreted to permit dispensing of a specific outpatient prescription drug that is not subject to both a discount and a rebate agreement or to prevent the commissioner from entering into discount or rebate agreements that do not conflict with the terms of existing discount or rebate agreements.
Model Agreement
161-I:5 Model Discount and Rebate Program. The commissioner shall develop a model agreement, in consultation with and subject to the approval of the advisory council, for negotiating discounts with manufacturers of covered outpatient prescription drugs dispensed after the effective date of this chapter. Said model agreement shall include, but not be limited to, the following provisions:
I.(a) For single source and innovator multiple source drugs, infant formula and rehydration fluids or chemicals, a minimum rebate of 20 percent discount off the average manufacturers price per unit of dosage dispensed in New Hampshire.
(b) For other covered outpatient prescription drugs, a minimum 14 percent discount off the average manufacturers price per unit of dosage dispensed in New Hampshire. All savings from such discounts shall be passed through to the retail level of business.
II. For single source and innovator multiple source drugs, infant formula and rehydration fluids or chemicals, a minimum rebate of 14 percent of the average manufacturer's price per unit of dosage times the units of dosage dispensed in New Hampshire.
III. For all covered outpatient prescription drugs, an additional rebate to adjust for:
(a) Manufacturer price increases exceeding inflation, as measured by the national urban consumer price index for all goods and services.
(b) The number of dosage units dispensed in New Hampshire since the beginning of the first calendar year prior to the effective date of this chapter.
(c) Changes in volume over time.
IV. Each manufacturer of a covered outpatient prescription drug shall pay the rebates as calculated pursuant to paragraphs I, II and III to the commissioner not later than 30 days after receipt of the information provided by the state under RSA 161-I:7.
V. Each manufacturer of covered outpatient prescription drugs shall guarantee to offer, to each wholesaler or retailer (or other purchaser representing a group of such wholesalers or retailers) that purchases such drugs on substantially the same terms (including such terms as prompt payment, cash payment, volume purchase, single-site delivery, the use of formularies by purchasers, and any other terms effectively reducing the manufacturer's costs) as any other purchaser (including any institutional purchaser) the same price for such drugs as is offered to such other purchaser; provided, however, that terms offered to the Department of Veteran Affairs, the Department of Defense or any other public program shall be excluded in determining a manufacturer's compliance.
161-I:6 State Reporting Requirements. The program shall ensure timely reporting of information needed by each manufacturer to calculate required discounts and rebates, including information on total units of dosage for each covered prescription drug dispensed in New Hampshire after January 1, 2000 and an invoice for rebates due.
161-I:7 Manufacturer Reporting Requirements. Manufacturers shall ensure timely reporting of any information required by the program for calculating discounts and rebates, including average manufacturers prices and information on total units of dosage for each covered prescription drug dispensed in New Hampshire after January 1, 2000.
161-I:8 Term. An agreement shall be effective for an initial period of not less than one year and shall be automatically renewed for a period of not less than one year with an option for the commissioner to negotiate higher discounts and rebates.
161-I:9 Termination. A discount and rebate agreement between the commissioner and a manufacturer of a covered outpatient prescription drug may be terminated by:
I. The commissioner for violation of the agreement or other good cause shown following 60 days notice to the manufacturer and the opportunity for a hearing, if requested by the manufacturer, or
II. By the manufacturer for any reason, effective 60 days after the commissioner receives notice.
161-I:10 Effect of Termination.
I. Any manufacturer terminated pursuant to RSA 161-I:9 shall be prohibited from reentry into a discount and rebate agreement with the commissioner for not less than 90 days, unless the commissioner finds good cause for earlier reinstatement of such an agreement.
II. Any termination under RSA 161-I:9 shall have no effect on discounts applicable and rebates due before the effective date of the termination.
161-I:11 Other Provisions. The commissioner, with the approval of the advisory council, shall include whatever other provisions are deemed suitable and necessary to accomplish the objectives of the program. In developing the model agreement, the commissioner and the advisory council shall consider existing pharmaceutical purchasing or assistance programs, including, but not limited to, those operated by Medicaid, the Department of Veteran Affairs, the Department of Defense, the Public Health Service, the state of Minnesota and the Canadian provinces.
161-I:12 Effect of Model Agreement. Nothing in RSA 161-I:7 shall be interpreted as precluding the commissioner from:
I. Entering into agreements that would provide greater discounts or larger rebates than the minimums established in RSA 161-I:5; or
II. Contracting with a purchasing agent to obtain covered outpatient prescription drugs at deeper discounts than required under RSA 161-I:5 as long as the requirements of all other provisions of this chapter are met.
161-I:13 Confidentiality. Notwithstanding any other provision of law, any information disclosed by a manufacturer under an agreement entered into pursuant to RSA 161-I:3 or any information concerning discount or rebate amounts disclosed by manufacturers or other parties pursuant to RSA 161-I:7 is confidential and shall not be disclosed by the commissioner, any member of the advisory council, or any state employee or contractor in a form which discloses:
I. The identity of a specific manufacturer, wholesaler, retailer or consumer of covered outpatient prescription drugs;
II. Prices charged or reimbursed by such manufacturer, wholesaler, retailer or consumer;
III. Discounts allowed by such manufacturer, wholesaler, retailer or consumer; or
IV. Rebates credited by such manufacturer, wholesaler, retailer or consumer.
161-I:14 Penalties. False reporting of information required pursuant to this subdivision shall be deemed unfair methods of competition and unfair or deceptive acts or practices.
Trust Fund
161-I:15 Outpatient Prescription Drug Trust Fund Established.
I. There is hereby established an outpatient prescription drug trust fund, which shall be administered and expended by the program without further appropriation. The fund shall consist of all rebates paid to the commissioner; all property and securities acquired by and through the use of moneys belonging to the trust fund and all interest thereon; less payments therefrom for the purposes of the program. All interest earned on amounts in the trust fund shall be deposited or retained in the trust fund. The commissioner shall from time to time requisition from said trust fund such amounts as the commissioner deems necessary to meet the current obligations of the program for the purposes of said trust fund and estimated obligations of the program for a reasonable future period.
II. Amounts credited to the outpatient prescription drug trust fund shall be used for the following purposes:
(a) To fund the drug assistance program established under RSA 161-I:2 for the benefit of patients purchasing covered outpatient prescription drugs filled and dispensed in New Hampshire, who have incomes up to and including 400 percent of the state level of poverty or who spend more than 3 percent of their gross income on covered outpatient prescription drugs, subject to availability of funds in the trust. The amount payable by the trust for a covered outpatient prescription drug dispensed to an individual during a calendar year shall be equal to the greater of the statewide mean or the statewide median of actual net payments received for each covered outpatient prescription drug. For the purposes of this subparagraph, the phrase "actual net payments received" means actual payments received by retailers from patients and third parties, if any, less any discounts or rebates received, provided however, that discounts and rebates offered to the Department of Veterans Affairs, the Department of Defense or any other public program shall not be included in calculating actual net payments received.
(b) To pay for services performed by a pharmacist that are not currently required by law but that are consistent with standard pharmacy practice and that further the purposes of the drug assistance program established in RSA 161-I:2 to the extent deemed useful by the commissioner with the approval of the advisory council, provided, however, that no more than 14 percent of trust income earned in any fiscal year shall be used for this purpose.
(c) To pay administrative costs of the program from trust income, provided, however, that no more than 5 percent of trust income earned in any fiscal year shall be used for this purpose.
(d) To pay administrative costs of the advisory council from trust income, provided, however, that no more than one percent of trust income earned in any fiscal year shall be used for this purpose.
(e) The commissioner may, with the approval of 2/3 of the members of the advisory council, change the spending limits imposed under subparagraphs (a) and (b) following a finding that actual experience with the program warrants such changes.
Advisory Council
161-I:16 Outpatient Prescription Drug Advisory Council Established.
I. There is hereby established an outpatient prescription drug advisory council. Such council shall consist of 10 members appointed by the commissioner, 3 of whom shall represent statewide organizations whose primary purpose is advocating universal health care, 2 of whom shall represent organizations providing legal services to low income clients, one of whom shall represent an organization of New Hampshire senior citizens, one of whom shall represent the independent retail pharmacies, one of whom shall represent the chain retail pharmacies, one of whom shall represent prescription drug manufacturers and the commissioner, or his designee, who shall serve ex officio, as chair. Each member shall serve a term of 5 years; provided, however, that in making the initial appointments, 3 members shall serve for 3-year terms, 3 members shall serve 4-year terms and 3 members shall serve 5-year terms. The advisory council shall meet monthly unless 6 of its members determine that fewer meetings per year are required to fulfill its duties.
161-I:17 Powers; Duties.
I. The advisory council may hire one staff member who shall have complete access to all information relevant to the operation and administration of the program; and such consultants as it may from time to time require, subject to existing law and the availability of funds from the trust.
II. The advisory council shall be consulted and shall give final approval to:
(a) Policies and regulations proposed by the commissioner, including but not limited to eligibility standards, required for the administration and operation of the program.
(b) Trust budgets and spending plans.
(c) Any other matter specifically referred to in this chapter.
III. The advisory council shall submit an annual report to the governor and the commissioner assessing, at a minimum, the operation and administration of the program; the cost savings to patients requiring covered outpatient prescription drugs; and the expansion of coverage by the trust, making whatever recommendations it deems appropriate to further the purposes of the program.
Miscellaneous
161-I:18 Construction. Nothing in this chapter shall be construed to require any person to enter into any agreement that would conflict with existing federal or state law or that would constitute a taking under state or federal law.
2 Effective Date. This act shall take effect 60 days after its passage.
LBAO
99-0984
2/24/99
SB 225-FN - FISCAL NOTE
AN ACT relative to a pharmaceutical program for low income individuals.
FISCAL IMPACT:
The Office of Legislative Budget Assistant is unable to complete a fiscal note for this bill as it is awaiting information from an agency.