H. B. 4093
(By Delegates Mezzatesta, Williams,
Martin, Stemple and Hrutkay)
[Introduced
January 18, 2002
; referred to the
Committee on Government Organization then Finance.]
A BILL to amend chapter sixteen of the code of West Virginia, one
thousand nine hundred thirty-one, as amended, by adding
thereto a new article, designated article twenty-nine-c,
relating to the "prescription drug price reduction act";
providing a short title and designating the purpose of the
act; setting forth findings, intent and purpose for the
legislation; requirements related to appointments to the
prescription drug advisory commission; the calling of the
first meeting of the commission; creation of the "prescription
drug price reduction fund"; setting forth purposes of the
fund; setting forth sources for the fund to be funded;
providing the secretary of health and human resources may
transfer moneys from the fund to elderly low-cost drug programs established or maintained in this state; the
establishment of and appointment mechanism for, the
prescription drug price reduction advisory commission;
requiring the department of health and human resources to
propose legislative rules designed to establish procedures for
determining maximum retail pricing for prescription drugs;
requiring determinations by health and human resources
regarding prescription drug prices; requiring secretary of
health and human resources with advice of commission to
establish maximum pricing for prescription drugs; providing
for an appeal procedure for retailers of prescription drugs;
providing that violations of article constitute violations
under West Virginia Unfair Trade Practices Act; establishment
of West Virginia Rx program; indicating that program is
designed to utilize manufacturer rebates and pharmacy
discounts and providing that the state serves as a pharmacy
benefit manager under the program and that department of
health and human resources administers the program; setting
forth program goals; providing for certain definitions;
requiring certain drug manufacturers to enter rebate
agreements with the state; providing for how rebate amounts are negotiated; requiring participating retail pharmacies to
offer discount prices on prescriptions to qualified residents;
requiring secretary of health and human resources to establish
discounted prices for drugs covered by rebate agreements;
requiring board of pharmacy to propose legislative rules
requiring disclosure of savings under Rx program; prohibiting
department of health and human resources from imposing
transaction charges under Rx program; requiring retail
pharmacy to submit claims to department to verify amount
charged; requiring department to reimburse pharmacies for
discounted prices provided to qualified residents; requiring
prescription by legislative rules of professional fees;
requiring department to collect utilization data; requiring
department to protect confidentiality of certain information;
providing that the names of nonparticipating manufacturers and
labelers are public information and that the department shall
impose prior authorization requirements on such
nonparticipating entities; providing for a mechanism to
resolve rebate amount discrepancies; requiring the department
to make an annual summary report; prescribing obligations of
the department under the Rx program; authorizing the department to contract with third parties; requiring the
department to administer the program and related programs
within perimeters designed to reduce costs and enhance
efficiency; requiring department to propose rules; authorizing
the department to seek waivers; providing that profiteering in
prescription drugs is unlawful; providing for a right of
action for injuries caused by a violation of this article;
providing for civil violations; providing that a violation of
this article is an unfair trade violation; authorizing the
attorney general to investigate suspected violations; setting
forth provisions for entering into agreements with third
parties; prohibiting payment to manufacturers that don?t enter
rebate agreements; setting forth a schedule for rebate
agreements; setting forth a participation requirement; and,
requiring secretary of health and human resources to propose
rules for medicaid program requiring additional prior
authorization for dispensing drugs from manufacturers and
labelers who don?t enter into rebate agreements.
Be it enacted by the Legislature of West Virginia:
That chapter sixteen of the code of West Virginia, one
thousand nine hundred thirty-one, as amended, be amended by adding
thereto a new article, designated article twenty-nine-c, to read as follows:
ARTICLE 29C. PRESCRIPTION DRUG PRICE REDUCTION ACT.
§16-29C-1. Short title; purpose.
This article may be known and cited as the "Prescription Drug
Price Reduction Act." The Legislature finds that affordability is
critical in providing access to prescription drugs for West
Virginia residents. This article is enacted by the Legislature as
a positive measure to make prescription drugs more affordable for
qualified West Virginia residents, thereby increasing the overall
health of West Virginia residents, promoting healthy communities
and protecting the public health and welfare of West Virginia
residents.
§16-29C-2. Findings; intent; purpose.
(a) The Legislature makes the following findings:
(1) Pharmaceutical companies are charging the citizens of West
Virginia excessive prices for prescription drugs, denying West
Virginia citizens access to medically necessary health care and
thereby threatening their health and safety. Many West Virginia
citizens are admitted to or treated at hospitals each year because
they can not afford the drugs prescribed for them that could have
prevented the need for hospitalization. Many others must enter
expensive institutional care settings because they cannot afford their necessary prescription drugs that could have supported them
outside of an institution. All West Virginia citizens are
threatened by the possibility that when they need medically
necessary prescription drugs most they may be unable to afford
their doctor?s recommended treatment;
(2) Citizens of West Virginia and other Americans pay the
highest prices in the world for prescription drugs, prices that
result in extremely high profits for pharmaceutical companies;
(3) Prescription drug costs represent the fastest growing item
in health care and are a driving force in rapidly increasing
hospital costs and insurance rates;
(4) Excessive pricing for prescription drugs threatens West
Virginia?s ability to assist with the health care costs of West
Virginia citizens, undermines the financial capacity of West
Virginia communities to meet the educational needs of West Virginia
children, hurts the ability of the West Virginia business community
to provide health insurance coverage to West Virginia?s work force
and
has a negative effect on West Virginia?s economy. The
Legislature finds that affordability is critical in providing
access to prescription drugs for West Virginia residents.
(b) It is the intent of the Legislature to provide access for all West Virginia citizens to medically necessary prescription
drugs at the lowest possible prices.
(c) This law is enacted by the Legislature as a positive
measure to make prescription drugs more affordable for West
Virginia residents, thereby increasing the overall health of our
families, benefitting employers and employees and the fiscal
strength of our society, promoting healthy communities and
increasing the public health and welfare.
§16-29C-3. Appointments; first meeting of prescription drug
advisory commission.
All appointments must be completed no later than thirty days
following the effective date of this article. The appointing
authorities, as identified in section five of this article, shall
notify each other in writing upon making their appointments. The
governor shall call the first meeting of the commission within
thirty days after notification that appointments have been
completed. At the first meeting of the commission, the members
shall select a chair from among the members.
§16-29C-4. Creation of prescription drug price reduction fund.
(a) There is hereby created in the state treasury a special
revolving fund known as the prescription drug price reduction fund.
All moneys deposited or accrued in this fund shall be used exclusively:
(1) To reduce or eliminate the costs associated with the
procurement of prescription drugs by and for citizens of this
state;
(2) To cover administrative costs incurred by the department
of health and human resources associated with the administration
and furtherance of its obligations as provided for under the
provisions of this article:
Provided, That no expenditures may be
made to cover administrative costs for any fiscal year after two
thousand five, except as appropriated by the Legislature;
(3) To receive revenue from manufacturers and labelers who pay
rebates as provided in section twelve of this article and any
appropriations or allocations specifically designated for the fund;
(4) To reimburse retail pharmacies for discounted prices
provided to qualified residents pursuant to section fourteen of
this article;
(5) To reimburse the department of health and human resources
for contracted services,
administrative and associated computer
costs, professional fees paid to participating retail pharmacies
and other reasonable program costs; and
(6) To benefit the prescription drug price reduction program.
(b) Moneys from the following sources may be placed into the
fund:
(1) All public funds transferred by any public agency to the
department of health and human resources prescription drug price
reduction program for deposit in the fund as contemplated or
permitted by applicable laws;
(2) All private funds contributed, donated or bequeathed by
corporations, individuals or other entities to the fund as
contemplated and permitted by applicable laws;
(3) Interest which accrued on amounts in the fund from sources
identified in subdivisions (1) and (2) of this subsection; and
(4) Any federal financial participation matching the amounts
referred to in subdivisions (1), (2) and (3) of this subsection, in
accordance with applicable federal law.
(c) Any balance remaining in the prescription drug price
reduction fund at the end of any state fiscal year shall not revert
to the state treasury but shall remain in this fund and shall be
used only in a manner consistent with this article.
(d) Moneys received into the fund shall not be counted or
credited as part of the legislative general appropriation to the
state prescription price reduction program.
(e) The fund shall be administered by the department of health
and human resources. Moneys shall be disbursed from the fund on a
quarterly basis. The secretary of the department shall implement
the provisions of this article prior to the receipt of any
transfer, contribution, donation or bequest from any public or
private source.
(f) Except for the payment of administrative costs as provided
for in this section, appropriation from this fund for any other
purposes is void and prohibited.
(g) Notwithstanding any provision of law to the contrary,
surplus funds may also be transferred to any elderly low-cost drug
program established or maintained in this state with the approval
of the secretary of health and human resources.
§16-29C-5. Prescription drug advisory commission.
(a) The prescription drug advisory commission, referred to in
this article as the "commission," is established to review access
to and the pricing of prescription drugs for residents of the
state, to advise the secretary of the department of health and
human resources on prescription drug pricing and to provide
periodic reports to the secretary of health and human resources,
the governor and the Legislature.
(b) The commission consists of the following twelve members:
(1) Three members of the public, appointed by the president of
the Senate, one of whom must represent the interests of seniors.
Of the initial appointees, one must be appointed for a two-year
term and two for three-year terms;
(2) Three members of the public, appointed by the speaker of
the House, one of whom must represent the interests of seniors. Of
the initial appointees, one must be appointed for a two-year term
and two for three-year terms;
(3) Two members of the health care community who are
authorized by the laws of this state to prescribe drugs, appointed
by the governor. Of the initial appointees, one must be appointed
for a two-year term and one for a three-year term;
(4) Two pharmacists, appointed by the governor. Of the
initial appointees, one must be appointed for a two-year term and
one for a three-year term. To be appointed to and remain on the
commission, each pharmacist must:
(A) Be licensed to practice pharmacy and be engaged in the
practice of retail pharmacy in this state;
(B) Have at least five years of experience in this state as a
licensed pharmacist; and
(C) Be a resident of this state.
(5) One member of the West Virginia hospital finance
authority, to be designated by the governor, and the secretary of
the department of health and human resources, or his or her
designee, who shall serve as ex officio, nonvoting members.
(c) With the exception of the initial appointees, all members
of the commission serve for terms of three years and may be
reappointed. With the exception of the pharmacist members, if the
profession or qualifications of a commission member change during
the term of commission membership, the member may continue to
complete the term for which the appointment was made.
(d) The commission shall meet at least four times per year.
The members shall select a chair from among the members.
Additional meetings may be called by the chair.
(e) The duties of the commission include the following:
(1) To review access to prescription drugs for residents of
the state, including, but not limited to, pricing and affordability
information;
(2) To advise the secretary of the department of health and
human resources on access to prescription drugs and prescription
drug prices, including, but not limited to, insurance and third party payments for prescription drugs, the need for maximum retail
prices and, if maximum retail prices are established, the
procedures for adoption and periodic review of maximum retail
prices,
the procedures for establishing maximum retail prices for
new prescription drugs and for reviewing maximum retail prices of
selected drugs and the procedures for phasing out or terminating
maximum retail prices;
(3) To advise the secretary of the department of health and
human resources relative to the proposal of legislative rules
necessary to implement this article; and
(4) To report to the secretary of the department of health and
human resources, the Legislature and the governor by the first day
of April, two thousand four, and annually thereafter by the second
week in January, including in the report any recommendations for
action regarding access to and the pricing of prescription drugs.
(f) The department shall provide staffing for the commission.
(g) Public members not otherwise compensated by their
employers or other entities whom they represent are entitled to
receive reimbursement of necessary expenses and a per diem
allowance equal to the legislative per diem allowance for their
attendance at authorized meetings of the commission.
(h) In performing its duties, the commission shall work with
the department of health and human resources and the West Virginia
board of pharmacy.
S16-29C-6. Emergency drug pricing.
In order to achieve the public health purposes provided in
this article, maximum retail prices for prescription drugs sold in
West Virginia may be established pursuant to this section.
(a) The following provisions apply to determinations regarding
maximum retail prices for prescription drugs and to the procedures
for establishing those prices:
(1) By the first day of July, two thousand four, the
department of health and human resources shall propose legislative
rules in accordance with article three, chapter twenty-nine-a of
this code, establishing the procedures for adoption and periodic
review of maximum retail prices, the procedures for establishing
maximum retail prices for new prescription drugs and for reviewing
maximum retail prices of selected drugs and the procedures for
phasing out or terminating maximum retail prices. Prior to
proposing the legislative rules, the secretary of the department of
health and human resources shall consult with and consider the
recommendations of the commission regarding the rules;
(2) By the fifth day of January two thousand five, the
secretary of health and human resources shall determine whether the
cost of prescription drugs provided to qualified residents under
the West Virginia Rx program pursuant to this article is reasonably
comparable to the lowest cost paid for the same drugs for delivery
or dispensation in the state. In making this determination the
following provisions apply:
(A) The secretary of the department of health and human
resources shall review prescription drug use in the Medicaid
program using data from the most recent six-month period for which
data is available;
(B) Using the data reviewed in subparagraph (A), the secretary
of health and human resources shall determine the one hundred drugs
for which the most units were provided and the one hundred drugs
for which the total cost was the highest;
(C) For each prescription drug listed in subparagraph (B) of
this subdivision, the secretary of the department of health and
human resources shall determine the cost for each drug for
qualified residents provided those drugs under the West Virginia Rx
program on a certain date. The average cost for each such drug
shall be calculated;
(D) For each prescription drug listed, pursuant to
subparagraph (B) of this subsection, the secretary of the
department of health and human resources shall determine the lowest
cost for each drug paid by any purchaser on the date that is used,
pursuant to the provisions of subparagraph (C) of this subdivision,
for delivery or dispensation in the state, taking into
consideration the federal supply schedule and prices paid by
pharmaceutical benefits managers and by large purchasers and
excluding drugs purchased through the West Virginia Rx program.
The average cost for each such drug shall be calculated;
(3) If the average cost for one or more prescription drugs is
not reasonably comparable to the average lowest cost for the same
drug or drugs as determined pursuant to the provisions of
subparagraph (D) of this subdivision, the secretary of the
department of health and human resources shall establish maximum
retail prices for any or all prescription drugs sold in the state.
Maximum prescription drug prices established under this
subparagraph must take effect the first day of July, two thousand
five;
(4) In establishing maximum retail prices, the secretary of
the department of health and human resources shall consider the advice of the commission and shall follow procedures set forth by
existing legislative rules applicable to the department.
(b) In making a determination the secretary of the department
of health and human resources may rely on pricing information on a
selected number of prescription drugs if that list is
representative of the prescription drug needs of the residents of
the state and is made public as part of the process of establishing
maximum retail prices.
(c) The secretary of the department of health and human
resources may take actions that he or she determines necessary if
there is a severe limitation or shortage of or lack of access to
prescription drugs in the state that could threaten or endanger the
public health or welfare.
§16-29C-7. Appeals.
A retailer of prescription drugs may appeal the maximum retail
price of a prescription drug established pursuant to this article
in accordance with the West Virginia Administrative Procedures Act
contained in article five, chapter twenty-nine-a of this code.
§16-29C-8. Enforcement.
A violation consisting of the maximum retail prices
established under this section is a violation of the West Virginia
Unfair Trade Practices Act.
§16-29C-9. West Virginia Rx program established. Program to be
administered by secretary of health and human
resources.
The West Virginia Rx program, referred to in this article as
the "program," is established to reduce prescription drug prices
for residents of the state. The program is designed for the state
to utilize manufacturer rebates and pharmacy discounts to reduce
prescription drug prices. In implementing the program, the state
shall serve as a pharmacy benefit manager in establishing rebates
and discounts on behalf of qualified residents.
The secretary of
health and human resources shall administer the program and
exercise the powers and jurisdiction associated with the
administration.
§16-29C-10. Program goals.
The Legislature finds that affordability is critical in
providing access to prescription drugs for West Virginia residents.
This article is enacted by the Legislature to enable the state to
act as a pharmacy benefit manager in order to make prescription
drugs more affordable for qualified West Virginia residents,
thereby increasing the overall health of West Virginia residents,
promoting healthy communities and protecting the public health and
welfare.
It is not the intention of the state to discourage employers from offering or paying for prescription drug benefits
for their employees or to replace employer-sponsored prescription
drug benefit plans that provide benefits comparable to those made
available to qualified West Virginia residents under this article.
§16-29C-ll. Definitions.
As used in this article, unless the context otherwise
indicates, the following terms have the following meanings:
(a)
"Average wholesale price" means the wholesale price
charged on a specific commodity that is assigned by the drug
manufacturer and is listed in a nationally recognized drug pricing
file.
(b) "Initial discounted price" means a price, that is less
than or equal to the average wholesale price, minus six percent,
plus any dispensing fee provided for under the provisions of any
applicable law.
(c) "Labeler" means an entity or person that receives
prescription drugs from a manufacturer or wholesaler and repackages
those drugs for later retail sale.
(d) "Participating retail pharmacy" or "retail pharmacy" means
a retail pharmacy located in this state, or another business
licensed to dispense prescription drugs in this state, that participates in the program and that provides discounted prices to
residents as provided in section fourteen of this article.
(e) "Pharmacy benefit manager" means an entity that procures
prescription drugs at a negotiated rate under a contract.
(f) "Qualified resident" means a resident of the state who has
obtained from the department of health and human resources, a West
Virginia Rx enrollment card.
(g) "Secondary discounted price" means a price that is equal
to or less than the initial discounted price minus the amount of
any rebate paid by the state to the participating retail pharmacy.
(h) "West Virginia Rx enrollment card" means a card issued to
persons determined to be qualified residents by the department of
health and human resources. The enrollment card shall entitle
qualified residents to the benefits of reduced prescription drug
pricing as provided and intended by the provisions of this article:
Provided, That the secretary of the department of health and human
resources shall propose legislative rules in accordance with
article five, chapter twenty-nine-a of this code that shall
prescribe criteria and eligibility requirements based on financial
and medical needs of applicants for the enrollment card.
§16-29C-12. Rebate agreement.
A drug manufacturer or labeler that sells prescription drugs
in this state pursuant to any state authorized program requiring
discounted prices or any other publicly supported pharmaceutical
assistance program shall enter into a rebate agreement with the
department for this program. The rebate agreement must require the
manufacturer or labeler to make rebate payments to the state each
calendar quarter or according to a schedule established by the
secretary of health and human resources.
§16-29C-13. Rebate amount.
(a) The secretary of health and human resources shall
negotiate the amount of the rebate required from a manufacturer or
labeler in accordance with this section.
(b)
The secretary of health and human resources shall take
into consideration the rebate calculated under the Medicaid rebate
program pursuant to 42 United States Code, Section 1396r-8, the
average wholesale price of prescription drugs and any other
information on prescription drug prices and price discounts.
(c) The secretary of health and human resources shall use his
or her best efforts to obtain an initial rebate amount equal to or
greater than the rebate calculated under the Medicaid program
pursuant to 42 United States Code, Section 1396r-8.
(d) With respect to any rebate, the secretary of the
department of health and human resources shall use his or her best
efforts to obtain an amount equal to or greater than the amount of
any discount, rebate or price reduction for prescription drugs
provided to the federal government.
§16-29C-14. Discounted prices for qualified residents.
(a) Any participating retail pharmacy that sells prescription
drugs covered by a rebate agreement pursuant to section twelve of
this article shall discount the retail price of those drugs sold to
qualified residents.
(b) The secretary of the department of health and human
resources shall establish discounted prices for drugs covered by a
rebate agreement and shall promote the use of efficacious and
reduced-cost drugs, taking into consideration reduced prices for
state and federally capped drug programs, differential dispensing
fees, administrative overhead and incentive payments.
(c) Beginning the first day of January, two thousand four, a
participating retail pharmacy shall offer the initial discounted
price.
(d) No later than the first day of October, two thousand four,
a participating retail pharmacy shall offer the secondary discounted price.
(e) In determining the amount of discounted prices, the
secretary of the department of health and human resources shall
consider an average of all rebates provided pursuant to section
twelve of this article, weighted by sales of drugs subject to these
rebates over the most recent twelve-month period for which the
information is available.
§16-29C-15. Operation of program.
(a) The requirements of this section apply to participating
retail pharmacies.
(b) The West Virginia board of pharmacy shall propose
legislative rules pursuant to article three, chapter twenty-nine-a
of this code, requiring disclosure by participating retail
pharmacies to qualified residents of the amount of savings provided
as a result of the program. The rules must consider and protect
information that is proprietary in nature.
(c) The secretary of the department of health and human
resources may not impose transaction charges under this program on
retail pharmacies that submit claims or receive payments under the
program.
(d) A participating retail pharmacy shall submit claims to the department to verify the amount charged to qualified residents
under sections twelve and thirteen of this article.
(e) On a weekly or biweekly basis, the department of health
and human resources must reimburse a participating retail pharmacy
for discounted prices provided to qualified residents under section
twelve of this article and for professional fees, which must be
prescribed by legislative rule, proposed pursuant to article three,
chapter twenty-nine-a of this code, by the secretary of health and
human resources. The amount of the initial professional fee must
be set at three dollars per prescription.
(f) The department of health and human resources shall collect
utilization data from the participating retail pharmacies
submitting claims necessary to calculate the mount of the rebate
from the manufacturer or labeler.
The department
shall protect
the
confidentiality of all information subject to confidentiality
protection under state or federal law, rule or regulation.
§16-29C-16. Action with regard to nonparticipating manufacturers
and labelers.
The names of manufacturers and labelers who do not enter into
rebate agreements pursuant to this article are public information.
The department shall impose prior authorization requirements in the
Medicaid program provided for under chapter nine of this code, as permitted by law, for the dispensing of prescription drugs provided
by those manufacturers and labelers.
§
16-29C-17. Discrepancies in rebate amounts.
(a) Discrepancies in rebate amounts must be resolved using the
process established in this section.
(b) If there is a discrepancy in the manufacturer?s or
labeler?s favor between the amount claimed by a pharmacy and the
amount rebated by the manufacturer or labeler, the department, at
the department?s expense, may hire a mutually agreed-upon
independent auditor. If a discrepancy still exists following the
audit, the manufacturer or labeler shall justify the reason for the
discrepancy or make payment to the department for any additional
amount due.
(c) If there is a discrepancy against the interest of the
manufacturer or labeler in the information provided by the
department to the manufacturer or labeler regarding the
manufacturer?s or labeler?s rebate, the manufacturer or labeler, at
the manufacturer?s or labeler?s expense, may hire a mutually
agreed-upon independent auditor to verify the accuracy of the data
supplied to the department. If a discrepancy still exists
following the audit, the department shall justify the reason for the discrepancy or refund to the manufacturer any excess payment
made by the manufacturer or labeler.
(d) Following the procedures established in this section,
either the department or the manufacturer or labeler may request an
administrative hearing pursuant to article five, chapter
twenty-nine-a of this code. Supporting documentation must
accompany the request for a hearing.
§16-29C-18. Annual summary report.
The department shall report the enrollment and financial
status of the program to the Legislature by the second week in
January each year.
§16-29C-19. Obligations of department.
The department shall establish simplified procedures for
determining eligibility and issuing West Virginia Rx enrollment
cards to qualified residents and shall undertake outreach efforts
to build public awareness of the program and maximize enrollment of
qualified residents. The department may adjust the requirements
and terms of the program to accommodate any new federally funded
prescription drug programs.
§
16-29C-20. Contracting.
The department may contract with a third party to administer any or all components of the program, including, but not limited
to, outreach, eligibility, claims, administration and rebate
recovery and redistribution.
§
16-29C-21. Medical assistance programs.
The department of health and human resources shall administer
the program and other medical and pharmaceutical assistance
programs, as provided for under this article, in a manner that is
advantageous to the programs and to the enrollees in those
programs. In implementing the requirements of this article the
department may coordinate the other programs and this program and
may take actions to enhance efficiency, reduce the cost of
prescription drugs and maximize the benefits to the programs and
enrollees, including providing the benefits of this program to
enrollees in other programs.
§16-29C-22. Rule making.
The department shall propose legislative rules in accordance
with article three, chapter twenty-nine-a of this code to implement
the provisions of this article.
§16-29C-23. Waivers.
The department may seek any waivers of federal law, rule or
regulation necessary to implement the provisions of this article.
§16-29C-24. Profiteering in prescription drugs.
(a) The Legislature finds that prescription drugs are a
necessity of life to many citizens of this state. Profiteering in
prescription drugs is unlawful and is subject to the provisions of
this article. The provisions of this article apply to
manufacturers, distributors and labelers of prescription drugs.
(b) As used in this article, unless the context otherwise
indicates, the following terms have the following meanings:
(1) "Labeler" means an entity or person that receives
prescription drugs from a manufacturer or wholesaler and repackages
those drugs for later retail sale.
(2) "Manufacturer" means a manufacturer of prescription drugs
and includes a subsidiary or affiliate of a manufacturer.
(c) A manufacturer, distributor or labeler of prescription
drugs engages in illegal profiteering if that manufacturer,
distributor or labeler:
(1) Exacts or demands an unconscionable price;
(2) Exacts or demands prices or terms that lead to any unjust
or unreasonable profit;
(3) Discriminates unreasonably against any person in the sale,
exchange, distribution or handling of prescription drugs dispensed or delivered in the state; or
(4) Intentionally prevents, limits, lessens or restricts the
sale or distribution of prescription drugs in this state in
retaliation for the provisions of this article.
§16-29C-25. Right of action and damages.
The secretary of the department of health and human resources,
with the aid of the state attorney general, may bring a civil
action in any circuit court where proper venue lies for injuries
sustained by any person, group of persons, the state or a political
subdivision of the state, when the injury was caused by a violation
of this article. There is a right to a jury trial in any action
brought in a circuit court under this section. If the secretary of
the department of health and human resources prevails, the
defendant shall pay three times the amount of damages and the costs
of suit, including necessary and reasonable investigative costs,
reasonable expert fees and reasonable attorney?s fees. For a
willful or repeated violation of this section, punitive damages may
be awarded. After deduction of the costs incurred in the
litigation, the damages shall be equitably distributed by the
secretary to all injured parties.
§16-29C-26. Civil violation.
Each violation of this section is a civil violation for which the secretary of the department of health and human resources, with
the aid of the state attorney general, may obtain, in addition to
other remedies, injunctive relief and a civil penalty in an amount
not to exceed one hundred thousand dollars, plus the costs of suit,
including necessary and reasonable investigative costs, reasonable
expert fees and reasonable attorney?s fees.
§16-29C-27. Unfair trade practice.
A violation of this article is also a violation of the West
Virginia Unfair Trade Practices Act.
§16-29C-28. Investigation by attorney general.
The attorney general, upon the attorney general?s own
initiative or upon petition of the secretary of the department of
health and human resources or of fifty or more residents of this
state, shall investigate suspected violations of this article. The
attorney general may require, by summons, the attendance and
testimony of witnesses and the production of books and papers
before the attorney general related to any such matter under
investigation. The summons must be served in the same manner as
summonses for witnesses in criminal cases, and all provisions of
law related to criminal cases apply to summonses issued under this
section so far as they are applicable. All investigations or
hearings under this section to which witnesses are summoned or called upon to testify or to produce books, records or
correspondence are public or private, at the choice of the person
summoned, and must be held in the county where the act to be
investigated is alleged to have been committed, or if the
investigation is on petition, it must be held in the county in
which the petitioners reside. A judge of the circuit court may by
order, upon application of the attorney general, compel the
attendance of witnesses, the production of books and papers,
including correspondence, and the giving of testimony before the
attorney general in the same manner and to the same extent as
before the circuit court. Any failure to obey such an order may be
punishable by that court pursuant to its civil powers of contempt.
§16-29C-29. Agreements with governments of other jurisdictions
and other entities.
The state, with the active concurrence of the governor,
president of the Senate and speaker of the House, may negotiate and
enter into purchasing alliances and regional strategies with
governments of other jurisdictions and with other public and
private entities for the purpose of reducing prescription drug
prices for residents of the state. Any purchasing alliance or
regional strategy which requires active participation by any
governmental entity of this state, shall first be ratified by a majority of both branches of the Legislature.
§16-29C-30. Drug rebate program.
(a) Effective the first day of May, two thousand five, payment
must be denied for drugs from manufacturers that do not enter into
a rebate agreement with the department for prescription drugs
included in the list of approved drugs under this program. Each
agreement must provide that the pharmaceutical manufacturer make
rebate payments for both the basic and supplemental components of
the program to the department according to the following schedule.
(b) For the quarters beginning the first day of October, two
thousand five, the rebate percentage is equal to the percentage
recommended by the federal Health Care Financing Administration of
the manufacturer?s wholesale price for the total number of dosage
units of each form and strength of a prescription drug that the
department reports as reimbursed to providers of prescription
drugs, provided payments are not due until thirty days following
the manufacturer?s receipt of utilization data supplied by the
department, including the number of dosage units reimbursed to
providers of prescription drugs during the period for which
payments are due.
(c) Beginning the first day of October, two thousand seven, the department shall seek to achieve an aggregate rebate amount
from all rebate agreements that is six percentage points higher
than that required by subsection (b) of this section, provided
rebates result in a net increase in the rebate revenue available to
the prescription drug price reduction program. In the event the
department is not able to achieve the rebate amount required by
this subsection without compromising the best interest of
recipients of the prescription drug price reduction program, it
shall report to the joint committee of the Legislature having
jurisdiction over health and human resource service matters and the
joint committee of the Legislature having jurisdiction over
appropriations and financial affairs in the first regular session
of the Legislature commencing after it is determined that the
requirements of this subsection are not attainable.
(d) Upon receipt of data from the department, the
pharmaceutical manufacturer shall calculate the quarterly payment.
If a discrepancy is discovered, the department may, at its expense,
hire a mutually agreed-upon independent auditor to verify the
pharmaceutical manufacturer's calculation. If a discrepancy is
discovered, the department shall justify its data or refund any excess payment to the pharmaceutical manufacturer. If the dispute
over the rebate amount is not resolved, a request for a hearing
with supporting documentation must be submitted to the secretary of
health and human resources in accordance with the provisions of
article five, chapter twenty-nine-a of this code. Failure to
resolve the dispute may be cause for terminating the drug rebate
agreement and denying payment to the pharmaceutical manufacturer
for any drugs.
(e) Any prescription drug of a manufacturer that does not
enter into an agreement is not reimbursable unless the department
determines the prescription drug is essential.
(f) All prescription drugs of a pharmaceutical manufacturer
that enters into an agreement pursuant to this section that appear
on the list of approved drugs under this program must be
immediately available and the cost of the drugs must be reimbursed
and is not subject to any restrictions or prior authorization
requirements, except as provided in this section. If the secretary
of the department of health and human resources establishes maximum
retail prices for prescription drugs pursuant to the provisions of
this article, the department shall propose legislative rules in
accordance with the provisions of article three, chapter twenty-nine-a of this code for the prescription drug price
reduction program requiring the use of a drug formulary and prior
authorization for the dispensing of certain drugs to be listed on
a formulary.
§16-29C-31. Participation requirement.
Beginning the first day of January, two thousand seven, all
manufacturers and labelers of drugs that participate in the
Medicaid program under this article shall participate in the drug
rebate program required by the provisions of this article. For the
purposes of this section, "labeler" means an entity or person that
receives prescription drugs from a manufacturer or wholesaler and
repackages those drugs for later retail sale.
§16-29C-32. Prior authorization in Medicaid program.
If the secretary of the department of health and human
resources establishes maximum retail prices for prescription drugs
pursuant to the requirements of this article, the department shall
propose legislative rules in accordance with the provisions of
article three, chapter twenty-nine-a of this code for the Medicaid
program provided for under chapter nine of this code requiring
additional prior authorization for the dispensing of drugs
determined to be priced above the established maximum retail
prices. The department shall, additionally, propose legislative rules in accordance with the provisions of article three, chapter
twenty-nine-a of this code for the Medicaid program provided for
under the provisions of chapter nine of this code, requiring
additional prior authorization for the dispensing of drugs provided
from manufacturers and labelers who do not enter into agreements
with the department. For the purposes of this section, "labeler"
means an entity or person.
NOTE: The purpose off this bill is to enact a new article on
prescription drug access. The bill contains provisions which
create the West Virginia Rx program to reduce prescription drug
prices for residents of the state. The program utilizes
manufacturer rebates and pharmacy discounts to reduce prescription
drug prices. The state will serve as a pharmacy benefit manager in
negotiating rebates and discounts on behalf of qualified residents.
The program depends on manufacturers and labelers of prescription
drugs to pay rebates to the state that are used to provide
discounted prices to qualifying West Virginia residents when they
purchase prescription drugs. It, further, establishes a fund to
receive revenue due to the program, to make payments to retail
pharmacies as required by the program and to pay for contracted
services, administrative costs and other program costs.
Further, the bill authorizes the Department of Health and
Human Resources to coordinate the West Virginia Rx program with
other medical and pharmaceutical assistance programs.
The bill describes the proposed legislation as the
"Prescription Drug Price Reduction Act." It establishes the
Prescription Drug Advisory Commission, a 12-member commission that
advises the secretary of health and human resources regarding
access to prescription drugs and prescription drug prices. The
commission advises the secretary of health and human resources on rule making regarding the procedures to be used in setting and
reviewing maximum retail prices for prescription drugs. The
commission is required to provide annual reports to the secretary
of health and human resources, the Governor and the Legislature.
The secretary of health and human resources is required to
undertake a process to determine the need for maximum retail prices
for prescription drugs. If the process results in a requirement
that maximum retail prices be established, those prices must take
effect by a date certain. An appeal mechanism is provided and also
a mechanism for addressing situations that may threaten or endanger
the public health or welfare. A violation of the maximum retail
prices is an unfair trade practice.
The bill also contains a prohibition on profiteering in
prescription drugs by manufacturers, their affiliates and
subsidiaries, distributors and labelers of prescription drugs.
Profiteering may be punished as a civil violation and may result in
an award of triple damages, attorney?s fees, punitive damages and
costs. A violation of the article is a violation of the West
Virginia Unfair Trade Practices Act.
It also authorizes the state to negotiate and enter into
purchasing alliances and regional strategies with governments and
public and private entities for the purpose of reducing
prescription drug prices for residents of the state.
It, further, includes statements of findings, intent and
purpose. It provides appropriations and allocations to fund the
activities and obligations involved in the provisions of the new
article.
If the secretary of health and human resources establishes
maximum retail prices for prescription drugs the bill directs the
secretary of health and human resources to establish a drug
formulary and prior authorization for dispensing drugs in the
elderly low-cost drug program. In the future, it requires
manufacturers and labelers of drugs that participate in the
Medicaid program to participate in the drug rebate program in the
elderly low-cost drug program. If the secretary of health and
human resources establishes maximum retail prices for prescription
drugs, the bill directs the secretary of health and human resources to require prior authorization for the dispensing of drugs in the
Medicaid program provided for under state law that would apply to
drugs that are priced above the established maximum retail prices.
It directs the department to require prior authorization for the
dispensing of drugs in the Medicaid program that are provided from
manufacturers and labelers who do not enter into rebate agreements
with the state under the West Virginia Rx program.
This article is new; therefore, strike-throughs and
underscoring have been omitted.
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