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Introduced Version Senate Bill 430 History

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sb430 intr
Senate Bill No. 430

(By Senators Tomblin, Mr. President, and Sprouse,

By Request of the Executive)

____________

[Introduced March 2, 2005; referred to the Committee

on Health and Human Resources; and then to the Committee on Finance.]

____________



A BILL to repeal §5-16-7b of the Code of West Virginia, 1931, as amended; to repeal §5-16C-1, §5-16C-2, §5-16C-3, §5-16C-4, §5-16C-5, §5-16C-6, §5-16C-7, §5-16C-8, §5-16C-9 and §5-16C-10 of said code; to repeal §5A-3-1a of said code; to repeal §5A-3C-1, §5A-3C-2, §5A-3C-3, §5A-3C-4, §5A-3C-5, §5A-3C-6, §5A-3C-7, §5A-3C-8, §5A-3C-9, §5A-3C-10, §5A-3C-11, §5A-3C-12, §5A-3C-13, §5A-3C-14, §5A-3C-15, §5A-3C-16 and §5A-3C-17 of said code; to amend said code by adding thereto a new article, designated §5-16D-1, §5-16D-2, §5-16D-3, §5-16D-4, §5-16D-5, §5-16D-6, §5-16D-7, §5-16D-8, §5-16D-9, §5-16D-10, §5-16D-11, §5-16D-12, §5-16D-13, §5-16D-14, §5-16D-15, §5-16D-16, §5-16D-17, §5-16D-18, §5-16D-19, §5-16D-20, §5-16D-21, §5-16D-22, §5-16D-23, §5-16D-24, §5-16D-25, §5-16D-26, §5-16D-27, §5-16D-28, §5-16D-29 and §5-16D-30; to amend and reenact §5F-2-2 of said code; and to amend and reenact §29-22-18a of said code, all relating generally to the creation of the Office of the Pharmaceutical Advocate; legislative findings; defining terms; powers and duties of the Office of the Pharmaceutical Advocate; creation of the cabinet-level position of the Pharmaceutical Advocate; qualifications and salary of the Pharmaceutical Advocate; powers and duties of the Pharmaceutical Advocate; creation of the Pharmaceutical Advisory Council; qualifications of Council members; powers and duties of the Council; reporting requirements of the Council, the Pharmaceutical Advocate and the Office of the Pharmaceutical Advocate; transferring powers and duties of the West Virginia Public Employees Insurance Agency to negotiate for and purchase pharmaceuticals to the Pharmaceutical Advocate; repealing the Prescription Drug Costs Management Act; transferring the powers and duties to negotiate and execute prescription drug purchasing agreements to the Pharmaceutical Advocate; transfer of the powers and duties to negotiate and execute pharmacy benefit management contracts to the Pharmaceutical Advocate; exempting the Pharmaceutical Advocate from state purchasing requirements; authority to investigate the feasibility of purchasing Canadian drugs; authority to investigate multistate discussion groups and agreements; transfer of the Clearinghouse Program to the Pharmaceutical Advocate; transfer of the Pharmaceutical Discount Program to the Pharmaceutical Advocate; authorizing the Pharmaceutical Advocate to take advantage of Acts of Congress, accept gifts, grants and matching funds; continuing agency management ability until the Office of the Pharmaceutical Advocate is operational; prohibiting restraint of trade; providing civil and criminal penalties for restraint of trade; reporting of advertising costs to the Pharmaceutical Advocate; state role and responsibilities; participation by all state agencies who are payors for prescription drugs; authority for the Pharmaceutical Advocate to investigate participation in a preferred drug list by private individuals, commercial insurance carriers and self-insured companies; rule-making authority; identifying potential use of savings; sunset provisions; severability provision; repeal of the Pharmaceutical Availability and Affordability Act; transfer of the powers and duties of the West Virginia Pharmaceutical Cost Management Council to the Office of the Pharmaceutical Advocate; providing authority for the secretary of each department to cooperate with the Office of the Pharmaceutical Advocate in the purchase of prescription drugs; and eliminating requirement that the Governor focus resources on creation of a prescription drug program from the state Lottery Act.
Be it enacted by the Legislature of West Virginia:
That §5-16-7b of the Code of West Virginia, 1931, as amended; be repealed; that §5-16C-1, §5-16C-2, §5-16C-3, §5-16C-4, §5-16C-5, §5-16C-6, §5-16C-7, §5-16C-8, §5-16C-9 and §5-16C-10 of said code be repealed; that §5A-3-1a of said code be repealed; that §5A-3C-1, §5A-3C-2, §5A-3C-3, §5A-3C-4, §5A-3C-5, §5A-3C-6, §5A-3C-7, §5A-3C-8, §5A-3C-9, §5A-3C-10, §5A-3C-11, §5A-3C-12, §5A-3C-13, §5A-3C-14, §5A-3C-15, §5A-3C-16 and §5A-3C-17 of said code be repealed; that said code be amended by adding thereto a new article, designated §5-16D-1, §5-16D-2, §5-16D-3, §5-16D-4, §5-16D-5, §5-16D-6, §5-16D-7, §5-16D-8, §5-16D-9, §5-16D-10, §5-16D-11, §5-16D-12, §5-16D-13, §5-16D-14, §5-16D-15, §5-16D-16, §5-16D-17, §5-16D-18, §5-16D-19, §5-16D-20, §5-16D-21, §5-16D-22, §5-16D-23, §5-16D-24, §5-16D-25, §5-16D-26, §5-16D-27, §5-16D-28, §5-16D-29 and §5-16D-30; that §5F-2-2 of said code be amended and reenacted; and that §29-22-18a of said code be amended and reenacted, all to read as follows:
CHAPTER 5. GENERAL POWERS AND AUTHORITY OF THE GOVERNOR,

SECRETARY OF STATE AND ATTORNEY GENERAL; BOARD

OF PUBLIC WORKS; MISCELLANEOUS AGENCIES, COMMISSIONS,

OFFICES, PROGRAMS, ETC.

ARTICLE 16D. WEST VIRGINIA PHARMACEUTICAL ADVOCATE ACT.
§5-16D-1. Title.

The provisions of this article shall be known as and referred to as the "West Virginia Pharmaceutical Advocate Act."
§5-16D-2. Legislative findings and intent. (a) The Legislature finds: (1) That the rising cost of prescription drugs is one of the most critical issues facing the current health care system in the State of West Virginia;
(2) This crisis has imposed a significant hardship on individuals who have limited budgets, are uninsured or who have prescription coverage that is unable to control costs successfully due to cost shifting and disparate pricing policies;
(3) That the average cost per prescription for seniors rose significantly between one thousand nine hundred ninety-two and two thousand, and is expected to continue increasing significantly through two thousand ten;
(4) State government agencies could achieve significant savings through the coordinated purchase of prescription drugs;
(5) That there is an increasing need for citizens of West Virginia to have affordable access to prescription drugs; and (6) That the Legislature does not intend the imposition of the programs under this article to penalize or otherwise jeopardize the benefits of veterans and other recipients of federal supply schedule drug prices.
(b) In an effort to promote healthy communities and to protect the public health and welfare of West Virginia residents, the Legislature finds that it is its responsibility to make every effort to provide affordable prescription drugs for all residents of West Virginia.
§5-16D-3. Definitions.

In this article: (1) "Advertising or marketing" means any manner of communication of information, either directly or indirectly, that is paid for and usually persuasive in nature about products, services or ideas related to pharmaceuticals by identified sponsors through various media, persons or other forms as further defined by legislative rule.
(2) "Audit" means a systematic examination and collection of sufficient, competent evidential matter needed for an auditor to attest to the fairness of management's assertions in the financial statements and to evaluate whether management has sufficiently and effectively carried out its responsibilities and complied with applicable laws and regulations, conducted by an independent certified public accountant in accordance with the applicable statement on standards. (3) "Average wholesale price" means the amount determined from the latest publication of the Blue Book, a universally subscribed pharmacist reference guide annually published by the Hearst Corporation. "Average wholesale prices" may also be derived electronically from the drug pricing database synonymous with the latest publication of the Blue Book and furnished in the National Drug Data File by First Data Bank, a service of the Hearst Corporation.
(4) "Brand name drug" means an innovator drug as defined in this section.
(5) "Dispensing fee" means the fee charged by a pharmacy to dispense pharmaceuticals.
(6) "Drug manufacturer" or "pharmaceutical manufacturer" means any entity which is engaged in:
(A) The production, preparation, propagation, compounding, conversion or processing of 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) In the packaging, repackaging, labeling, relabeling or distribution of prescription drug products. "Drug manufacturer" or "pharmaceutical manufacturer" does not include a wholesale distributor of drugs or a retail pharmacy licensed under state law.
(7) "Federal supply schedule" means the price available to all federal agencies for the purchase of pharmaceuticals authorized in the Veterans Health Care Act of 1992, PL 102-585. Federal supply schedule prices are intended to equal or better the prices manufacturers charge their "most-favored" nonfederal customers under comparable terms and conditions.
(8) "Labeler" means an entity or person that receives prescription drugs from a manufacturer or wholesaler and repackages those drugs for later retail sale and that has a labeler code from the Food and Drug Administration pursuant to 21 C.F.R. §207.20 (1999).
(9) "Multiple-source drug", "innovator drug" and "noninnovator drug" mean the following:
(A) The term "multiple-source drug" means, when two or more drug products are: Rated as therapeutically equivalent (under the Food and Drug Administration's most recent publication of "Approved Drug Products with Therapeutic Equivalence Evaluations"), except as provided in paragraph (B) of this subdivision, are pharmaceutically equivalent and bioequivalent, as determined by the Food and Drug Administration, and the term "innovator drug" is referred to in this article as "brand". The term "innovator drug" means a 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 and any multiple-source drug that was originally marketed under an original new drug application approved by the Food and Drug Administration. The term "noninnovator drug" is referred to in this article as "generic." The term "noninnovator drug" means a multiple-source drug that is not an "innovator drug."
(B) Paragraph (A) of this subdivision does not apply if the Food and Drug Administration changes by regulation the requirement that, for purposes of the publication described in paragraph (A) of this subdivision, in order for drug products to be rated as therapeutically equivalent, they must be pharmaceutically equivalent and bioequivalent.
(10) "Office of the Pharmaceutical Advocate" or "Office" means the Office created pursuant to section four of this article.
(11) "Person" means any natural person or persons or any corporation, partnership, company, trust or association of persons.
(12) "Pharmaceutical Advocate" or "Advocate" means the position created pursuant to section five of this article.
(13) "Pharmacy benefit manager" means an entity that procures prescription drugs at a negotiated rate under a contract and which may serve as a third party prescription drug benefit administrator.
(14) "Pharmaceutical drug detailing" or "detailing" means the function performed by a sales representative who is employed by a pharmaceutical manufacturer for the purpose of; promotion of pharmaceutical drugs or related products; education about pharmaceutical drugs or related products; or to provide samples of pharmaceutical drugs, related products or related materials, gifts, food or meals.
(15) "Prescription drug purchasing agreement" means a written agreement to pool all parties' prescription drug buying power in order to negotiate the best possible prices and which delegates authority to negotiate on behalf of the parties to the Advocate. (16) "Prescription drugs" mean substances recognized as drugs in the official "United States Pharmacopoeia, official Homeopathic Pharmacopoeia of the United States or National Formulary," or any supplement thereto, dispensed pursuant to a prescription issued by an authorized health care practitioner, for use in the diagnosis, cure, mitigation, treatment or prevention of disease in a human, as well as prescription drug delivery systems, testing kits and related supplies.
(17) "Savings" means the difference between the previous price of a prescription drug including any discounts, rebates or price containments and the current price after the effective date of this article for the Public Employees Insurance Agency, the Children's Health Insurance Program, the Division of Corrections, the Division of Juvenile Services, the Regional Jail and Correctional Facility Authority, the Workers' Compensation Fund, state colleges and universities, public hospitals, state or local institutions such as nursing homes, veterans' homes, the Division of Rehabilitation, public health departments and the Bureau of Medical Services or other programs which are payors for prescription drugs. (18) "Sole source" means a pharmaceutical that provides a unique and powerful advantage available in the market to a broad group of patients established under federal law. (19) "West Virginia Pharmaceutical Advocate Advisory Council" or "Council" means the Council created pursuant to section eleven of this article.
§5-16D-4. Creation of Office of Pharmaceutical Advocate; cooperation among state agencies; Medicaid and CHIP program.

(a) There is hereby created the Office of Pharmaceutical Advocate. The purpose of this Office is to obtain favorable pharmaceutical prices for state agencies and other qualified entities pursuant to this article. The Office is under the direct supervision of the Pharmaceutical Advocate, who is responsible for the exercise of the duties and powers assigned to the Office under the provisions of this article.
(b) The Public Employees Insurance Agency, the Children's Health Insurance Program, the Division of Corrections, the Division of Juvenile Services, the Regional Jail and Correctional Facility Authority, the Workers' Compensation Fund, state colleges and universities, public hospitals, state or local institutions such as nursing homes, veterans' homes, the Division of Rehabilitation, public health departments and the Bureau of Medical Services or other programs which are payors for prescription drugs shall cooperate with the Office of the Pharmaceutical Advocate to meet the requirements of this article.
(c) The Medicaid program and the West Virginia Children's Health Insurance program may be exempt from participation in this program until approval by the Center for Medicare and Medicaid Services has been granted if it is determined to be required by the Pharmaceutical Advocate created under section five of this article.
§5-16D-5. West Virginia Pharmaceutical Advocate; appointment; qualifications; oath; salary.
(a) The Office of the Pharmaceutical Advocate is under the supervision of the Pharmaceutical Advocate. The Advocate is the executive and administrative head of the office and shall be appointed by the Governor with advice and consent of the Senate. The Advocate shall be qualified by training and experience to direct the operations of the Office of the Pharmaceutical Advocate, and serves at the will and pleasure of the Governor. The duties of the Advocate include, but are not limited to, the management and administration of the Office of the Pharmaceutical Advocate.
(b) Notwithstanding any provision of this code to the contrary, the Advocate is the sole source for management and negotiation and purchase of all pharmaceuticals for all state agencies and other qualified entities including, but not limited to, the Public Employees Insurance Agency, the Children's Health Insurance Program, the Division of Corrections, the Division of Juvenile Services, the Regional Jail and Correctional Facility Authority, the Workers' Compensation Fund, state colleges and universities, public hospitals, state or local institutions such as nursing homes, veterans' homes, the Division of Rehabilitation, public health departments and the Bureau of Medical Services or other programs which are payors for prescription drugs.
(c) The Advocate:
(1) Serves on a full-time basis and may not be engaged in any other profession or occupation;
(2) May not hold political office in the government of the state either by election or appointment while serving as the Advocate;
(3) Shall be a citizen of the United States and become a resident of the state within ninety days of appointment;
(4) Is entitled to receive an annual salary as provided by the Governor; and
(5) Is ineligible for civil service coverage as provided in section four, article six, chapter twenty-nine of this code. Any executive secretary hired by the Advocate is ineligible for civil service coverage.
(d) Before entering upon the discharge of the duties as Advocate, the Advocate shall take and subscribe to the oath of office prescribed in section five, article IV of the Constitution of West Virginia. The executed oath shall be filed in the office of the Secretary of State.
(e) The Advocate shall report directly to the Governor or the Governor's designee.
§5-16D-6. West Virginia Pharmaceutical Advocate; powers and duties, hiring of staff.
(a) The Advocate serves as the Chairman of the Pharmaceutical Advocate Advisory Council established pursuant to section eleven of this article.
(b) The Advocate has the power and authority to:
(1) Purchase or enter into contracts or agreements as necessary to achieve the purposes of this article and pursuant to the provisions of section seven of this article;
(2) File suit;
(3) Evaluate and renegotiate existing contracts for state purchase of prescription drugs for cost savings;
(4) Negotiate and execute pharmacy benefit management contracts using the federal supply schedule as a benchmark for the purpose of managing rising drug costs for this state and all parties which have executed prescription drug purchasing agreements with the Office of Pharmaceutical Advocate or other state agency;
(5) Provide discount prices or rebate programs as prudent for seniors and persons without adequate prescription drug insurance;
(6) Work to achieve disclosure of the amount spent by prescription drug manufacturers with regard to expenditures for advertising, marketing, and promotion, as well as for provider incentives and research and development efforts;
(7) Establish programs aimed at educating health care practitioners authorized to prescribe prescription drugs about the relative costs and benefits of various prescription drugs, with an emphasis on generic substitution for brand name drugs when available and appropriate; prescribing established, less-costly drugs instead of newer and more expensive drugs, when appropriate; and prescribing lower dosages of prescription drugs when appropriate;
(8) Establish disease management programs aimed at enhancing the effectiveness of treating certain diseases identified as prevalent among this state's population with prescription drugs; (9) Facilitate the establishment of voluntary private buying clubs, cooperatives or purchasing alliances comprised of small businesses or individuals for the purpose of purchasing prescription drugs at optimal prices;
(10) Develop and implement a program to maximize savings to the state and its citizens from Section 340B of the Federal Public Health Service Act, 42 U.S.C. 256b, as applicable;
(11)Develop and implement a program under which the state purchases, then resells, prescription drugs at cost, plus operating expenses, to West Virginia consumers;
(12)Develop and implement a program under which the state may become a licensed pharmaceutical wholesaler for the purposes of making pharmaceuticals obtained by a buying consortium available to local pharmacies; and
(13)Develop and implement other programs, projects and initiatives to achieve the purposes of this article, including initiating, evaluating, and promoting other strategies that result in reduced costs of prescription drugs for the citizens of West Virginia, including, but not limited to:
(A) A common preferred drug list for the Public Employees Insurance Agency, the Children's Health Insurance Program, the Division of Corrections, the Division of Juvenile Services, the Regional Jail and Correctional Facility Authority, the Workers' Compensation Fund, state colleges and universities, public hospitals, state or local institutions such as nursing homes, veterans' homes, the Division of Rehabilitation, public health departments and the Bureau of Medical Services or other programs which are payors for prescription drugs;
(B) A streamlined prior authorization process for state insurers; and
(C) Patient assistance programs in their current forms, as well as new programs, such as central fill pharmacy/bulk replenishment models.
(c) The Advocate shall consult with the Council and employ such professional, clerical, technical and administrative personnel as may be necessary to carry out the provisions of this article.
(d) The Advocate, with input and advice from the Council, shall prepare and submit annual proposed appropriations for the Office of the Pharmaceutical Advocate and the Council to the Governor.
(e) Submit an annual report to the Governor and the Legislature on the condition, operation and functioning of the Office of the Pharmaceutical Advocate.
(f) Supervise the fiscal management and responsibilities of the Office of the Pharmaceutical Advocate.
(g) Keep an accurate and complete record of all Office of the Pharmaceutical Advocate proceedings, record and file all bonds and contracts and assume responsibility for the custody and preservation of all papers and records of the Office.
§5-16D-7. Authorization to execute prescription drug purchasing agreements.

(a) The Advocate may execute, subject to the provisions of subsection (c) of section six of this article and as permitted by applicable federal law, prescription drug purchasing agreements with:
(1) All departments, agencies, authorities, institutions, programs, quasi-public corporations and political subdivisions of this state, including, but not limited to, the Public Employee's Insurance Agency, the Children's Health Insurance Program, the Division of Corrections, the Division of Juvenile Services, the Regional Jail and Correctional Facility Authority, the Workers' Compensation Fund, state colleges and universities, public hospitals, state or local institutions such as nursing homes, veterans' homes, the Division of Rehabilitation, public health departments and the Bureau of Medical Services: Provided, That any contract or agreement executed with or on behalf of the Bureau of Medical Services shall contain all necessary provisions to comply with the provisions of Title XIX of the Social Security Act, 42 U.S.C. §1396 et seq., dealing with pharmacy services offered to recipients under the medical assistance plan of West Virginia;(2) Governments of other states and jurisdictions and their individual departments, agencies, authorities, institutions, programs, quasi-public corporations and political subdivisions; (3) Regional or multistate purchasing alliances or consortia, formed for the purpose of pooling the combined purchasing power of the individual members in order to increase bargaining power; and (4) Arrangements with entities in the private sector, including, commercial insurance carriers, self-funded benefit plans and private and not-for-profit hospitals toward combined purchasing of health care services, health care management services, pharmacy benefits management services or pharmaceutical products: Provided, That no private entity may be compelled to participate in the prescription drug purchasing pool.
(b) The Council created pursuant to section eleven of this article is responsible for reviewing any proposed contract authorized by this article before it is executed by the Advocate. If the Council determines that the proposed contract meets the requirements of this article and would assist in effectively managing the costs for the programs involved and would not result in jeopardizing state funds or funds due the state, it shall approve the contract and authorize the Advocate to execute the contract.
(c) The Council may not approve and the Advocate may not execute any agreement that does not effectively and efficiently manage rising drug costs on behalf of the parties to the agreement. (d) The Council may not approve and the Advocate may not execute any agreement that grants the state's credit for the purchase of prescription drugs by any entity other than this state. §5-16D-8. Audit required; reports.
(a) The Advocate shall cause to be conducted an audit of any funds expended pursuant to any prescription drug purchasing agreement or pharmacy benefit management contract executed under the provisions of this article for each fiscal year that the prescription drug purchasing agreement or pharmacy benefit management contract is in effect. The Advocate shall submit the audit to the Joint Committee on Government and Finance upon completion, but in no event later than the thirty-first day of December after the end of the fiscal year subject to the audit.
(b) The Advocate shall provide written notice to the Joint Committee on Government and Finance before executing a prescription drug purchasing agreement or a pharmacy benefit management contract or amending an existing prescription drug contract.
§5-16D-9. Authorization to execute pharmacy benefit management contract.

The Advocate may negotiate and execute pharmacy benefit management contracts for the purpose of managing rising drug costs for this state and all parties which have executed prescription drug purchasing agreements with the state or any state agency, including, but not limited to, the Public Employees Insurance Agency, the Children's Health Insurance Program, the Division of Corrections, the Division of Juvenile Services, the Regional Jail and Correctional Facility Authority, the Workers' Compensation Fund, state colleges and universities, public hospitals, state or local institutions such as nursing homes, veterans' homes, the Division of Rehabilitation, public health departments and the Bureau of Medical Services or other programs which are payors for prescription drugs.
§5-16D-10. Authorization to amend existing contracts.
The Advocate may renegotiate and amend existing prescription drug contracts to which the state or any state agency, including, but not limited to, the Public Employees Insurance Agency, the Children's Health Insurance Program, the Division of Corrections, the Division of Juvenile Services, the Regional Jail and Correctional Facility Authority, the Workers' Compensation Fund, state colleges and universities, public hospitals, state or local institutions such as nursing homes, veterans' homes, the Division of Rehabilitation, public health departments and the Bureau of Medical Services, or other programs which are payors for prescription drugs is a party for the purpose of managing rising drug costs.
§5-16D-11. Exemption from Purchasing Division requirements.
The provisions of article three, chapter five-a of this code do not apply to the agreements and contracts executed under the provisions of this article, except that the contracts and agreements shall be approved as to form and conformity with applicable law by the Attorney General. §5-16D-12. Creation of the West Virginia Pharmaceutical Advocate Advisory Council.
(a) The West Virginia Pharmaceutical Advocate Advisory Council is hereby created. The Council is an independent, self-sustaining council that has the powers and duties specified in this article.
(b) The Council is a part-time council whose members perform such duties as specified in this article. The ministerial duties of the Council shall be administered and carried out by the Office of the Pharmaceutical Advocate.
(c) Each member of the Council shall devote the time necessary to carry out the duties and obligations of the office. Those members appointed by the Governor may pursue and engage in another business or occupation or gainful employment that is not in conflict with the duties of the Council.
(d) The Council is self-sustaining and independent, however, it, its members, the Advocate and employees of the Office of the Pharmaceutical Council are subject to article nine-a of chapter six, chapter six-b, chapter twenty-nine-a and chapter twenty-nine-b of this code.
§5-16D-13. Appointment of members of the West Virginia Pharmaceutical Advocate Advisory Council; chairman; qualifications and eligibility; reimbursement for expenses.

(a) The Council is comprised of the Pharmaceutical Advocate, the Secretary of the Department of Administration or his or her designee, the Director of the Public Employees Insurance Agency or his or her designee, the Commissioner of the Bureau of Medical Services of the Department of Health and Human Resources or his or her designee, the Secretary of the Department of Health and Human Resources or his or her designee, the Commissioner of the Bureau of Senior Services or his or her designee, the Secretary of the Department of Military Affairs and Public Safety or his or her designee, the Secretary of the Department of Education and the Arts or his or her designee, and five members from the public who shall be appointed by the Governor with the advice and consent of the Senate. One public member shall be a licensed pharmacist employed by a community retail pharmacy, one public member shall be a representative of a pharmaceutical manufacturer with substantial operations located in West Virginia that has at least seven hundred fifty employees, one public member shall be a primary care physician, one public member shall represent those who will receive benefit from the establishment of the Office of the Pharmaceutical Advocate and one public member shall have experience in the financing, development or management of a health insurance company which provides pharmaceutical coverage. Each public member shall serve for a term of four years. Of the public members of the Council first appointed, one shall be appointed for a term ending the thirtieth day of June, two thousand six, and two each for terms of three and four years. Each public member serves until his or her successor is appointed and has qualified. A member of the Council may be removed by the Governor for cause.
(b) The Pharmaceutical Advocate serves as Chairperson of the Council.
(c) Council members may not be compensated in their capacity as members but shall be reimbursed for reasonable expenses incurred in the performance of their duties.
§5-16D-14. Meeting requirements.
(a) The Council shall meet within the state at least once per calendar quarter or at such times as the Chairman may decide. The Council shall also meet upon a call of five or more members upon seventy-two hours written notice to each member.
(b) Seven members of the Council are a quorum for the transaction of any business and for the performance of any duty.
(c) A majority vote of the members present is required for any final determination by the Council. Voting by proxy is not allowed.
(d) The Council shall keep a complete and accurate record of all its meetings according to section five, article nine-a, chapter six of this code.
§5-16D-15. Removal of Council members.
Notwithstanding the provisions of section four, article six, chapter six of this code, the Governor may remove any Council member for incompetence, misconduct, gross immorality, misfeasance, malfeasance or nonfeasance in office.
§5-16D-16. General duties of the West Virginia Pharmaceutical Advocate Advisory Council.
The Council has general responsibility to review and provide advice and comment to the Office of the Pharmaceutical Advocate on its policies and procedures relating to the purchase of prescription drugs. The Council shall offer advice to the Office of the Pharmaceutical Advocate on matters over which the office has authority and oversight. This includes, but is not limited to:
(1) Hiring of professional, clerical, technical and administrative personnel as may be necessary to carry out the provisions of this article;
(2) Promulgation of rules, including emergency rules, that are necessary to carry out the provisions of this article;
(3) Contracts or agreements; and
(4) Development of policy necessary to meet the duties and responsibilities of the Office or the Advocate pursuant to the provisions of this article.
§5-16D-17. Investigation of Canadian drugs; wholesaling; federal waivers.

(a) The Advocate is authorized to investigate the feasibility of purchasing prescription drugs from sources in Canada, which may include the feasibility of the state or an instrumentality thereof serving as a wholesale distributor of prescription drugs in the state.
(b) Upon a determination by the Advocate that the same is feasible and in the best interests of the citizens of the state, the Advocate is authorized to pursue waivers from the federal government, including, but not limited to, from the United States Food and Drug Administration, as necessary for the state to accomplish prescription drug purchasing from sources in Canada: Provided, That if a waiver is not granted, the Advocate is authorized to take necessary legal action.
(c) Upon a favorable finding by the appropriate federal agencies or courts, notwithstanding any provision of this code to the contrary, the Advocate may establish and implement a methodology to provide wholesale drugs to licensed pharmacies located within West Virginia.
§5-16D-18. Multistate discussion group; agreements.
The Advocate, for the purposes of administering, reviewing or amending the duties and responsibilities granted him or her by this article, shall continue to investigate the feasibility of mulitstate discussions and may enter into multistate discussions and agreements when to do so would enure to the financial benefit of all West Virginians who are consumers of pharmaceuticals.
5-16D-19. Creation of Clearinghouse Program.

(a) There is hereby created within the Office of the Pharmaceutical Advocate the State Prescription Drug Assistance Clearinghouse Program. The brand pharmaceutical manufacturers shall create and implement a program in consultation with the Office of the Pharmaceutical Advocate to assist state residents who are low income or uninsured to gain access to prescription medications through existing private and public sector programs and prescription drug assistance programs offered by manufacturers, including discount and coverage programs. The brand pharmaceutical manufacturers shall:
(1) Use available computer software programs that access an eligible individual with the appropriate private or public programs relating to the individual's medically necessary drugs;
(2) Provide education to individuals and providers to promote the program and to expand enrollment and access to necessary medications for low-income or uninsured individuals qualifying for the Programs; and
(3) Be responsible for the cost of the establishment of the Program, and be responsible for running the Program, regardless of the date of transfer of the Program to the state, for the period until a date no earlier than the thirtieth day of June, two thousand five, and ownership of the technology, website and other program features shall be transferred to the state on the same date.
The Office of the Pharmaceutical Advocate shall provide oversight with respect to the establishment, construction, and continued operation of the Program and Program features.
(b) The participating brand pharmaceutical manufacturers shall contribute the funding for the promotion of the public relations program attendant to the establishment of the Program. The participating brand pharmaceutical manufacturers shall be responsible for the cost of the establishment of the program and the cost of the ongoing program, regardless of the date of transfer of ownership of the program to the state, for the period until a date not earlier than the thirtieth day of June, two thousand five.
§5-16D-20. Pharmaceutical Discount Program; establishment; eligible individuals; discount pass through; terms.

There is hereby established within the Office of the Pharmaceutical Advocate a Discount Drug Program to provide low-income, uninsured individuals with access to prescription drugs from participating brand pharmaceutical companies and pharmacists through either a state-sponsored discount card program or a program that extends current brand pharmaceutical manufacturer prescription drug assistance programs:
(a) The state hereby establishes a state-sponsored prescription drug discount card program for certain eligible residents of West Virginia: (1) Eligible individuals include uninsured residents of West Virginia up to two hundred per cent of the federal poverty guideline who have not been covered by a prescription drug program, whether public or private, at least six months prior to applying to the discount card program;
(2) The state may negotiate voluntary discounts with brand pharmaceutical manufacturers and pharmacists: Provided, That the total discount received from the manufacturer shall pass through to the eligible resident;
(3) Failure of a brand pharmaceutical manufacturer to participate in the voluntary discount card program will not result in prior authorization on drugs in the medicaid program which would not otherwise be subject to prior authorization but for the failure of the manufacturer to participate in this program; and
(4) The state shall not establish a formulary or preferred drug list as part of the discount card program.
(b) The brand pharmaceutical manufacturers may extend existing prescription drug assistance programs to eligible residents of West Virginia. Eligible individuals include uninsured residents of West Virginia up to two hundred percent of the federal poverty level who have not been covered by a prescription drug program, whether public or private, at least six months prior to applying to the program. (c) The program established under this section shall be structured so that a member presenting a discount card at a participating pharmacy will receive the full benefit of the pharmacy discount, as well as the manufacturer's discount, at a point of sale transaction. The program, or the pharmacy benefit manager contracted by the program, shall coordinate the drug discount information provided by participating pharmacies and manufacturers so that the available drug discounts are provided to the member at the point of sale.
(d) Manufacturers participating in the voluntary program established under this section shall cooperate with the Program, the Office of the Pharmaceutical Advocate or the pharmacy benefit manager contracted by either the program or the Office of the Pharmaceutical Advocate, to provide the current list of drugs and the percentage of discount from the average wholesale price for such drugs, or the rebates that the manufacturer will provide under the program. It is the intent of this program that adequate drug price and discount or rebate information be provided by the manufacturer, such that the program and participating pharmacies will have available such drug prices and discounts or rebates at a point of sale pharmaceutical drug transaction. Retail pharmacies will be responsible for no more than fifty percent of the discount offered by the manufacturer to the participant.
(1) Pharmacies participating in the voluntary program or programs established under this section are responsible for no more than fifty percent of the discount offered by the manufacturer to the participant, and shall be paid a dispensing fee of no more than three dollars and fifty cents per prescription with regard to prescriptions filled under the program or programs.
(2) Upon the presentation of a valid discount card, payment for the prescription and otherwise meeting appropriate criteria to have their prescription filled, the cardholder shall have their prescription filled by a participating pharmacy. To accomplish the transaction, the participating pharmacy shall electronically transmit the transaction to the program, Office of the Pharmaceutical Advocate or pharmacy benefit manager contracted by the program for processing. The Office of the Pharmaceutical Advocate, or the program's pharmacy benefit manager, shall determine the discounted cost of the drug, including the discount provided, the discount provided by the pharmacy, the discount or rebate provided by the manufacturer, the pharmacy dispensing fee, and any pharmacy benefit manager transaction fee. The program, Office of the Pharmaceutical Advocate, or the program's pharmacy benefit manager, shall then transmit to the manufacturer an electronic statement of the amount the manufacturer owes on the transaction to cover the manufacturer's discount or rebate and the program's pharmacy benefit manager's processing fee. The manufacturer shall, in turn, at least every fourteen days, transmit such monetary amounts for the transaction to the program or the program's pharmacy benefit manager, and the program or the program's pharmacy benefit manager, shall pass such discount or rebate amounts back to the participating pharmacy which originated the transaction immediately.
(e) The pharmaceutical manufacturers shall report to the Joint Committee on Government and Finance on a monthly basis all activities related to the implementation of this program including the number of citizens serviced and the services provided, as well as, the benefits, the costs and the discounts obtained.
§5-16D-21. Authorization to take advantage of Acts of Congress, accept gifts, grants and matching funds. 
The Office of the Pharmaceutical Advocate is authorized to take full advantage of the benefits and provisions of any Acts of Congress and to accept any and all gifts, grants and matching funds whether in the form of money or services.
§5-16D-22. Agency's management ability continued.
Nothing contained in this article limits the ability of the various state agencies to enter into contracts or arrangements or to otherwise manage their pharmacy programs until such time as the programs created or authorized pursuant to this article are implemented.
§5-16D-23. Restraint of trade; civil and criminal violations defined.
(a) The following are considered to restrain trade or commerce unreasonably and are unlawful:
(1) A contract, combination or conspiracy between two or more persons:
(A) For the purpose or with the intent to fix, control or maintain the market price, rate or fee of pharmaceuticals; or
(B) Allocate or divide customers or markets, functional or geographic, for any pharmaceutical; and
(2) The establishment, maintenance or use of a monopoly or an attempt to establish a monopoly of trade or commerce, any part of which is within this state, by any persons for the purpose of or with the intent to exclude competition or control, fix or maintain pharmaceutical prices.
(b) Any person violating the provisions of this section is guilty of a felony and, upon conviction thereof, shall be confined in a state correctional facility for not less than one nor more than ten years, or fined in an amount consistent with the Clayton Act 15 U.S.C. §15 et seq., which may include treble damages, or both fined and confined.
(c) Any person violating the provisions of this section is liable for a civil penalty and fine in an amount consistent with the Clayton Act 15 U.S.C. §15 et seq., which may include treble damages, for each violation.
(d) The county prosecuting attorney shall investigate suspected violations of, and institute criminal proceedings pursuant to, the provisions of this section.
(e) The Attorney General or special counsel appointed by the Governor, in his or her discretion, shall represent the state in all civil proceedings brought on behalf of the state to enforce the provisions of this section. After payment of all attorney fees and costs, no less than fifty percent of all judgments or settlements shall be placed in the General Revenue Fund of the state.
§5-16D-24. Advertising costs; reporting of same.
(a) Advertising costs for prescription drugs, based on aggregate national data, shall be reported to the Pharmaceutical Advocate by all manufacturers and labelers of prescription drugs dispensed in this state that employs, directs or utilizes marketing representatives. The reporting shall assist this state in its role as a purchaser of prescription drugs and an administrator of prescription drug programs, enabling this state to determine the scope of prescription drug advertising costs and their effect on the cost, utilization and delivery of health care services and furthering the role of this state as guardian of the public interest. (b) The Advocate shall establish, by legislative rule, the reporting requirements of information by labelers and manufacturers which shall include all national aggregate expenses associated with advertising and direct promotion of prescription drugs through radio, television, magazines, newspapers, direct mail and telephone communications as they pertain to residents of this state.
(c) The following are exempt from disclosure requirements: (1) All free samples of prescription drugs intended to be distributed to patients;
(2) All payments of reasonable compensation and reimbursement of expenses in connection with a bona fide clinical trial. As used in this subdivision, "clinical trial" means an approved clinical trial conducted in connection with a research study designed to answer specific questions about vaccines, new therapies or new ways of using known treatments; and
(3) All scholarship or other support for medical students, residents and fellows to attend significant educational, scientific or policy-making conference of national, regional or specialty medical or other professional association if the recipient of the scholarship or other support is selected by the association.
(d) The Advocate is authorized to establish time lines, the documentation, form and manner of reporting required as he or she determines necessary to effectuate the purpose of this article.
The Advocate shall include in the annual report required pursuant to subsection (e) of section five of this article, in an aggregate form, the information provided in the required reporting.
(e) Notwithstanding any provision of law to the contrary, information submitted to the Advocate pursuant to this section is confidential and is not a public record and is not available for release pursuant to the West Virginia Freedom of Information Act. Data compiled in aggregate form by the Advocate for the purposes of reporting required by this section is a public record as defined in the West Virginia Freedom of Information Act, as long as it does not reveal trade information that is protected by state or federal law.
§5-16D-25. State role; authority for participation by all state agencies.

(a) For purpose of implementing this article, the state is represented by the Pharmaceutical Advocate and he or she has authority to negotiate pharmaceutical prices to be paid by program participants. These negotiated prices shall be available to all programs. (b) The Public Employees Insurance Agency, the Children's Health Insurance Program, the Division of Corrections, the Division of Juvenile Services, the Regional Jail and Correctional Facility Authority, the Workers' Compensation Fund, state colleges and universities, public hospitals, state or local institutions such as nursing homes, veterans' homes, the Division of Rehabilitation, public health departments and the Bureau of Medical Services or other programs which are payors for prescription drugs shall have the authority to participate in any program developed by the Office of the Pharmaceutical Advocate, including but not limited to, a uniform preferred drug list.
§5-16D-26. Participation by private individuals, commercial insurance carriers, self-insured companies and others in negotiated drug pricing program.

(a) The Advocate, for the purposes of administering, reviewing or amending the duties and responsibilities granted him or her by this article, shall investigate the feasibility of including private individuals, commercial insurance carriers, self-insured companies and private and not-for-profit hospitals in a negotiated drug pricing program.
(b) The Advocate has the power to establish programs and procedure necessary to allow private individuals, commercial insurance carriers, self-insured companies and private and not-for-profit hospitals to participate in the negotiated drug pricing program. This power includes, but is not limited to, the power to:
(1) Negotiate and execute contracts or cooperative agreements necessary to permit private individuals, commercial insurance carriers, self-insured companies and private and not-for-profit hospitals to participate in the negotiated drug pricing program; and
(2) Promulgate legislative rules necessary to facilitate the participation of private individuals, commercial insurance carriers, self-insured companies and private and not-for-profit hospitals in the negotiated drug pricing program.
§5-16D-27. Rule Making.
To implement any section of this article the Office of the Pharmaceutical Advocate, in consultation with the Council, shall propose rules for legislative approval in accordance with chapter twenty-nine-a of this code. This authority shall include emergency rule-making authority pursuant to the provisions of section fifteen, article three, chapter twenty-nine-a of this code. These rules shall include, but are not limited to:
(1) Development of criteria to establish a purchasing consortium. These criteria should include, but are not limited to, membership eligibility; which shall include state entities that are payors for prescription drugs and may include private individuals and commercial insurance carriers, self-funded benefit plans and private and not-for-profit hospitals; consortium operation and functionality and the manner and procedure for the consortium to either bid or negotiate pricing with pharmaceutical manufacturers using the federal supply schedule as a benchmark for obtaining lower priced pharmaceuticals;
(2) The requirements for implementation of the pharmaceutical discount program pursuant to section twenty of this article including, but not limited to, eligibility determination, program operation and review, pharmacy and manufacture participation and other elements necessary for the program to function;
(3) Development of a uniform preferred drug list for use by state entities who are payors for prescription drugs. These entities include, but are not limited to, the Public Employees Insurance Agency, the Children's Health Insurance Program, the Division of Corrections, the Division of Juvenile Services, the Regional Jail and Correctional Facility Authority, the Workers' Compensation Fund, state colleges and universities, public hospitals, state or local institutions such as nursing homes, veterans' homes, the Division of Rehabilitation, public health departments and the Bureau of Medical Services, or other programs which are payors for prescription drugs;
(4) The reporting requirements of information by labelers and manufacturers required pursuant to section twenty-four of this article which shall include all national aggregate expenses associated with advertising and direct promotion of prescription drugs through radio, television, magazines, newspapers, direct mail and telephone communications as they pertain to residents of this state;
(5) Development of virtual wholesale program to allow the state to act as a pharmaceutical drug wholesaler and ensure that prices obtained by a buying consortium operated by the Pharmaceutical Advocate would be made available for purchase by local pharmacies;
(6) Procedural requirements of execution of pharmacy benefit management contracts pursuant to section nine of this article and prescription drug purchasing agreements pursuant to section seven of this article; and
(7) Other rules considerd necessary by the Pharmaceutical Advocate to carry out the duties and responsibilities prescribed to the Advocate or the Office of the Pharmaceutical Advocate in this article.
§5-16D-28. Potential use of savings.
Savings identified by all program participants shall be quantified and certified to the Pharmaceutical Advocate and included in the annual report of the Pharmaceutical Advocate to the Governor and the Legislature provided in subsection (e) of section six of this article. Savings, or any part thereof, created by the implementation of this program may, in the sole discretion of the Legislature, be directed towards the maintenance of existing state health programs and the expansion of insurance programs for the uninsured and underinsured.
§5-16D-29. Sunset provision.
The Office of the Pharmaceutical Advocate, the Pharmaceutical Advocate and the Pharmaceutical Advocate Advisory Council shall continue to exist, pursuant to the provisions of article ten, chapter four of this code, until the first day of July, two thousand eight, unless sooner terminated, continued or reestablished pursuant to the provisions of that article.
§5-16D-30. Severability.
If any provision of this article is held to be unconstitutional or void, the remaining provisions of this article remain valid, unless the court finds the valid provisions are so essentially and inseparable connected with, and so dependent upon, the unconstitutional or void provisions that the court cannot presume the Legislature would have enacted the remaining valid provisions without the unconstitutional or void provision, or unless the court finds the remaining valid provisions, standing alone, are incomplete and are incapable of being executed in accordance with the legislative intent.
CHAPTER 5F. ORGANIZATION OF THE EXECUTIVE BRANCH

OF STATE GOVERNMENT.

ARTICLE 2. TRANSFER OF AGENCIES AND BOARDS.
5F-2-2. Power and authority of secretary of each department.

(a) Notwithstanding any other provision of this code to the contrary, the secretary of each department shall have plenary power and authority within and for the department to:
(1) Employ and discharge within the office of the secretary such employees as may be necessary to carry out the functions of the secretary, which employees shall serve at the will and pleasure of the secretary;
(2) Cause the various agencies and boards to be operated effectively, efficiently and economically, and develop goals, objectives, policies and plans that are necessary or desirable for the effective, efficient and economical operation of the department;
(3) Eliminate or consolidate positions, other than positions of administrators or positions of board members, and name a person to fill more than one position;
(4) Delegate, assign, transfer or combine responsibilities or duties to or among employees, other than administrators or board members;
(5) Reorganize internal functions or operations;
(6) Formulate comprehensive budgets for consideration by the Governor, and transfer within the department funds appropriated to the various agencies of the department which are not expended due to cost savings resulting from the implementation of the provisions of this chapter: Provided, That no more than twenty-five percent of the funds appropriated to any one agency or board may be transferred to other agencies or boards within the department: Provided, however, That no funds may be transferred from a special revenue account, dedicated account, capital expenditure account or any other account or funds specifically exempted by the Legislature from transfer, except that the use of appropriations from the State Road Fund transferred to the Office of the Secretary of the Department of Transportation is not a use other than the purpose for which such funds were dedicated and is permitted: Provided further, That if the Legislature by subsequent enactment consolidates agencies, boards or functions, the secretary may transfer the funds formerly appropriated to such agency, board or function in order to implement such consolidation. The authority to transfer funds under this section shall expire on the thirtieth day of June, one thousand ninety hundred eighty-nine two thousand six;
(7) Enter into contracts or agreements requiring the expenditure of public funds, and authorize the expenditure or obligating of public funds as authorized by law: Provided, That the powers granted to the secretary to enter into contracts or agreements and to make expenditures or obligations of public funds under this provision shall not exceed or be interpreted as authority to exceed the powers heretofore granted by the Legislature to the various commissioners, directors or board members of the various departments, agencies or boards that comprise and are incorporated into each secretary's department under this chapter;
(8) Acquire by lease or purchase property of whatever kind or character and convey or dispose of any property of whatever kind or character as authorized by law: Provided, That the powers granted to the secretary to lease, purchase, convey or dispose of such property shall not exceed or be interpreted as authority to exceed the powers heretofore granted by the Legislature to the various commissioners, directors or board members of the various departments, agencies or boards that comprise and are incorporated into each secretary's department under this chapter;
(9) Conduct internal audits;
(10) Supervise internal management;
(11) Promulgate rules, as defined in section two, article one, chapter twenty-nine-a of this code, to implement and make effective the powers, authority and duties granted and imposed by the provisions of this chapter, such promulgation to be in accordance with the provisions of chapter twenty-nine-a of this code;
(12) Grant or withhold written consent to the proposal of any rule, as defined in section two, article one, chapter twenty-nine-a of this code, by any administrator, agency or board within the department, without which written consent no proposal of a rule shall have any force or effect;
(13) Delegate to administrators such duties of the secretary as the secretary may deem appropriate from time to time to facilitate execution of the powers, authority and duties delegated to the secretary; and
(14) Take any other action involving or relating to internal management not otherwise prohibited by law.
(b) The secretaries of the departments hereby created shall engage in a comprehensive review of the practices, policies and operations of the agencies and boards within their departments to determine the feasibility of cost reductions and increased efficiency which may be achieved therein, including, but not limited to, the following:
(1) The elimination, reduction and restrictions in the use of the state's vehicle or other transportation fleet;
(2) The elimination, reduction and restrictions in the preparation of state government publications, including annual reports, informational materials and promotional materials;
(3) The termination or rectification of terms contained in lease agreements between the state and private sector for offices, equipment and services;
(4) The adoption of appropriate systems for accounting, including consideration of an accrual basis financial accounting and reporting system;
(5) The adoption of revised procurement practices to facilitate cost-effective purchasing procedures, including consideration of means by which domestic businesses may be assisted to compete for state government purchases; and
(6) The computerization of the functions of the state agencies and boards.
(c) Notwithstanding the provisions of subsections (a) and (b) of this section, none of the powers granted to the secretaries herein shall be exercised by the secretary if to do so would violate or be inconsistent with the provisions of any federal law or regulation, any federal-state program or federally delegated program or jeopardize the approval, existence or funding of any such program and the powers granted to the secretary shall be so construed.
(d) The layoff and recall rights of employees within the classified service of the state as provided in subsections five and six, section ten, article six, chapter twenty-nine of this code shall be limited to the organizational unit within the agency or board and within the occupational group established by the classification and compensation plan for the classified service of the agency or board in which the employee was employed prior to the agency or board's transfer or incorporation into the department: Provided, That the employee shall possess the qualifications established for the job class. The duration of recall rights provided in this subsection shall be limited to two years or the length of tenure, whichever is less. Except as provided in this subsection, nothing contained in this section shall be construed to abridge the rights of employees within the classified service of the state as provided in sections ten and ten-a, article six, chapter twenty-nine of this code, or the right of classified employees of the Board of Regents to the procedures and protections set forth in article twenty-six-b, chapter eighteen of this code.
(e) Notwithstanding any provision of this code to the contrary the secretary of each department with authority over programs which are payors for prescription drugs, including but not limited to, the Public Employees Insurance Agency, the Children's Health Insurance Program, the Division of Corrections, the Division of Juvenile Services, the Regional Jail and Correctional Facility Authority, the Workers' Compensation Fund, state colleges and universities, public hospitals, state or local institutions such as nursing homes, veteran's homes, the Division of Rehabilitation, public health departments and the Bureau of Medical Services or other programs which are payors for prescription drugs, shall cooperate with the Office of the Pharmaceutical Advocate established pursuant to section four, article sixteen-d, chapter five of this code for the purpose of purchasing prescription drugs for any program over which they have authority.
CHAPTER 29. MISCELLANEOUS BOARDS AND COMMISSIONS.

ARTICLE 22. STATE LOTTERY ACT.
§29-22-18a. State Excess Lottery Revenue Fund.
(a) There is continued a special revenue fund within the State Lottery Fund in the State Treasury which is designated and known as the "State Excess Lottery Revenue Fund." The Fund consists of all appropriations to the Fund and all interest earned from investment of the Fund and any gifts, grants or contributions received by the Fund. All revenues received under the provisions of sections ten-b and ten-c, article twenty-two-a of this chapter and under article twenty-two-b of this chapter, except the amounts due the Commission under section 29-22B-1408(a)(1) of this chapter, shall be deposited in the State Treasury and placed into the "State Excess Lottery Revenue Fund." The revenue shall be disbursed in the manner provided in this section for the purposes stated in this section and shall not be treated by the Auditor and the State Treasurer as part of the general revenue of the state.
(b) For the fiscal year beginning the first day of July, two thousand two, the Commission shall deposit: (1) Sixty-five million dollars into the subaccount of the State Excess Lottery Revenue Fund hereby created in the State Treasury to be known as the "General Purpose Account" to be expended pursuant to appropriation of the Legislature; (2) ten million dollars into the Education Improvement Fund for appropriation by the Legislature to the "Promise Scholarship Fund" created in section seven, article seven, chapter eighteen-c of this code; (3) nineteen million dollars into the Economic Development Project Fund created in subsection (d) of this section for the issuance of revenue bonds and to be spent in accordance with the provisions of said subsection; (4) twenty million dollars into the School Building Debt Service Fund created in section six, article nine-d, chapter eighteen of this code for the issuance of revenue bonds; (5) forty million dollars into the West Virginia Infrastructure Fund created in section nine, article fifteen-a, chapter thirty-one of this code, to be spent in accordance with the provisions of said article; (6) ten million dollars into the Higher Education Improvement Fund for higher education; and (7) five million dollars into the State Park Improvement Fund for park improvements. For the fiscal year beginning the first day of July, two thousand three, the Commission shall deposit: (1) Sixty-five million dollars into the General Purpose Account to be expended pursuant to appropriation of the Legislature; (2) seventeen million dollars into the Education Improvement Fund for appropriation by the Legislature to the "Promise Scholarship Fund" created in section seven, article seven, chapter eighteen-c of this code; (3) nineteen million dollars into the Economic Development Project Fund created in subsection (d) of this section for the issuance of revenue bonds and to be spent in accordance with the provisions of said subsection; (4) twenty million dollars into the School Building Debt Service Fund created in section six, article nine-d, chapter eighteen of this code for the issuance of revenue bonds; (5) forty million dollars into the West Virginia Infrastructure Fund created in section nine, article fifteen-a, chapter thirty-one of this code, to be spent in accordance with the provisions of said article; (6) ten million dollars into the Higher Education Improvement Fund for higher education; and (7) five million dollars into the State Park Improvement Fund for park improvements.
(c) For the fiscal year beginning the first day of July, two thousand four, and subsequent fiscal years, the Commission shall deposit: (1) Sixty-five million dollars into the General Purpose Account to be expended pursuant to appropriation of the Legislature; (2) twenty-seven million dollars into the Education Improvement Fund for appropriation by the Legislature to the "Promise Scholarship Fund" created in section seven, article seven, chapter eighteen-c of this code; (3) nineteen million dollars into the Economic Development Project Fund created in subsection (d) of this section for the issuance of revenue bonds and to be spent in accordance with the provisions of said subsection; (4) nineteen million dollars into the School Building Debt Service Fund created in section six, article nine-d, chapter eighteen of this code for the issuance of revenue bonds; (5) forty million dollars into the West Virginia Infrastructure Fund created in section nine, article fifteen-a, chapter thirty-one of this code to be spent in accordance with the provisions of said article; (6) ten million dollars into the Higher Education Improvement Fund for higher education; and (7) five million dollars into the State Park Improvement Fund for park improvements. No portion of the distributions made as provided in this subsection and subsection (b) of this section, except distributions made in connection with bonds issued under subsection (d) of this section, may be used to pay debt service on bonded indebtedness until after the Legislature expressly authorizes issuance of the bonds and payment of debt service on the bonds through statutory enactment or the adoption of a concurrent resolution by both houses of the Legislature. Until subsequent legislative enactment or adoption of a resolution that expressly authorizes issuance of the bonds and payment of debt service on the bonds with funds distributed under this subsection and subsection (b) of this section, except distributions made in connection with bonds issued under subsection (d) of this section, the distributions may be used only to fund capital improvements that are not financed by bonds and only pursuant to appropriation of the Legislature.
(d) The Legislature finds and declares that in order to attract new business, commerce and industry to this state, to retain existing business and industry providing the citizens of this state with economic security and to advance the business prosperity of this state and the economic welfare of the citizens of this state, it is necessary to provide public financial support for constructing, equipping, improving and maintaining economic development projects, capital improvement projects and infrastructure which promote economic development in this state.
(1) The West Virginia Economic Development Authority created and provided for in article fifteen, chapter thirty-one of this code shall, by resolution, in accordance with the provisions of this article and article fifteen, chapter thirty-one of this code, and upon direction of the Governor, issue revenue bonds of the Economic Development Authority in no more than two series to pay for all or a portion of the cost of constructing, equipping, improving or maintaining projects under this section or to refund the bonds at the discretion of the Authority. Any revenue bonds issued on or after the first day of July, two thousand two, which are secured by state excess lottery revenue proceeds shall mature at a time or times not exceeding thirty years from their respective dates. The principal of, and the interest and redemption premium, if any, on the bonds shall be payable solely from the special fund provided in this section for the payment.
(2) There is continued in the State Treasury a special revenue fund named the "Economic Development Project Fund" into which shall be deposited on and after the first day of July, two thousand two, the amounts to be deposited in said Fund as specified in subsections (b) and (c) of this section. The Economic Development Project Fund shall consist of all such moneys, all appropriations to the Fund, all interest earned from investment of the Fund and any gifts, grants or contributions received by the Fund. All amounts deposited in the Fund shall be pledged to the repayment of the principal, interest and redemption premium, if any, on any revenue bonds or refunding revenue bonds authorized by this section, including any and all commercially customary and reasonable costs and expenses which may be incurred in connection with the issuance, refunding, redemption or defeasance thereof. The West Virginia Economic Development Authority may further provide in the resolution and in the trust agreement for priorities on the revenues paid into the Economic Development Project Fund as may be necessary for the protection of the prior rights of the holders of bonds issued at different times under the provisions of this section. The bonds issued pursuant to this subsection shall be separate from all other bonds which may be or have been issued from time to time under the provisions of this article.
(3) After the West Virginia Economic Development Authority has issued bonds authorized by this section and after the requirements of all funds have been satisfied, including any coverage and reserve funds established in connection with the bonds issued pursuant to this subsection, any balance remaining in the Economic Development Project Fund may be used for the redemption of any of the outstanding bonds issued under this subsection which, by their terms, are then redeemable or for the purchase of the outstanding bonds at the market price, but not to exceed the price, if any, at which redeemable, and all bonds redeemed or purchased shall be immediately canceled and shall not again be issued.
(4) Bonds issued under this subsection shall state on their face that the bonds do not constitute a debt of the State of West Virginia; that payment of the bonds, interest and charges thereon cannot become an obligation of the State of West Virginia; and that the bondholders' remedies are limited in all respects to the "special revenue fund" established in this subsection for the liquidation of the bonds.
(5) The West Virginia Economic Development Authority shall expend the bond proceeds from the revenue bond issues authorized and directed by this section for such projects as may be certified under the provision of this subsection: Provided, That the bond proceeds shall be expended in accordance with the requirements and provisions of article five-a, chapter twenty-one of this code and either article twenty-two or twenty-two-a, chapter five of this code, as the case may be: Provided, however, That if such bond proceeds are expended pursuant to article twenty-two-a, chapter five of this code and if the design-build board created under said article determines that the execution of a design-build contract in connection with a project is appropriate pursuant to the criteria set forth in said article and that a competitive bidding process was used in selecting the design builder and awarding such contract, such determination shall be conclusive for all purposes and shall be deemed to satisfy all the requirements of said article.
(6) For the purpose of certifying the projects that will receive funds from the bond proceeds, a committee is hereby established and comprised of the Governor, or his or her designee, the Secretary of the Department of tax and Revenue, the Executive Director of the West Virginia Development Office and six persons appointed by the Governor: Provided, That at least one citizen member must be from each of the state's three congressional districts. The committee shall meet as often as necessary and make certifications from bond proceeds in accordance with this subsection. The committee shall meet within thirty days of the effective date of this section.
(7) Applications for grants submitted on or before the first day of July, two thousand two, shall be considered refiled with the committee. Within ten days from the effective date of this section as amended in the year two thousand three, the lead applicant shall file with the committee any amendments to the original application that may be necessary to properly reflect changes in facts and circumstances since the application was originally filed with the committee.
(8) When determining whether or not to certify a project, the committee shall take into consideration the following:
(A) The ability of the project to leverage other sources of funding;
(B) Whether funding for the amount requested in the grant application is or reasonably should be available from commercial sources;
(C) The ability of the project to create or retain jobs, considering the number of jobs, the type of jobs, whether benefits are or will be paid, the type of benefits involved and the compensation reasonably anticipated to be paid persons filling new jobs or the compensation currently paid to persons whose jobs would be retained;
(D) Whether the project will promote economic development in the region and the type of economic development that will be promoted;
(E) The type of capital investments to be made with bond proceeds and the useful life of the capital investments; and
(F) Whether the project is in the best interest of the public.
(9) No grant may be awarded to an individual or other private person or entity. Grants may be awarded only to an agency, instrumentality or political subdivision of this state or to an agency or instrumentality of a political subdivision of this state.
The project of an individual or private person or entity may be certified to receive a low-interest loan paid from bond proceeds. The terms and conditions of the loan, including, but not limited to, the rate of interest to be paid and the period of the repayment, shall be determined by the Economic Development Authority after considering all applicable facts and circumstances.
(10) Prior to making each certification, the committee shall conduct at least one public hearing, which may be held outside of Kanawha County. Notice of the time, place, date and purpose of the hearing shall be published in at least one newspaper in each of the three congressional districts at least fourteen days prior to the date of the public hearing.
(11) The committee may not certify a project unless the committee finds that the project is in the public interest and the grant will be used for a public purpose. For purposes of this subsection, projects in the public interest and for a public purpose include, but are not limited to:
(A) Sports arenas, fields parks, stadiums and other sports and sports-related facilities;
(B) Health clinics and other health facilities;
(C) Traditional infrastructure, such as water and wastewater treatment facilities, pumping facilities and transmission lines;
(D) State-of-the-art telecommunications infrastructure;
(E) Biotechnical incubators, development centers and facilities;
(F) Industrial parks, including construction of roads, sewer, water, lighting and other facilities;
(G) Improvements at state parks, such as construction, expansion or extensive renovation of lodges, cabins, conference facilities and restaurants;
(H) Railroad bridges, switches and track extension or spurs on public or private land necessary to retain existing businesses or attract new businesses;
(I) Recreational facilities, such as amphitheaters, walking and hiking trails, bike trails, picnic facilities, restrooms, boat docking and fishing piers, basketball and tennis courts, and baseball, football and soccer fields;
(J) State-owned buildings that are registered on the national register of historic places;
(K) Retail facilities, including related service, parking and transportation facilities, appropriate lighting, landscaping and security systems to revitalize decaying downtown areas; and
(L) Other facilities that promote or enhance economic development, educational opportunities or tourism opportunities thereby promoting the general welfare of this state and its residents.
(12) Prior to the issuance of bonds under this subsection, the committee shall certify to the Economic Development Authority a list of those certified projects that will receive funds from the proceeds of the bonds. Once certified, the list may not thereafter be altered or amended other than by legislative enactment.
(13) If any proceeds from sale of bonds remain after paying costs and making grants and loans as provided in this subsection, the surplus may be deposited in an account created in the State Treasury to be known as the "Economic Development Project Bridge Loan Fund" to be administered by the Economic Development Authority created in article fifteen, chapter thirty-one of this code. Expenditures from the Fund are not authorized from collections but are to be made only in accordance with appropriation by the Legislature and in accordance with the provisions of article three, chapter twelve of this code and upon fulfillment of the provisions of article two, chapter five-a of this code. Loan repayment amounts, including the portion attributable to interest shall be paid into the Fund created in this subdivision.
(e) If the Commission receives revenues in an amount that is not sufficient to fully comply with the requirements of subsections (b), (c) and (h) of this section, the Commission shall first make the distribution to the Economic Development Project Fund; second, make the distribution or distributions to the other funds from which debt service is to be paid; third, make the distribution to the Education Improvement Fund for appropriation by the Legislature to the Promise Scholarship Fund; and fourth, make the distribution to the General Purpose Account: Provided, That, subject to the provisions of this subsection, to the extent such revenues are not pledged in support of revenue bonds which are or may be issued from time to time under this section, the revenues shall be distributed on a pro rata basis.
(f) For the fiscal year beginning on the first day of July, two thousand two, and each fiscal year thereafter, the Commission shall, after meeting the requirements of subsections (b), (c) and (h) of this section and after transferring to the State Lottery Fund created under section eighteen of this article an amount equal to any transfer from the State Lottery Fund to the Excess Lottery Fund pursuant to subsection (f), section eighteen of this article, deposit fifty percent of the amount by which annual gross revenue deposited in the State Excess Lottery Revenue Fund exceeds two hundred twenty-five million dollars in a fiscal year in a separate account in the State Lottery Fund to be available for appropriation by the Legislature.
(g) When bonds are issued for projects under subsection (d) of this section or for the School Building Authority, infrastructure, higher education or park improvement purposes described in this section that are secured by profits from lotteries deposited in the State Excess Lottery Revenue Fund, the Lottery Director shall allocate first to the Economic Development Project Fund an amount equal to one tenth of the projected annual principal, interest and coverage requirements on any and all revenue bonds issued, or to be issued, on or after the first day of July, two thousand two, as certified to the Lottery Director; and second, to the fund or funds from which debt service is paid on bonds issued under this section for the School Building Authority, infrastructure, higher education and park improvements an amount equal to one tenth of the projected annual principal, interest and coverage requirements on any and all revenue bonds issued, or to be issued, on or after the first day of April, two thousand two, as certified to the Lottery Director. In the event there are insufficient funds available in any month to transfer the amounts required pursuant to this subsection, the deficiency shall be added to the amount transferred in the next succeeding month in which revenues are available to transfer the deficiency.
(h) In fiscal year two thousand four and thereafter, prior to the distributions provided in subsection (c) of this section, the Lottery Commission shall deposit into the General Revenue Fund amounts necessary to provide reimbursement for the refundable credit allowable under section twenty-one, article twenty-one, chapter eleven of this code.
(i) (1) The Legislature considers the following as priorities in the expenditure of any surplus revenue funds:
(A) Providing salary and/or increment increases for professional educators and public employees;
(B) Providing adequate funding for the Public Employees Insurance Agency; and
(C) Providing funding to help address the shortage of qualified teachers and substitutes in areas of need, both in number of teachers and in subject matter areas.
(2) The provisions of this subsection may not be construed by any court to require any appropriation or any specific appropriation or level of funding for the purposes set forth in this subsection.
(j) The Legislature further directs the governor to focus resources on the creation of a prescription drug program for senior citizens by pursuing a medicaid waiver to offer prescription drug services to senior citizens; by investigating the establishment of purchasing agreements with other entities to reduce costs; by providing discount prices or rebate programs for seniors; by coordinating programs offered by pharmaceutical manufacturers that provide reduced cost or free drugs; by coordinating a collaborative effort among all state agencies to ensure the most efficient and cost effective program possible for the senior citizens of this state; and by working closely with the state's congressional delegation to ensure that a national program is implemented. The Legislature further directs that the governor report his progress back to the joint committee on government and finance on an annual basis beginning in November of the year two thousand one until a comprehensive program has been fully implemented.


NOTE: The purpose of this bill would implement the recommendations of the West Virginia Pharmaceutical Cost Council created during the 2004 regular session of the Legislature. These recommendations include the creation of the Office of the Pharmaceutical Advocate. This Office would be headed by a Pharmaceutical Advocate. This would be a cabinet level position with managerial and administrative duties over the Office. An advisory council to be known as the Pharmaceutical Advocate Advisory Council is also created to offer input and guidance to the Office and the Pharmaceutical Advocate. The Office would have the sole responsibility for the purchase of prescription drugs for all state entities and agencies who are payors for prescription drugs. Other qualified entities may also be permitted to participate in certain programs under the direction of the Pharmaceutical Advocate.
This bill would also transfer all power currently vested in other state entities for the purchase of prescription drugs to the Office of the Pharmaceutical Advocate. The bill repeals the West Virginia Pharmaceutical Cost Council and vests in the Office of the Pharmaceutical Advocate most of the powers of that body.

Strike-throughs indicate language that is to be stricken from the present law and underscoring indicates new language that would be added.

§§5-16D-1 through -30 are new; therefore, strike-throughs and underscoring have been omitted.
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