Senate Bill No. 258
(By Senator Dittmar)
[Introduced January 30, 1996; referred to the Committee
on Health and Human Resources.]
A BILL to amend chapter thirty of the code of West Virginia, one
thousand nine hundred thirty-one, as amended, by adding
thereto a new article, designated article five-a,
relating to the equalization of pharmaceutical drug
prices; prohibition of price discrimination; state
acting as purchaser; exceptions; definitions; and
Be it enacted by the Legislature of West Virginia:
That chapter thirty of the code of West Virginia, one
thousand nine hundred thirty-one, as amended, be amended by
adding thereto a new article, designated article five-a, to read
ARTICLE 5A. PHARMACEUTICAL DRUG PRICE EQUALIZATION.
(a) "Charitable health care provider" means any health care
provider exempt from federal taxation as provided by section
501(c)(3) of the Internal Revenue Code and which provides health
care services to the public, a substantial portion of which are
provided free or at a reduced fee based on the patient's ability
(b) "Drug" means any substance subject to section 503(b)(1)
of the Federal Food, Drug and Cosmetic Act.
(c) "Manufacturer" means any person, other than a
wholesaler, who trades in drugs for resale, either directly or
through a wholesaler, to purchasers doing business in this state.
(d) "Purchaser" means any person doing business in this
state who engages in selling or dispensing drugs directly to
consumers in this state.
(e) "Secretary" means the secretary of the department of
health and human resources.
(f) "Seller" means any person who lawfully sells drugs to
purchasers, including, but not limited to, drug manufacturers and
(g) "Wholesaler" means any person other than a manufacturer
who sells drugs to purchasers.
§30-5A-2. Price discrimination prohibited.
(a) A seller shall offer drugs to any purchaser doing
business in this state to whom the seller sells or distributes on
the same terms and conditions which the seller offers to the most
favored purchaser doing business in this state during the same
time period, including:
(1) Transactions in which a manufacturer sells to a
purchaser through a contractual arrangement implemented by one or
(2) Purchase prices for similar volume purchases; and
(3) Rebates, free merchandise, samples and similar trade
(b) This section does not prohibit a seller from offering or
providing a discount, so long as the discount is made available
to all sellers on equal terms, including:
(1) Discounts justified by the economies of or efficiencies
resulting from volume purchases;
(2) Opportunities available to all sellers on equal terms
through market share movement agreements;
(3) Placing drugs on a formulary;
(4) Prompt payment; and
(5) Prompt delivery.
(c) No seller may provide discounts to any purchaser based
on the class of trade to which the purchaser belongs.
(d) This section applies to any purchase of drugs which is
delivered to a purchaser or purchaser's facility for sale to
consumers in this state.
(e) Nothing in this section is intended to create a single
price for prescription drugs or to eliminate existing discount
programs, as long as those programs adhere to the above
§30-5A-3. State as purchaser.
The state or any of its political subdivisions may not
purchase any drugs from a seller who engages in price
discrimination prohibited by this article, including transactions
in which a seller sells to the state through a contractual
arrangement implemented by one or more wholesalers. Beginning on
the first day of January, one thousand nine hundred ninety-seven,
any seller who sells drugs within this state shall submit to the
secretary, before the first day of January of each year, an affidavit stating that he or she will not engage in conduct
prohibited by this article.
For purposes of this article, the following are not
(a) The department of veterans' affairs, the department of
defense, entities defined under section 256b(a)(4) of the Public
Health Service Act, as amended, and any other federal, state or
local government program that directly procures pharmaceuticals;
(b) Hospitals which purchase drugs dispensed on the premises
solely for in-patient use. This subsection does not include
pharmaceuticals for resale or outpatient use; and
(c) Charitable health care providers, except those which
issue, offer, or administer a health insurance policy or an
employee benefit plan.
(a) Any seller who violates this article shall be fined not
less than one thousand dollars nor more than fifty thousand
dollars for each violation. When any person violates a provision
of this article, the attorney general shall bring an action in
the circuit court of Kanawha County to enforce the provisions of this article.
(b) Any purchaser may bring a civil action against any
seller to recover damages suffered as the result of a violation
of this article: Provided, That proof of price discrimination
constitutes prima facie evidence of damages. Damages awarded to
any such purchaser shall be trebled.
(c) The secretary shall declare ineligible for sale under
this state's medicaid program drug entities of any seller who
violates this article or any order issued by a circuit court.
The secretary may grant an exception in the case of a necessary
and unique drug not otherwise available which is provided by a
seller who has violated this article.
NOTE: The purpose of this bill is to equalize
pharmaceutical drug prices and provide penalties for violation of
This article is new; therefore, strike-throughs and
underscoring have been omitted.