Senate Bill No. 414
(By Senator Hunter, Unger, Redd, Burnette, Love, Kessler,
Minard, Caldwell, Edgell, Rowe, Deem, Ross, Fanning and
Bailey)
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[Introduced January 25, 2002; referred to the Committee
on Health and Human Resources; and then to the Committee on
Finance.]
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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 assistance project";
setting forth definitions; providing that the department of
health and human resources request a waiver of federal law;
providing for eligibility criteria; providing for fees and
a copayment schedule; creating 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; providing for a
rebate agreement with drug manufacturers; providing for a
rebate amount; providing for discounted prices for
qualified residents; providing for the operation of the
program; providing that the department administer the
program and other medical and pharmaceutical assistance
programs; authorizing the department to coordinate with
other programs; requiring the department to propose
legislative rules to implement the program; and providing
for the drug rebate program.
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 ASSISTANCE PROJECT.
§16-29C-1. Definitions.
(a) "Medicare" means coverage under part A or part B of
Title XVIII of the federal Social Security Act (42 U.S.C. 1395
to 1395y);
(b) "Pharmacy discount rate" means the maximum retail price
minus the rate of medical assistance available to an eligible participant for a particular drug;
(c) "Poverty line" means the nonfarm federal poverty line
for the continental United States, as defined by the federal
department of labor under 42 U.S.C. 9902 (2);
(d) "Prescription drug" means a prescription drug
manufactured by a manufacturer that enters into a rebate
agreement pursuant to the provisions of this article;
(e) "Prescription order" means an order for a prescription
drug issued by the department which authorizes the purchase of
prescription drugs in excess of the financial limitations
otherwise provided for under the provisions of this article;
(f) "Department" means the department of health and human
resources.
§16-29C-2. Department to request waiver.
(a) The department shall request a waiver, under 42
U.S.C.1315 (a), of federal medicaid laws necessary to permit the
department to conduct a project to expand eligibility for
medical assistance to include individuals who meet the
requirements specified under subsection (b) of this section.
(b) Notwithstanding any provision of this code to the
contrary, a person who is a resident of this state, sixty-five
years of age or older, who is otherwise ineligible for medical
assistance, whose annual household income, as determined by the department, does not exceed one hundred eighty-five percent of
the poverty line for a family the size of the individual's
eligible family, who has not had available outpatient
prescription drug coverage from any source other than under
medical assistance for twelve months, and who pays the project
enrollment fee as provided in subsection (c) of this section is
eligible for medical assistance for the purposes of purchasing
a prescription drug by paying the amounts specified in
subsection (c). The person may apply to the department, on a
form provided by the department together with a program
enrollment fee payment, for a determination of eligibility and
issuance of a prescription drug card for purchase of
prescription drugs under the provisions of this article.
(c) Project participants shall pay all of the following:
(1) For each twelve-month benefit period, a project
enrollment fee of twenty-five dollars;
(2) For each twelve-month benefit period, a deductible paid
at the pharmacy discount rate that equals one of the following,
except that an individual with an annual household income, as
specified in subsection (b) of this section, that exceeds one
hundred ten percent but does not exceed one hundred thirty
percent of the federal poverty line, three hundred dollars;
(A) For an individual with an annual household income, as specified in subsection (b) of this section, that exceeds one
hundred thirty percent but does not exceed one hundred fifty-
five percent of the federal poverty line, six hundred dollars;
(B) For an individual with an annual household income, as
specified in subsection (b) of this section that exceeds one
hundred fifty-five percent but does not exceed one hundred
eighty-five percent of the federal poverty line, nine hundred
dollars.
(C) For an individual with an annual household income, as
specified in subsection (c) of this section, that is less than
one hundred ten percent of the federal poverty line and, after
payment of the deductible as provided for under subdivision (2),
subsection (c) of this section, all of the following:
(i) A copayment of ten dollars for each prescription drug
that bears only a generic name; and,
(ii) A copayment of twenty dollars for each prescription
drug that does not bear only a generic name.
(d) Under the project under subsection (c) of this section,
as a condition of participation by a pharmacy or pharmacist, the
pharmacy or pharmacist may not charge an individual who is
eligible for medical assistance under subsection (b) of this
section and who presents a valid prescription order an amount
for a prescription drug under the order that exceeds the amounts specified in subdivisions (2) and (3), subsection (c) of this
section.
(e) From the senior prescription drug fund, as provided in
section three of this article, the department shall pay the
pharmacy or pharmacist for a prescription drug purchased as
specified under subdivision (3), subsection (c) of this section,
the pharmacy discount rate amount for the drug, less copayments.
(f) The department may not implement the project under this
section unless all of the following apply:
(1) A waiver that is consistent with all the provisions of
this section is granted and in effect. If the department
receives the waiver, at the end of the period during which the
waiver remains in effect the department shall request any
available extension of the waiver;
(2) Sufficient state and federal funds for the project are
available.
(g) If a waiver, as specified under subdivision (1),
subsection (f), is granted, the department may not implement the
project under this section if a national prescription drug
benefit program for seniors is created that would provide
similar benefits to a similar population and unless the
department first submits a plan for project implementation that
is approved by a majority of the members of the Legislature.
§16-29C-3. 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;
(3) To receive revenue from manufacturers who pay rebates
as provided in section four 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 six 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 senior prescription drug
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 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-4. Rebate agreement.
A drug manufacturer 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-5. Rebate amount.
(a) The secretary of health and human resources shall
negotiate the amount of the rebate required from a manufacturer
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-6. 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-7. Operation of program.
(a) The requirements of this section apply to participating
retail pharmacies.
(b) The West Virginia board of pharmacy shall propose rules for legislative approval in accordance with 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 rule proposed for legislative
approval in accordance with 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 amount
of the rebate from the manufacturer. The department shall
protect the confidentiality of all information subject to
confidentiality protection under state or federal law, rule or
regulation.
§16-29C-8. Action with regard to nonparticipating
manufacturers.
The names of manufacturers 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 under chapter nine of this code, as
permitted by law, for the dispensing of prescription drugs
provided by those manufacturers.
§16-29C-9. Medical assistance programs.
The department of health and human resources shall
administer the program and other medical and pharmaceutical
assistance programs, as provided 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-10. Rule making.
The department shall propose rules for legislative approval
in accordance with article three, chapter twenty-nine-a of this
code to implement the provisions of this article.
§16-29C-11. Waivers.
The department may seek any waivers of federal law, rule or
regulation necessary to implement the provisions of this
article.
§16-29C-12. 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 interests of
recipients of the prescription drug price reduction program, it
shall report to the health and human resources committee of each
house of the Legislature and the finance committees of each
house 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 rules for legislative approval 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.
NOTE: The purpose of this bill is to provide for the
"prescription drug assistance project." In creating the program
the bill includes provisions that address the following:
Setting forth definitions; providing that the department of
health and human resources request a waiver of federal law;
providing for eligibility criteria; providing for fees and a
copayment schedule; 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; providing for a rebate agreement with drug
manufacturers; providing for a rebate amount; providing for
discounted prices for qualified residents; providing for the
operation of the program; providing that the department
administer the program and other medical and pharmaceutical
assistance programs; authorizing the department to coordinate
with other programs; requiring the department to propose
legislative rules to implement the program; and, providing for
the drug rebate program.
This article is new; therefore, strike-throughs and
underscoring have been omitted.