Senate Bill No. 149
(By Senators Hunter, White, Rowe, Unger, Dempsey and Love)
____________
[Introduced January 13, 2003; referred to the Committee on Health
and Human Resources; and then to the Committee on Finance.]
____________
A BILL to amend chapter sixteen of the code of West Virginia, one
thousand nine hundred thirty-one, as amended, by adding
thereto a new article, designated article twenty-nine-c,
relating to the "prescription drug 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.
As used in this article:
(1) "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);
(2) "Pharmacy discount rate" means the maximum retail price
minus the rate of medical assistance available to an eligible
participant for a particular drug;
(3) "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);
(4) "Prescription drug" means a prescription drug manufactured by a manufacturer that enters into a rebate agreement pursuant to
the provisions of this article;
(5) "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; and
(6) "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) of this section.
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; and
(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 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 does not revert to the
state treasury but shall remain in this fund and may be used only
in a manner consistent with this article.
(d) Moneys received into the fund may 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 U.S.C. §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 U.S.C. §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 five, a
participating retail pharmacy shall offer the initial discounted
price.
(d) No later than the first day of October, two thousand five,
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 shall 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 six, payment
shall 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 four, 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 six, 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.