Senate Bill sb0690
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2001 SB 690
By Senator Mitchell
4-159B-01
1 A bill to be entitled
2 An act relating to prescription drugs; creating
3 the "Prescription Drug Fair Pricing Act";
4 providing legislative findings and purpose;
5 providing definitions; creating the
6 Reduced-Cost Prescription Program within the
7 Agency for Health Care Administration;
8 requiring drug manufacturers and labelers that
9 sell prescription drugs through any
10 state-funded program to enter into a rebate
11 agreement with the agency and make certain
12 rebate payments to state agencies; requiring
13 that the Secretary of Health Care
14 Administration negotiate the amount of the
15 rebate; requiring retail pharmacies to provide
16 a discount for drugs covered by the program and
17 sold to program participants; requiring that
18 the agency establish the discounted prices;
19 providing program eligibility for state
20 residents who do not have coverage for
21 prescription drugs under any health insurance
22 plan or public program; providing for an annual
23 enrollment fee; requiring retail pharmacies to
24 disclose the amount of savings to program
25 participants; requiring that the agency
26 reimburse retail pharmacies for discounted
27 prices; providing a procedure for resolving any
28 discrepancy in the rebate amount; requiring
29 that the agency annually report to the
30 Legislature on the Reduced-Cost Prescription
31 Program; providing rulemaking authority;
1
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2001 SB 690
4-159B-01
1 authorizing the agency to apply for federal
2 waivers necessary to administer the program;
3 providing an appropriation; providing an
4 effective date.
5
6 Be It Enacted by the Legislature of the State of Florida:
7
8 Section 1. Prescription Drug Fair Pricing Act.--
9 (1) SHORT TITLE.--This section may be cited as the
10 "Prescription Drug Fair Pricing Act."
11 (2) FINDINGS AND PURPOSE.--
12 (a) The Legislature finds that:
13 1. Uninsured residents of this state pay excessive
14 prices for prescription drugs. In many cases, excessive drug
15 prices deny residents access to medically necessary health
16 care, and thereby threaten their health and safety. Many
17 residents are admitted to or treated at hospitals each year
18 because they cannot afford drugs prescribed for them that
19 could have prevented the need for hospitalization. Many others
20 must enter expensive institutional care settings because they
21 cannot afford the necessary prescription drugs that could have
22 supported them outside of an institution. All residents of
23 this state are threatened by the possibility that when they
24 need medically necessary prescription drugs most, they may be
25 unable to afford their doctor's recommended treatment.
26 2. Residents of this state and other Americans pay the
27 highest prices in the world for prescription drugs, prices
28 that result in extremely high profits for drug companies.
29 Excessive pricing for prescription drugs undermines the
30 economy of this state by diminishing the ability of its
31 residents to contribute as employees and employers.
2
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2001 SB 690
4-159B-01
1 (b) The purpose of this section is to make
2 prescription drugs more affordable for state residents,
3 thereby increasing the overall health of our families;
4 benefiting employers, employees, and the fiscal strength of
5 our society; promoting healthy communities; and improving the
6 public health and welfare.
7 (3) DEFINITIONS.--As used in this section, the term:
8 (a) "Agency" means the Agency for Health Care
9 Administration.
10 (b) "Labeler" means a person or entity that receives
11 prescription drugs from a manufacturer or wholesaler and
12 repackages those drugs for later retail sale and that has a
13 labeler code from the Federal Food and Drug Administration
14 under section 207.20 of Title 21 of the Code of Federal
15 Regulations.
16 (c) "Manufacturer" means a manufacturer of
17 prescription drugs and includes a subsidiary or affiliate of a
18 manufacturer.
19 (d) "Retail pharmacy" means a business that is
20 licensed to dispense prescription drugs in this state and that
21 dispenses drugs covered by a rebate agreement under the
22 Reduced-Cost Prescription Program.
23 (e) "Secretary" means the Secretary of Health Care
24 Administration or the secretary's designee.
25 (4) REDUCED-COST PRESCRIPTION PROGRAM.--
26 (a) The Reduced-Cost Prescription Program is
27 established within the agency to provide discounted
28 prescription drug prices to uninsured residents of this state.
29 (b) Any drug manufacturer or labeler that sells
30 prescription drugs in this state through any program funded or
31 operated by the state shall enter into a rebate agreement with
3
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2001 SB 690
4-159B-01
1 the agency for the Reduced-Cost Prescription Program. The
2 rebate agreement must require the manufacturer or labeler to
3 make rebate payments to the appropriate state agency each
4 calendar quarter according to a schedule established by the
5 department.
6 (c) The secretary shall negotiate the amount of the
7 rebate required from a manufacturer or labeler in accordance
8 with this subsection.
9 1. The secretary shall take into consideration the
10 rebate calculated under the Medicaid Rebate Program pursuant
11 to section 1396r-8 of Title 42 of the United States Code, the
12 average wholesale price of prescription drugs, and any other
13 information with respect to prescription drug prices and price
14 discounts.
15 2. The secretary shall use his or her best efforts to
16 obtain an initial rebate amount equal to or greater than the
17 rebate calculated under the Medicaid program pursuant to
18 section 1396r-8 of Title 42 of the United States Code.
19 3. With respect to the rebate taking effect no later
20 than July 1, 2002, the secretary shall use his or her best
21 efforts to obtain an amount equal to or greater than the
22 amount of any discount, rebate, or price reduction for
23 prescription drugs provided to the Federal Government.
24 (d) A retail pharmacy shall discount the price of
25 drugs covered by the Reduced-Cost Prescription Program and
26 sold to program participants.
27 1. The agency shall establish discounted prices for
28 drugs covered by a rebate agreement and shall promote the use
29 of efficacious and reduced-cost drugs, taking into
30 consideration reduced prices for state and federally capped
31
4
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2001 SB 690
4-159B-01
1 drug programs, differential dispensing fees, administrative
2 overhead, and incentive payments.
3 2. Beginning January 1, 2002, a retail pharmacy shall
4 offer prescription drugs at or below the average wholesale
5 price, minus 6 percent, plus the dispensing fee provided under
6 the state Medicaid program. These initial price levels shall
7 be specified by the secretary. The average wholesale price is
8 the wholesale price charged on a specific commodity that is
9 assigned by the drug manufacturer and is listed in a
10 nationally recognized drug-pricing file.
11 3. No later than July 1, 2002, a retail pharmacy shall
12 offer prescription drugs at or below the initial price levels
13 specified in subparagraph 2., minus the amount of any rebate
14 paid by the state to the retail pharmacy, plus the dispensing
15 fee provided under the state Medicaid program. The secretary
16 shall specify the discounted price levels. In determining the
17 discounted price levels, the secretary shall consider an
18 average of all rebates weighted by sales of drugs subject to
19 these rebates over the most recent 12-month period for which
20 the information is available.
21 (e)1. Any resident of the state who does not have
22 coverage for prescription drugs under any health insurance
23 plan or under any public program may participate in the
24 Reduced-Cost Prescription Program. The agency shall establish
25 simplified procedures for determining eligibility and issuing
26 enrollment cards to eligible residents. The agency shall
27 undertake outreach efforts to build public awareness of the
28 program and maximize enrollment by eligible residents. The
29 agency may adjust the requirements and terms of the
30 Reduced-Cost Prescription Program to accommodate any new
31 federally funded prescription drug programs.
5
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2001 SB 690
4-159B-01
1 2. Each fiscal year, the agency shall establish an
2 annual enrollment fee for the Reduced-Cost Prescription
3 Program, which may not exceed $50. An eligible resident must
4 pay the enrollment fee before enrolling in the program.
5 (f)1. The agency shall adopt rules requiring that
6 retail pharmacies disclose to program participants the amount
7 of savings provided as a result of the program. The rules
8 shall protect proprietary information.
9 2. The agency may not impose transaction charges on
10 retail pharmacies that submit claims or receive payments under
11 the Reduced-Cost Prescription Program.
12 3. A retail pharmacy shall submit claims to the agency
13 to verify the amount charged to program participants.
14 4. On a weekly or biweekly basis, the agency shall
15 reimburse a retail pharmacy for discounted prices provided to
16 program participants.
17 5. The agency shall collect from the retail pharmacy
18 any data that is necessary to calculate the amount of the
19 rebate from the manufacturer or labeler. The agency shall
20 protect the confidentiality of all information subject to
21 confidentiality protection under state or federal law or rule.
22 (g) The name of any manufacturer or labeler that does
23 not enter into a rebate agreement as provided in paragraph
24 (4)(c) is public information and the department shall release
25 this information to the public. The agency shall impose
26 requirements for prior authorization under the Medicaid
27 program, as permitted by law, for dispensing prescription
28 drugs provided by a manufacturer or labeler that does not
29 enter into a rebate agreement.
30 (h) Any discrepancy in the rebate amount must be
31 resolved as provided in this paragraph.
6
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2001 SB 690
4-159B-01
1 1. If there is a discrepancy in the manufacturer's or
2 labeler's favor between the amount claimed by a pharmacy and
3 the amount rebated by the manufacturer or labeler, the agency,
4 at the agency's expense, may hire a mutually agreed-upon
5 independent auditor. If a discrepancy exists following the
6 audit, the manufacturer or labeler shall justify the reason
7 for the discrepancy or make payment to the agency for any
8 additional amount due.
9 2. If there is a discrepancy against the interest of
10 the manufacturer or labeler in the information provided by the
11 agency to the manufacturer or labeler regarding the
12 manufacturer's or labeler's rebate, the manufacturer or
13 labeler, at the manufacturer's or labeler's expense, may hire
14 a mutually agreed-upon independent auditor to verify the
15 accuracy of the data supplied to the agency. If a discrepancy
16 exists following the audit, the agency shall justify the
17 reason for the discrepancy or refund to the manufacturer any
18 excess payment made by the manufacturer or labeler.
19 3. Following the procedures established in
20 subparagraph 1. or subparagraph 2., the agency or the
21 manufacturer or labeler may request a hearing. Supporting
22 documentation must accompany the request for a hearing.
23 (i) By January 15 of each year, the agency shall
24 submit a report to the Legislature on the enrollment and
25 financial status of the Reduced-Cost Prescription Program.
26 (j) In administering this section, the agency may
27 coordinate with other governmental programs and may take
28 actions to enhance efficiency, reduce the cost of prescription
29 drugs, and maximize the benefits of this and other
30 governmental programs, including providing the benefits of the
31
7
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2001 SB 690
4-159B-01
1 Reduced-Cost Prescription Program to the beneficiaries of
2 other programs.
3 (k) The agency may adopt rules for administering this
4 program.
5 (l) The agency may apply for any waiver of federal law
6 or rule which is necessary to administer this program.
7 Section 2. (1) The sum of $115,451,530 is
8 appropriated from the Grants and Donations Trust Fund in the
9 Agency for Health Care Administration for the purpose of
10 paying the administrative costs and meeting the cash-flow
11 requirements of the Reduced-Cost Prescription Program during
12 the 2001-2002 fiscal year.
13 (2) The annual enrollment fee for participants in the
14 Reduced-Cost Prescription Program for the 2001-2002 fiscal
15 year is $36.
16 Section 3. This act shall take effect July 1, 2001.
17
18 *****************************************
19 SENATE SUMMARY
20 Creates the "Prescription Drug Fair Pricing Act."
Establishes the Reduced-Cost Prescription Program within
21 the Agency for Health Care Administration. Requires drug
manufacturers and labelers that sell prescription drugs
22 through state programs to pay certain rebates to those
programs. Provides for the Secretary of Health Care
23 Administration to negotiate the rebate amounts. Requires
that retail pharmacies provide a discount for drugs that
24 are covered under the program and sold to program
participants. Provides for program eligibility for state
25 residents who do not have coverage for prescription drugs
under any health insurance plan or public program.
26 Requires participants in the program to pay an annual
enrollment fee, which may not exceed $50. Requires that
27 the agency reimburse retail pharmacies for discounted
prices. Requires that the agency report to the
28 Legislature on the Reduced-Cost Prescription Program.
(See bill for details.)
29
30
31
8
CODING: Words stricken are deletions; words underlined are additions.