Senate Bill sb2098c1

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    Florida Senate - 2003                           CS for SB 2098

    By the Committee on Health, Aging, and Long-Term Care; and
    Senator Wasserman Schultz




    317-2484-03

  1                      A bill to be entitled

  2         An act relating to prescription drugs; creating

  3         s. 409.960, F.S.; providing a popular name;

  4         creating s. 409.962, F.S.; creating "The

  5         LifeSaver Rx Program"; providing purpose of the

  6         program; creating s. 409.964, F.S.; providing

  7         definitions; creating s. 409.966, F.S.;

  8         providing that the Secretary of Health Care

  9         Administration shall operate the LifeSaver Rx

10         Program as a state pharmaceutical assistance

11         program to provide discounts to participants

12         for prescription drugs covered by a rebate

13         agreement; providing that the secretary shall

14         negotiate discount prices or rebates for

15         prescription drugs from manufacturers or

16         labelers; providing that the Agency for Health

17         Care Administration shall contract with

18         participating retail pharmacies to deliver

19         discounted prices to program participants;

20         providing factors to be considered in

21         negotiating discounts or rebates; providing for

22         quarterly calculation of discounts; creating s.

23         409.968, F.S.; providing for calculation of

24         payment by program participants and the agency;

25         requiring participating retail pharmacies in

26         the state to charge the rate allowable under

27         the Medicaid program for prescription drugs

28         sold to program participants; providing for

29         rate of reimbursement of participating retail

30         pharmacies; creating s. 409.970, F.S.;

31         providing requirements for program eligibility;

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    Florida Senate - 2003                           CS for SB 2098
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 1         requiring the Agency for Health Care

 2         Administration to establish enrollment

 3         procedures; providing for an annual enrollment

 4         fee; providing for use of enrollment fees and

 5         rebates from drug manufacturers; creating s.

 6         409.972, F.S.; providing for operation of the

 7         program; authorizing the Board of Pharmacy to

 8         adopt certain rules; creating s. 409.974, F.S.;

 9         providing procedure for resolution of

10         discrepancies in rebate amounts; creating s.

11         409.976, F.S.; requiring an annual report;

12         creating s. 409.978, F.S.; authorizing

13         coordination with other programs; creating s.

14         409.980, F.S.; authorizing the agency to adopt

15         rules; creating s. 409.982, F.S.; authorizing

16         the agency to seek certain waivers; providing a

17         contribution by the agency toward the cost of

18         prescription drugs purchased by program

19         participants; amending s. 409.9066, F.S.;

20         requiring the Agency for Health Care

21         Administration to publish on a website the

22         average wholesale prices of drugs provided

23         through the program; requiring the agency to

24         publish additional information to assist

25         consumers; requiring a report on methods of

26         pricing pharmaceutical products purchased by

27         the program; providing an appropriation;

28         providing for severability; providing an

29         effective date.

30  

31  Be It Enacted by the Legislature of the State of Florida:

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    Florida Senate - 2003                           CS for SB 2098
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 1         Section 1.  Section 409.960, Florida Statutes, is

 2  created to read:

 3         409.960  Popular name.--Sections 409.960-409.982 shall

 4  be known by the popular name "LifeSaver Rx Program."

 5         Section 2.  Section 409.962, Florida Statutes, is

 6  created to read:

 7         409.962  LifeSaver Rx Program established; findings;

 8  purpose.--

 9         (1)  It is the finding of the Legislature that

10  approximately one in four residents of Florida have no

11  prescription drug insurance coverage or wholly inadequate

12  prescription drug insurance coverage. These uninsured

13  residents pay excessive prices for prescription drugs, far

14  higher prices than are paid by managed care organizations,

15  insurance companies, and the Federal Government for the same

16  medicines and dosages. In many cases, these excessive drug

17  prices have the effect of denying residents access to

18  medically necessary care, thereby threatening their health and

19  safety. Many Florida residents require repeated doctor or

20  medical clinic appointments, having become sicker because they

21  could not afford to purchase the prescription drugs prescribed

22  for them. Many residents are admitted to or treated at

23  hospitals each year because they cannot afford the

24  prescription drugs that could have prevented the need for

25  hospitalization. Many others enter expensive institutional

26  care settings because they cannot afford the necessary

27  prescription drugs that could have supported them outside of

28  an institution. In each of these circumstances, state medical

29  assistance programs, including the Medicaid program, literally

30  pay the price. One major reason uninsured residents pay such

31  high prices for prescription drugs is that, unlike insured

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    Florida Senate - 2003                           CS for SB 2098
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 1  residents, they have no prescription benefits manager

 2  negotiating a fair price with drug companies on their behalf.

 3  State government currently provides prescription drugs and

 4  acts as a prescription benefit manager through a variety of

 5  health plans and assistance programs and, in 2001, the

 6  Legislature expanded the state's role in negotiating better

 7  prescription drug prices for Medicaid. State government is the

 8  only agent that, as a practical matter, can play an effective

 9  role as a market participant on behalf of all residents who

10  are uninsured or underinsured. The state can and should act as

11  a prescription benefit manager, negotiating drug rebates and

12  using these funds to reimburse retail pharmacies for offering

13  lower drug prices.

14         (2)  Recognizing that the state already acts as a

15  prescription benefit manager for a variety of health plans and

16  assistance programs, including the Medicaid program, the

17  LifeSaver Rx Program is established within the Agency for

18  Health Care Administration. The purpose of the program is to

19  expand Medicaid eligibility for prescription drug benefits

20  only, at a level that does not exceed available funding,

21  thereby providing prescription drug coverage to new

22  populations by expanding the state's role as a participant in

23  the prescription drug marketplace, negotiating rebates from

24  drug companies, and using the funds from such rebates to make

25  prescription drugs more affordable to Florida residents. Each

26  program participant shall receive a discount toward the

27  purchase of all prescription drugs that are covered by the

28  Florida Medicaid program. The Legislature finds that such a

29  program will improve public health and welfare, promote the

30  economic strength of our society, and substantially benefit

31  

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    Florida Senate - 2003                           CS for SB 2098
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 1  state health assistance programs, including the Medicaid

 2  program.

 3         Section 3.  Section 409.964, Florida Statutes, is

 4  created to read:

 5         409.964  Definitions.--As used in this act, unless the

 6  context otherwise indicates, the term:

 7         (1)  "Agency" means the Agency for Health Care

 8  Administration.

 9         (2)  "Labeler" means an entity or person that receives

10  prescription drugs from a manufacturer or wholesaler and

11  repackages those drugs for later retail sale and that has a

12  labeler code from the federal Food and Drug Administration

13  under 21 C.F.R. s. 207.20 (1999).

14         (3)  "Manufacturer" means a manufacturer of

15  prescription drugs and includes a subsidiary or affiliate of a

16  manufacturer.

17         (4)  "Participating retail pharmacy" means a retail

18  pharmacy or other business licensed to dispense prescription

19  drugs in this state that:

20         (a)  Participates in the state Medicaid program; or

21         (b)  Agrees to participate in the LifeSaver Rx Program.

22         (5)  "Program" means the LifeSaver Rx Program.

23         (6)  "Secretary" means the Secretary of Health Care

24  Administration or the secretary's designee.

25         (7)  "Qualified resident" means an uninsured resident

26  of the state who has obtained from the agency a LifeSaver Rx

27  Program enrollment card.

28         Section 4.  Section 409.966, Florida Statutes, is

29  created to read:

30         409.966  Prescription drug discounts; negotiation of

31  discounts or rebates; calculation of discounts.--The secretary

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    Florida Senate - 2003                           CS for SB 2098
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 1  shall operate the program as a state pharmaceutical assistance

 2  program under 42 U.S.C. s. 1396r-8(c)(1)(C)(i)(III) to provide

 3  discounts to participants for prescription drugs covered by a

 4  rebate agreement.

 5         (1)  The secretary shall negotiate discount prices or

 6  rebates for prescription drugs from drug manufacturers and

 7  labelers for the program. Using sums from negotiated rebates,

 8  the agency shall contract with participating retail pharmacies

 9  to deliver discounted prices to program participants.

10         (2)  In negotiating discount or rebate terms, the

11  secretary shall take into consideration:

12         (a)  The rebate calculated under the Medicaid rebate

13  program pursuant to 42 U.S.C. s. 1396r-8;

14         (b)  The price provided to eligible entities under 42

15  U.S.C. s. 256b; and

16         (c)  Any other available information on prescription

17  drug prices, discounts, and rebates.

18         (3)  The secretary may consider any  supplemental

19  rebate negotiated pursuant to s. 409.912(38)(a)7.

20         (4)  The drug discounts received by program

21  participants shall be calculated by the secretary on a

22  quarterly basis.

23         Section 5.  Section 409.968, Florida Statutes, is

24  created to read:

25         409.968  Discounted prices for program participants.--

26         (1)  Each program participant's payment shall be equal

27  to the Medicaid allowable charge for the prescription minus

28  the payment made by the agency. The payment made by the agency

29  shall include the estimated manufacturer rebate plus the state

30  subsidy per prescription as provided under this act and the

31  

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    Florida Senate - 2003                           CS for SB 2098
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 1  federal matching share for the state general revenue

 2  contribution.

 3         (2)  A participating retail pharmacy shall charge the

 4  Medicaid allowable rate for prescription drugs sold to

 5  participants in the program.

 6         (3)  The participating retail pharmacy shall be

 7  reimbursed by the agency at the agency's manufacturer

 8  estimated rebate amount.

 9         (4)  The program as established in s. 409.962 is not an

10  entitlement.

11         Section 6.  Section 409.970, Florida Statutes, is

12  created to read:

13         409.970  Program eligibility.--

14         (1)  An individual is eligible to participate in the

15  program if he or she:

16         (a)  Is a resident of the state;

17         (b)  Is 65 years of age or older and is a Medicare

18  participant;

19         (c)  Has a net family income at or below 200 percent of

20  the federal poverty level in year 1 and at or below 300

21  percent of the federal poverty level in year 2 and thereafter;

22         (d)  Has exhausted all third-party prescription

23  coverage; and

24         (e)  Requests to be enrolled in the program.

25         (2)  An individual is ineligible to participate in the

26  program if he or she is eligible for assistance under the

27  state's Medicaid program.

28         (3)  The agency shall establish simple procedures for

29  enrolling program participants. Such procedures shall include

30  the assessment of an annual enrollment fee of up to $50 per

31  enrollee. The agency shall undertake outreach efforts to build

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    Florida Senate - 2003                           CS for SB 2098
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 1  public awareness of the program and maximize enrollment by

 2  eligible residents. Revenues generated from program enrollment

 3  fees and rebates from drug manufacturers shall be used for,

 4  but not be limited to, offsetting state costs to administer

 5  the program, the purchase of prescription drugs, and any

 6  public awareness campaigns.

 7         Section 7.  Section 409.972, Florida Statutes, is

 8  created to read:

 9         409.972  Program operation.--

10         (1)  The Board of Pharmacy, as created by s. 465.004,

11  in consultation with the agency, is authorized to adopt rules

12  pursuant to ss. 120.536(1) and 120.54 requiring disclosure by

13  participating retail pharmacies to program participants of the

14  amount of savings provided as a result of the program. Such

15  rules must protect information that is proprietary in nature.

16         (2)  Participating retail pharmacies shall be paid in

17  advance for program discounts or shall be reimbursed by the

18  agency on a weekly or biweekly basis, in accordance with

19  contracts between the agency and such businesses.

20         (3)  The agency shall collect from the participating

21  retail pharmacies utilization data necessary to calculate the

22  amount of the rebate from the manufacturer or labeler. The

23  agency shall protect the confidentiality of all information

24  subject to confidentiality protection under the laws of this

25  state or federal laws, rules, or regulations.

26         Section 8.  Section 409.974, Florida Statutes, is

27  created to read:

28         409.974  Discrepancies in rebate

29  amounts.--Discrepancies in rebate amounts must be resolved

30  using the process established in this section.

31  

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    Florida Senate - 2003                           CS for SB 2098
    317-2484-03




 1         (1)  If there is a discrepancy in the manufacturer's or

 2  labeler's favor between the amount claimed by a participating

 3  retail pharmacy and the amount rebated by the manufacturer or

 4  labeler, the agency, at the agency's expense, may hire a

 5  mutually agreed-upon independent auditor. If a discrepancy

 6  still exists following the audit, the manufacturer or labeler

 7  shall justify the reason for the discrepancy or make payment

 8  to the agency for any 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  still exists following the audit, the agency shall justify the

17  reason for the discrepancy or refund the manufacturer or

18  labeler.

19         (3)  Following the completion of procedures established

20  in subsection (1) or subsection (2), the agency, the

21  manufacturer, or the labeler may request a hearing. Hearings

22  shall be conducted pursuant to ss. 120.569 and 120.57.

23  Supporting documentation must accompany the request for a

24  hearing.

25         Section 9.  Section 409.976, Florida Statutes, is

26  created to read:

27         409.976  Report.--The agency shall provide a report on

28  the enrollment and financial status of the program to the

29  Governor, the President of the Senate, and the Speaker of the

30  House of Representatives by the second week in January each

31  year.

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    Florida Senate - 2003                           CS for SB 2098
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 1         Section 10.  Section 409.978, Florida Statutes, is

 2  created to read:

 3         409.978  Coordination with other programs.--The

 4  secretary shall combine drug pricing negotiations to maximize

 5  drug rebates when the secretary determines that the

 6  combination of such negotiations is beneficial to both the

 7  LifeSaver Rx Program and another state program, including the

 8  state Medicaid program.

 9         Section 11.  Section 409.980, Florida Statutes, is

10  created to read:

11         409.980  Rulemaking.--The agency is authorized to adopt

12  rules pursuant to ss. 120.536(1) and 120.54 to implement the

13  provisions of this act. Such rules shall include eligibility

14  requirements, limits on participation, benefit limitations, a

15  requirement for generic drug substitution, and other program

16  parameters comparable to those of the Medicaid program.

17         Section 12.  Section 409.982, Florida Statutes, is

18  created to read:

19         409.982  Waivers.--The agency shall seek any waivers of

20  federal law, rule, or regulation necessary to implement the

21  provisions of this act in year 1. In year 2 and thereafter,

22  the agency shall seek any additional waivers of federal law,

23  rule, or regulation necessary to implement the provisions of

24  this act.

25         Section 13.  The agency shall contribute toward the

26  cost of each prescription purchased by the program

27  participant.

28         Section 14.  Section 409.9066, Florida Statutes, is

29  amended to read:

30         409.9066  Medicare prescription discount program.--

31  

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    Florida Senate - 2003                           CS for SB 2098
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 1         (1)  As a condition of participation in the Florida

 2  Medicaid program or the pharmaceutical expense assistance

 3  program, a pharmacy must agree to charge any individual who is

 4  a Medicare beneficiary and who is a Florida resident showing a

 5  Medicare card when he or she presents a prescription, a price

 6  no greater than the cost of ingredients equal to the average

 7  wholesale price minus 9 percent, and a dispensing fee of

 8  $4.50.

 9         (2)  In lieu of the provisions of subsection (1), and

10  as a condition of participation in the Florida Medicaid

11  program or the pharmaceutical expense assistance program, a

12  pharmacy must agree to:

13         (a)  Provide a private voluntary prescription discount

14  program to state residents who are Medicare beneficiaries; or

15         (b)  Accept a private voluntary discount prescription

16  program from state residents who are Medicare beneficiaries.

17  

18  Discounts under this subsection must be at least as great as

19  discounts under subsection (1).

20         (3)  The Agency for Health Care Administration shall

21  publish, on a free website available to the public, the most

22  recent average wholesale prices for the 200 drugs most

23  frequently dispensed to the elderly and, to the extent

24  possible, shall provide a mechanism that consumers may use to

25  calculate the retail price that should be paid after the

26  discount required in subsection (1) is applied.

27         Section 15.  By January 1, 2004, the Agency for Health

28  Care Administration shall submit to the Legislature a report

29  regarding the cost-effectiveness of, and alternatives to,

30  using average wholesale price in the pricing of pharmaceutical

31  products purchased by the Medicaid program.

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    Florida Senate - 2003                           CS for SB 2098
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 1         Section 16.  The Legislature shall appropriate from the

 2  General Revenue Fund to the Agency for Health Care

 3  Administration an amount that is sufficient to implement the

 4  provisions of this act.

 5         Section 17.  If any provision of this act or the

 6  application thereof to any person or circumstance is held

 7  invalid, the invalidity shall not affect other provisions or

 8  applications of the act which can be given effect without the

 9  invalid provision or application, and to this end the

10  provisions of this act are declared severable.

11         Section 18.  This act shall take effect upon becoming a

12  law.

13  

14          STATEMENT OF SUBSTANTIAL CHANGES CONTAINED IN
                       COMMITTEE SUBSTITUTE FOR
15                         Senate Bill 2098

16                                 

17  This Committee Substitute for Senate Bill 2098 does the
    following:
18  
    Changes the income eligibility, requiring that an individual
19  have a net family income at or below 200 percent of the FPL in
    year one of the program and at or below 300 percent of the FPL
20  in year two and thereafter.

21  Removes the requirement of a two percent state contribution
    from general revenue for each prescription, but retains
22  language that a state contribution for prescriptions will be
    made.
23  
    Requires the Agency for Health Care Administration to publish
24  on its website the most recent average wholesale prices for
    the 200 drugs most frequently dispensed to the elderly and to
25  provide a mechanism for consumers to calculate the retail
    price that should be paid under the Medicare prescription
26  discount program. The agency is required to submit a report by
    January 1, 2004, regarding alternatives to using the average
27  wholesale price in pricing drugs purchased by the Medicaid
    Program.
28  

29  

30  

31  

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