HB 0977 2003
1	A bill to be entitled
2	An act relating to prescription drugs; providing a program
3	for fair market drug pricing in Florida, to be
4	administered by the Agency for Health Care Administration;
5	providing a popular name; providing findings and purpose;
6	providing definitions; providing for negotiated drug
7	discounts and rebates; requiring establishment of an Rx
8	Card program as a state pharmaceutical assistance program
9	for drugs covered by a rebate agreement; providing a
10	beginning date for Rx Card program discounts; providing
11	for resolution of discrepancies in rebate amounts;
12	requiring an annual report to the Legislature; providing
13	for coordination with other programs; requiring the agency
14	to adopt rules to implement the program; authorizing the
15	agency to seek waivers of federal laws, rules, or
16	regulations; providing for severability; providing an
17	effective date.
18
19	Be It Enacted by the Legislature of the State of Florida:
20
21	Section 1. Fair market drug pricing.--
22	(1) POPULAR NAME.--This section shall be known by the
23	popular name the "Florida Fair Market Drug Pricing Act."
24	(2) FINDINGS AND PURPOSE.--
25	(a) Findings.--The Legislature finds that:
26	1. The state has successfully negotiated supplemental
27	rebates on certain prescription drugs causing the state to
28	realize significant savings in the Medicaid program.
29	2. In this time of economic difficulty, Florida needs to
30	maximize its financial resources in order to provide as much
31	health coverage as possible for low-income residents. Now more
32	than ever, Florida needs to continue to lower the prices it pays
33	for prescription drugs.
34	3. Approximately one in four Florida residents are
35	uninsured or underinsured for prescription drug coverage and do
36	not qualify for Medicaid or the Silver Saver drug program which
37	is limited to residents at 120 percent of the federal poverty
38	level. The uninsured or underinsured residents pay excessive
39	prices for prescription drugs. In many cases, these excessive
40	prices have the effect of denying residents access to medically
41	necessary care, thereby threatening their health and safety.
42	4. Among these uninsured and underinsured residents, many
43	require repeated doctor or medical clinic appointments, having
44	gotten sicker because they cannot afford to take the drugs
45	prescribed for them. Many are admitted to or treated at
46	hospitals each year because they cannot afford the drugs
47	prescribed for them that could have prevented the need for
48	hospitalization. Many others enter expensive institutional care
49	settings because they cannot afford the prescription drugs that
50	could have supported them outside of an institution. In each of
51	these circumstances, uninsured and underinsured residents too
52	often become Medicaid recipients because of their inability to
53	afford prescription drugs. Therefore, helping secure lower drug
54	prices for the uninsured and underinsured directly benefits and
55	supports Medicaid.
56	5. The state government is the only agent that, as a
57	practical matter, can play an effective role as a market
58	participant on behalf of all residents who are uninsured,
59	underinsured, or Medicaid beneficiaries. The state already
60	provides drugs and acts as a prescription benefits manager for a
61	variety of programs, including Medicaid. The state should expand
62	this role to negotiate voluntary drug rebates, using these funds
63	to maintain and expand Medicaid services while offering lower
64	drug prices to the uninsured, including Medicare beneficiaries,
65	who do not qualify for Medicaid.
66	(b) Purpose.--Recognizing that the state already acts as a
67	prescription benefits manager for a variety of health plans and
68	assistance programs, the Legislature enacts this section to
69	cover new populations by expanding the state's role as a
70	participant in the prescription drug marketplace, negotiating
71	voluntary rebates from drug companies at the same or lower rates
72	as Medicaid, and making these discounted drugs available to all
73	residents who are in the Medicare program or have a net family
74	income at or below 300 percent of the federal poverty level and
75	are without any other adequate prescription drug coverage.
76	(3) DEFINITIONS.--As used in this section:
77	(a) "Secretary" means the Secretary of Health Care
78	Administration, or the secretary's designee.
79	(b) "Agency" means the Agency for Health Care
80	Administration.
81	(c) "Manufacturer" means a manufacturer of prescription
82	drugs as defined in 42 U.S.C. s. 1396r-8(k)(5), including a
83	subsidiary or affiliate of a manufacturer.
84	(d) "Labeler" means an entity or person that receives
85	prescription drugs from a manufacturer or wholesaler and
86	repackages those drugs for later retail sale and that has a
87	labeler code from the Food and Drug Administration under 21
88	C.F.R. s. 207.20 (1999).
89	(e) "Participating retail pharmacy" means a retail
90	pharmacy or other business licensed to dispense prescription
91	drugs in this state that participates in the state Medicaid
92	program or voluntarily agrees to participate in the Rx Card
93	program.
94	(f) "Wholesaler" means a business licensed under chapter
95	499, Florida Statutes, to distribute prescription drugs in this
96	state.
97	(4) NEGOTIATED DRUG DISCOUNTS AND REBATES.--
98	(a) Drug discount and rebate agreements.--The secretary
99	shall negotiate discount prices or rebates for prescription
100	drugs from drug manufacturers and labelers. A drug manufacturer
101	or labeler that sells prescription drugs in this state may
102	voluntarily elect to negotiate:
103	1. Supplemental rebates for the Medicaid program over and
104	above those required under 42 U.S.C. s. 1396r-8.
105	2. Discount prices or rebates for the Rx Card program.
106	3. Discount prices or rebates for any other state program
107	that pays for or acquires prescription drugs.
108	(b) Rebate amounts.--In negotiating rebate terms, the
109	secretary shall take into consideration the rebate calculated
110	under the Medicaid rebate program pursuant to 42 U.S.C. s.
111	1396r-8, the price provided to eligible entities under 42 U.S.C.
112	s. 256b, and any other available information on prescription
113	drug prices, discounts, and rebates.
114	(c) Failure to agree.--
115	1. The secretary shall prompt a review of whether to place
116	a manufacturer's or labeler's products on the prior
117	authorization list for the state Medicaid program and take
118	similar actions involving prior authorization or formularies for
119	any other state-funded or state-operated prescription drug
120	program, if:
121	a. The secretary and a manufacturer or labeler fail to
122	reach an agreement on the terms of a supplemental Medicaid
123	rebate or a discount or rebate for the Rx Card program; and
124	b. The discounts or rebates offered by the manufacturer or
125	labeler are not as favorable to the state as the prices provided
126	to eligible entities under 42 U.S.C. s. 256b.
127	2. Any prior authorization must meet the requirements of
128	42 U.S.C. s. 1396r-8(d)(5) and be done in accordance with ss.
129	409.91195 and 409.912, Florida Statutes. The agency shall adopt
130	rules creating clear procedures for the implementation of this
131	subsection.
132	3. The names of manufacturers and labelers that do not
133	enter into rebate agreements are public information, and the
134	agency shall release this information to the public and actively
135	distribute it to doctors, pharmacists, and other health
136	professionals.
137	(5) RX CARD PROGRAM.--
138	(a) Rx Card program established.--The agency shall
139	establish the Rx Card program as a state pharmaceutical
140	assistance program under 42 U.S.C. s. 1396r-8(c)(1)(C)(i)(III),
141	to provide discounts to participants for drugs covered by a
142	rebate agreement. Using funds from negotiated rebates, the
143	agency shall contract with wholesalers and participating retail
144	pharmacies to deliver discounted prices to Rx Card program
145	participants. Discounts to participants in the Rx Card program
146	shall begin by January 1, 2004.
147	(b) Amount of discount.--The drug discounts received by Rx
148	Card program participants shall be calculated by the secretary
149	on a quarterly basis. That calculation shall provide discounts
150	approximately equal to the average amount of the negotiated drug
151	rebate minus an amount to cover the reasonable administrative
152	costs of the Rx Card program.
153	(c) Eligibility for participation.--
154	1. An individual is eligible to participate in the Rx Card
155	program if he or she is a resident of the state and is eligible
156	for participation in the Medicare program or has a net family
157	income below 300 percent of the federal poverty level.
158	2. An individual is ineligible to participate in the Rx
159	Card program if he or she is eligible for assistance under the
160	state's Medicaid program or is covered by an insurance policy
161	that provides benefits for prescription drugs equal to or
162	greater than the benefits provided under the Rx Card program, as
163	delineated by rules adopted by the agency.
164	3. The agency shall establish simple procedures for
165	enrolling Rx Card program participants and shall undertake
166	outreach efforts to build public awareness of the program and
167	maximize enrollment by eligible residents.
168	(d) Operation.--
169	1. The agency shall adopt rules requiring disclosure by
170	participating retail pharmacies to Rx Card program participants
171	of the amount of savings provided as a result of the Rx Card
172	program. The rules must protect information that is proprietary
173	in nature.
174	2. A participating retail pharmacy shall verify to the
175	agency the amounts charged to Rx Card program participants and
176	nonparticipants and shall provide the agency with utilization
177	data necessary to calculate rebates from manufacturers and
178	labelers. The agency shall protect the confidentiality of all
179	information subject to confidentiality protection under state or
180	federal law, rule, or regulation. The agency may not impose
181	transaction charges on wholesalers or participating retail
182	pharmacies that submit claims or receive payments under the
183	program.
184	3. Wholesalers and participating retail pharmacies shall
185	be paid in advance for Rx Card program discounts or shall be
186	reimbursed by the agency on a weekly basis.
187	4. The agency may require a wholesaler or participating
188	retail pharmacy to segregate drugs under the Rx Card program
189	from other drug inventory. The agency may require a wholesaler
190	or participating retail pharmacy to maintain records of
191	acquisition and disposition of drugs under the Rx Card program
192	separately from the wholesaler's or pharmacy's other records.
193	(6) ADMINISTRATION.--
194	(a) Discrepancies in rebate amounts.--Disputes or
195	discrepancies in rebate amounts must be resolved using the
196	process established in this subsection.
197	1. If there is a discrepancy in the manufacturer's or
198	labeler's favor between the amount claimed by a pharmacy and the
199	amount rebated by the manufacturer or labeler, the agency, at
200	the agency's expense, may hire a mutually agreed-upon
201	independent auditor. If a discrepancy still exists following the
202	audit, the manufacturer or labeler shall justify the reason for
203	the discrepancy or make payment to the agency for any additional
204	amount due.
205	2. If there is a discrepancy against the interest of the
206	manufacturer or labeler in the information provided by the
207	agency to the manufacturer or labeler regarding the
208	manufacturer's or labeler's rebate, the manufacturer or labeler,
209	at the manufacturer's or labeler's expense, may hire a mutually
210	agreed-upon independent auditor to verify the accuracy of the
211	data supplied to the agency. If a discrepancy still exists
212	following the audit, the agency shall justify the reason for the
213	discrepancy or provide a refund to the manufacturer or labeler.
214	3. Following the procedures established in subparagraph 1.
215	or subparagraph 2., either the agency or the manufacturer or
216	labeler may request a hearing. Supporting documentation must
217	accompany the request for a hearing.
218	(b) Annual summary report.--The agency shall report the
219	enrollment and financial status of the Rx Card program and
220	report savings from supplemental Medicaid rebates to the
221	President of the Senate and the Speaker of the House of
222	Representatives by February 1 each year.
223	(c) Coordination with other programs.--Where the secretary
224	finds that it is beneficial to both the Rx Card program and
225	another state program, including the state Medicaid program, to
226	combine drug pricing negotiations to maximize drug rebates, the
227	secretary shall do so.
228	(d) Rulemaking.--The agency shall adopt rules pursuant to
229	ss. 120.536(1) and 120.54, Florida Statutes, to implement the
230	provisions of this section.
231	(e) Waivers.--The agency may seek any waivers of federal
232	law, rule, or regulation necessary to implement the provisions
233	of this section.
234	Section 2. The provisions of this act are severable; and,
235	if any phrase, clause, sentence, or provision is declared to be
236	invalid or is preempted by federal law or regulation, the
237	validity of the remainder of this act shall not be affected.
238	Section 3. This act shall take effect July 1, 2003.