Senate Bill sb0048A

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    Florida Senate - 2003                                  SB 48-A

    By Senator Wasserman Schultz





    34-2601-03

  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.; providing purpose of

  5         the program; creating s. 409.964, F.S.;

  6         providing definitions; creating s. 409.966,

  7         F.S.; requiring the Secretary of Health Care

  8         Administration to operate the LifeSaver Rx

  9         Program as a state pharmaceutical assistance

10         program to provide discounts to participants

11         for prescription drugs covered by a rebate

12         agreement; requiring the secretary to negotiate

13         discount prices or rebates for prescription

14         drugs from manufacturers or labelers; providing

15         that the Agency for Health Care Administration

16         shall contract with participating retail

17         pharmacies to deliver discounted prices to

18         program participants; providing factors to be

19         considered in negotiating discounts or rebates;

20         providing for quarterly calculation of

21         discounts; creating s. 409.968, F.S.; providing

22         for calculation of payment by program

23         participants and the agency; requiring

24         participating retail pharmacies in the state to

25         charge the rate allowable under the Medicaid

26         program for prescription drugs sold to program

27         participants; providing for rate of

28         reimbursement of participating retail

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

30         providing requirements for program eligibility;

31         requiring the Agency for Health Care

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    Florida Senate - 2003                                  SB 48-A
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 1         Administration to establish enrollment

 2         procedures; providing for use of rebates from

 3         drug manufacturers; creating s. 409.972, F.S.;

 4         providing for operation of the program;

 5         authorizing the Board of Pharmacy to adopt

 6         certain rules; creating s. 409.974, F.S.;

 7         providing procedure for resolution of

 8         discrepancies in rebate amounts; creating s.

 9         409.976, F.S.; requiring an annual report;

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

11         coordination with other programs; creating s.

12         409.980, F.S.; authorizing the agency to adopt

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

14         the agency to seek certain waivers; providing a

15         contribution by the agency toward the cost of

16         prescription drugs purchased by program

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

18         requiring the Agency for Health Care

19         Administration to publish on a website the

20         average wholesale prices of drugs provided

21         through the program; requiring the agency to

22         publish additional information to assist

23         consumers; requiring a report on methods of

24         pricing pharmaceutical products purchased by

25         the program; providing an appropriation;

26         providing for severability; providing for

27         construction of the act in pari materia with

28         laws enacted during the Regular Session of the

29         Legislature; providing an effective date.

30  

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

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    Florida Senate - 2003                                  SB 48-A
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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                                  SB 48-A
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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                                  SB 48-A
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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                                  SB 48-A
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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 rebate

19  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                                  SB 48-A
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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. The agency shall undertake

30  outreach efforts to build public awareness of the program and

31  maximize enrollment by eligible residents. Revenues generated

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    Florida Senate - 2003                                  SB 48-A
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 1  from rebates from drug manufacturers shall be used for, but

 2  not be limited to, offsetting state costs to administer the

 3  program, the purchase of prescription drugs, and any public

 4  awareness campaigns.

 5         Section 7.  Section 409.972, Florida Statutes, is

 6  created to read:

 7         409.972  Program operation.--

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

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

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

11  participating retail pharmacies to program participants of the

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

13  rules must protect information that is proprietary in nature.

14         (2)  Participating retail pharmacies shall be paid in

15  advance for program discounts or shall be reimbursed by the

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

17  contracts between the agency and such businesses.

18         (3)  The agency shall collect from the participating

19  retail pharmacies utilization data necessary to calculate the

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

21  agency shall protect the confidentiality of all information

22  subject to confidentiality protection under the laws of this

23  state or federal laws, rules, or regulations.

24         Section 8.  Section 409.974, Florida Statutes, is

25  created to read:

26         409.974  Discrepancies in rebate

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

28  using the process established in this section.

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

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

31  retail pharmacy and the amount rebated by the manufacturer or

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    Florida Senate - 2003                                  SB 48-A
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 1  labeler, the agency, at the agency's expense, may hire a

 2  mutually agreed-upon independent auditor. If a discrepancy

 3  still exists following the audit, the manufacturer or labeler

 4  shall justify the reason for the discrepancy or make payment

 5  to the agency for any additional amount due.

 6         (2)  If there is a discrepancy against the interest of

 7  the manufacturer or labeler in the information provided by the

 8  agency to the manufacturer or labeler regarding the

 9  manufacturer's or labeler's rebate, the manufacturer or

10  labeler, at the manufacturer's or labeler's expense, may hire

11  a mutually agreed-upon independent auditor to verify the

12  accuracy of the data supplied to the agency. If a discrepancy

13  still exists following the audit, the agency shall justify the

14  reason for the discrepancy or refund the manufacturer or

15  labeler.

16         (3)  Following the completion of procedures established

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

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

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

20  Supporting documentation must accompany the request for a

21  hearing.

22         Section 9.  Section 409.976, Florida Statutes, is

23  created to read:

24         409.976  Report.--The agency shall provide a report on

25  the enrollment and financial status of the program to the

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

27  House of Representatives by the second week in January each

28  year.

29         Section 10.  Section 409.978, Florida Statutes, is

30  created to read:

31  

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    Florida Senate - 2003                                  SB 48-A
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 1         409.978  Coordination with other programs.--The

 2  secretary shall combine drug pricing negotiations to maximize

 3  drug rebates when the secretary determines that the

 4  combination of such negotiations is beneficial to both the

 5  LifeSaver Rx Program and another state program, including the

 6  state Medicaid program.

 7         Section 11.  Section 409.980, Florida Statutes, is

 8  created to read:

 9         409.980  Rulemaking.--The agency is authorized to adopt

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

11  provisions of this act. Such rules shall include eligibility

12  requirements, limits on participation, benefit limitations, a

13  requirement for generic drug substitution, and other program

14  parameters comparable to those of the Medicaid program.

15  Individuals eligible to participate in this program shall not

16  be subject to the limit of four brand name drugs per month per

17  recipient as specified in s. 409.912(38)(a).

18         Section 12.  Section 409.982, Florida Statutes, is

19  created to read:

20         409.982  Waivers.--The agency shall seek any waivers of

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

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

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

24  rule, or regulation necessary to implement the provisions of

25  this act.

26         Section 13.  The agency shall contribute toward the

27  cost of each prescription purchased by the program

28  participant.

29         Section 14.  Section 409.9066, Florida Statutes, is

30  amended to read:

31         409.9066  Medicare prescription discount program.--

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    Florida Senate - 2003                                  SB 48-A
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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                                  SB 48-A
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 1         Section 16.  Implementation of the LifeSaver Rx Program

 2  is contingent upon a specific appropriation authorized in the

 3  General Appropriations Act.  The Legislature shall limit

 4  annual appropriations to no more than $30 million from state

 5  funds to the Agency for Health Care Administration to be used

 6  as state matching funds for the LifeSaver Rx Program. This

 7  annual appropriation limitation shall not apply to

 8  pharmaceutical rebate revenue.

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

10  application thereof to any person or circumstance is held

11  invalid, the invalidity shall not affect other provisions or

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

13  invalid provision or application, and to this end the

14  provisions of this act are declared severable.

15         Section 18.  If any law that is amended by this act was

16  also amended by a law enacted at the 2003 Regular Session of

17  the Legislature, such laws shall be construed as if they had

18  been enacted during the same session of the Legislature, and

19  full effect should be given to each if that is possible.

20         Section 19.  This act shall take effect upon becoming a

21  law.

22  

23            *****************************************

24                          SENATE SUMMARY

25    Creates the "LifeSaver Rx Program" as a state
      pharmaceutical assistance program to provide discounts
26    for prescription drugs covered by a rebate agreement.
      Requires the Secretary of Health Care Administration to
27    negotiate discount prices or rebates from drug
      manufacturers and labelers. Provides for calculating
28    discounts and the rate of reimbursements to pharmacies.
      Provides criteria for enrollment in the program.
29    Authorizes the Board of Pharmacy and the Agency for
      Health Care Administration to adopt rules. (See bill for
30    details.)

31  

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