AS PASSED BY SENATES.300
2000Page 1
S.300
AN ACT RELATING TO FAIR PRICING OF PRESCRIPTION DRUGS
It is hereby enacted by the General Assembly of the State of Vermont:
* * * PART I * * *
FINDINGS AND PURPOSE
Sec. 1. FINDINGS AND PURPOSE
(a) The general assembly finds that:
(1) Pharmaceutical companies are charging Vermonters’ excessive prices for prescription drugs, denying our citizens access to medically necessary health care and thereby threatening their health and well-being.
(2) Vermonters and other Americans pay the highest prices in the world for prescription drugs - prices which result in extremely high profits for pharmaceutical companies. According to a price comparison by the Vermont Legislature's Joint Fiscal Office, retail prices for selected drugs in Vermont are nearly double prices in Canada. One important cancer drug, tamoxofin, sells for almost 10 times more in Vermont than in Canada.
(3) Lack of affordable access to medically necessary prescription drugs results in the denial of health care, the likelihood of serious illness and death, and the inability to lead a life of good health for many Vermont citizens. Many Vermonters are admitted to or treated at hospitals each year because they cannot afford the drugs prescribed for them. Doctors report that their patients endanger themselves by taking only a portion of their recommended dosage of prescription drugs, because they are unable to afford the full recommended dosage. All Vermont citizens are threatened by the possibility that when they need medically necessary prescription drugs most they will be unable to afford their doctor’s recommended treatment.
(4) Prescription drug costs represent the fastest growing item in health care, and are a driving force in rapidly increasing hospital costs and insurance rates. Excessive pricing for prescription drugs threatens Vermont government’s ability to assist with the health care costs of our citizens, undermines the financial capacity of our communities to meets the educational needs of our children, hurts the ability of our business community to provide health insurance coverage to Vermont’s workforce, and has a negative effect on Vermont’s economy.
(5) It is the intention of the general assembly to implement a series of nonregulatory programs as intermediate steps designed to achieve the legislative purpose of providing affordable access to medically necessary prescription drugs for all Vermonters. If such nonregulatory programs do not succeed in ensuring that prescription drugs are sold in Vermont at fair and nondiscriminatory prices, the general assembly finds that a fair pricing program, one that prohibits excessive and discriminatory pricing in transactions that take place in Vermont, is the most effective and timely alternative to lower drug prices for all Vermonters, and thereby protect the health and well-being of our citizens.
(b) It is the purpose of this act to promote the health and well-being of all Vermont citizens by providing them with affordable access to prescription drugs at the lowest possible prices through nonregulatory means, or if necessary through a regulatory system that ensures that prices charged to Vermont citizens for medically necessary prescription drugs are fair, not excessive, and nondiscriminatory.
(c) Nothing in this act shall be construed to require any retailer or wholesaler to sell any prescription drug in Vermont at a price lower than the sum of its actual cost of purchasing the drug plus such retailer’s or wholesaler’s reasonable, customary cost of doing business and profit markup.
* * * PART II * * *
INTERMEDIATE PROGRAMS
A. Therapeutic and Cost-Effective Utilization of Prescription Drugs
Sec. 2. 33 V.S.A. § 1998 is added to read:
§ 1998. THERAPEUTIC AND COST-EFFECTIVE UTILIZATION OF
PRESCRIPTION DRUGS
The commissioner of social welfare shall convene a collaborative process for the development of a therapeutic and cost-effective prescription drug education and utilization system designed to promote therapeutic and cost-effective utilization of prescription drugs by patients. Participants in the collaborative process may include the commissioner of banking, insurance, securities, and health care administration, the commissioner of health, Vermont physicians, hospitals used by Vermont patients, Vermont pharmacists, public and private health benefit plans, consumer representatives, and any other interested party. The commissioner is authorized to solicit, accept and spend public and private grants, contributions and other funds to match public funds appropriated for these purposes. The therapeutic and cost-effective prescription drug education and utilization system may include:
(1) the establishment of an electronic database or other information resources containing information indicating which equally effective prescription drug or drugs within the same therapeutic class are the least costly for the consumer and the consumer’s health plan. The therapeutic and cost-effective prescription drug utilization database shall be designed for use by physicians, hospitals, pharmacists, consumer, private health insurance plans and government health benefit plans;
(2) the development, for presentation to the general assembly for approval before its use, and in collaboration with the formulary committee established by the secretary of human services under section 4602 of this title, of a uniform formulary of prescription drugs for use by physicians, hospitals, pharmacists, consumers, private health insurance plans and government health insurance plans. The formulary shall be based on the therapeutic and cost-effective prescription drug utilization database developed under subdivision (1) of this section, and shall contain standards and procedures for patient access to medically necessary alternatives to the formulary, and for patient choice of higher cost alternatives to the formulary;
(3) a program to identify the computer and software needs of professionals involved in the process of prescribing and dispensing drugs, if necessary to ensure access to the therapeutic and cost-effective prescription drug utilization database; and
(4) any other program or activity designed to ensure optimal therapeutic and cost-effective utilization of prescription drugs by patients.
Sec. 3. 26 V.S.A. § 2032(a) is amended to read:
(a) The board shall adopt rules necessary for the performance of its duties, including:
(1) scope of the practice of pharmacy;
(2) qualifications for obtaining licensure;
(3) explanations of appeal and other rights given to licensees, applicants and the public;.
(4) standards and procedures permitting the dispensing of drugs prescribed by authorized practitioners by facsimile machine, with suitable safeguards relating to verification and other health and safety issues; and
(5) standards and procedures to monitor and require, if necessary, the medically appropriate generic substitution of prescription drugs authorized under section 4605 of Title 18.
Sec. 4. REPORT ON ACADEMIC DETAILING AND CONSUMER
DETAILING; APPROPRIATIONS; THERAPEUTIC AND
COSTEFFECTIVE UTILIZATION OF PRESCRIPTION DRUGS
(a) The commissioner of social welfare shall report to the governor and the general assembly on or before January 1, 2001 with an assessment of the success of academic detailing programs and consumer counter-detailing programs administered by hospitals and health insurers in this state, together with an estimate of the costs and benefits of funding such programs on a statewide basis.
(b) The sum of $75,000.00 is appropriated from the insurance regulatory and supervision fund to the commissioner of social welfare in fiscal year 2001 to carry out the purposes of Sec. 2 of this act.
B. Temporary Emergency Pharmaceutical Assistance Program
Sec. 5. TEMPORARY EMERGENCY PHARMACEUTICAL ASSISTANCE
PROGRAM
(a) On or before June 1, 2000, the office of economic opportunity shall request proposals to award one or more grants to community health centers, free health care clinics, and other nonprofit organizations to assist Vermont residents to purchase prescription drugs at the lowest possible cost, taking into consideration the price of prescription drugs purchased from the federal supply schedule, and the price of prescription drugs purchased in Canada. Priority shall be given to assistance programs for the purchase of drugs at the lowest possible cost through Vermont pharmacies, including purchases through federally qualified health centers or Veterans’ Administration health care facilities. If such priority assistance for purchasing in Vermont is not feasible, programs may include assistance in the purchase of prescription drugs from Canada. Grants may be awarded for:
(1) Identifying and organizing pharmacies, clinics, physicians and other health care providers in the United States and Canada who can assist Vermonters in the prescribing and purchasing of prescription drugs at the lowest possible price.
(2) Assisting and organizing the communications, prescriptions, purchasing, transportation and other activities needed for Vermont residents to purchase prescription drugs in Vermont and from Canada.
(3) Any other proposal designed to permit Vermont residents to purchase prescription drugs in Vermont or from Canada or elsewhere at the lowest possible price.
(b) The request for proposals of the office of economic opportunity shall be approved by the secretary of human services, after review and recommendations from a committee convened by the director of the office of economic opportunity, including the director, the commissioner of health, the office of Vermont health access, one consumer representative appointed by the director, one elder consumer representative appointed by the director, and one or more members of the commission on health care values and priorities appointed by the director. The request for proposals shall include the following provisions:
(1) Grant proposals for fiscal year 2001 shall be submitted to the office of economic opportunity no later than July 15, 2000.
(2) Proposals shall be implemented by August 2000.
(3) Grant proposals shall ensure that each prescription drug purchase transaction in connection with a new or renewed prescription which is subject to consultation under pharmacy board procedures and protocols required by subdivision (d)(2) of this section by a Vermont retail pharmacist shall include a consulting fee for such pharmacist’s services equal to the Medicaid dispensing fee.
(4) Grant proposals shall ensure that any Vermont resident may be eligible for assistance under the grant programs without regard to membership or affiliation with the organization or other entity administering or implementing the grant proposal.
(c) The secretary of human services may award one or more grants, after review by and recommendations from the committee designated in subsection (b) of this section. In awarding grants, the secretary shall consider the need for geographic balance of programs, and the ability of all Vermonters without regard to the geographic location of their residence to access assistance under the grant programs authorized by this section. The office of economic opportunity shall administer implementation of the grants awarded by the secretary.
(d)(1) Within 30 days of passage of this act, the governor shall convene a task force consisting of the following members: members appointed by the governor, including officials of the executive branch, the board of pharmacy, Vermont wholesale and retail pharmacists, and Vermont health care providers; and two members of the senate appointed by the committee on committees and two members of the house of representatives appointed by the speaker of the house. The governor and the task force shall take all steps necessary and desirable to encourage the province of Quebec to grant reciprocal prescription authority in Quebec to qualified health care providers in Vermont, so as to permit Vermont residents to purchase prescription drugs in Quebec upon prescription by a Vermont health care provider. In negotiations with the province of Quebec, the task force is encouraged to consider ways in which the state of Vermont can offer reciprocal assistance to Quebec in meeting its health care needs.
(2) The board of pharmacy, after consultation with pharmacists in Vermont and Quebec, shall develop procedures and protocols to assist with the verification of prescriptions made by Vermont health care providers, and procedures and protocols with local Vermont pharmacists relating to consultation, record maintenance, patient profiles tracking, and payment of consulting fees, so as to facilitate the purchase of prescription drugs by Vermont residents in Quebec.
Sec. 6. APPROPRIATIONS; POSITIONS ADDED; TEMPORARY
EMERGENCY PHARMACEUTICAL ASSISTANCE PROGRAM
(a) The sum of $350,000.00 is appropriated from the general fund to the office of economic opportunity in fiscal year 2001 for the award of grants under Sec. 5 of this act.
(b) The sum of $25,000.00 is appropriated from the general fund to the office of economic opportunity in fiscal year 2000 for administrative costs associated with awarding grants under Sec. 5 of this act. The sum appropriated by this subsection shall carry forward and be used for such purposes in fiscal year 2001.
(c) The sum of $150,000.00 is appropriated from the general fund to the department of social welfare in fiscal year 2001 to reimburse Vermont pharmacies for consulting with patients purchasing drugs in Canada in connection with new or renewed prescriptions.
(4) One (1) new part-time position - administrative assistant - is created in the office of economic opportunity in fiscal year 2000.
C. Federally Qualified Health Centers
Sec. 7. FEDERALLY QUALIFIED HEALTH CENTERS
(a) It is the purpose of this section to advance Vermont’s goal of affordable access to quality health care for all Vermonters through the expansion and development of federally qualified health centers throughout this state. The general assembly finds that an appropriate expansion of federally qualified health centers can:
(1) empower communities to create a system of universal access to primary health care that people need;
(2) create a partnership between Vermonters who use health care services and Vermonters who provide those services;
(3) reduce health care costs for patients through administration of an income-based sliding scale fee schedule for primary health care services;
(4) expand access to health care in medically underserved areas, and reduce cost shifting to private health insurance plans through a service-based reimbursement schedule for primary health care providers that is determined by the reasonable cost of the services provided; and
(5) reduce health care costs for individuals, businesses and government through access to the federal supply schedule’s substantially discounted prescription drug prices.
(b) Within 45 days of passage of this act, the governor is directed to request from the federal government medically underserved area designations for medically underserved populations in all appropriate regions of the state of Vermont not so designated on the effective date of this act, and shall take all steps necessary to secure such designation.
(c) Within 30 days of passage of this act, the department of health shall contract with the Bi-State Primary Care Association to implement the provisions of this section, and shall award to the Association such funds as are appropriated by the general assembly to carry out the purpose of this section.
(d) As conditions of the grant awarded by the department of health to carry out the purposes of this section, the department shall contract with the Association for:
(1) the development and implementation of a plan to create an appropriate number of federally qualified health center administrative entities statewide, with such satellite facilities as the federally qualified health center administrative entities may determine are necessary to meet the health care needs of the community;
(2) technical assistance, by contract or other means, to rural health centers and health care providers seeking federal approval as a federally qualified health center;
(3) grants not to exceed $5,000.00 to rural health centers and health care providers, matched by the grant recipient at 100 percent of the grant amount, to support all or a portion of the expenses associated with conversion to a federally qualified health center;
(4) grants not to exceed $5,000.00 to nonprofit community organizations, matched by the grant recipient at 100 percent of the grant amount, to support all or a portion of the expenses associated with the establishment of federally qualified health center administrative entities; and
(5) the development and implementation of plans to offer prescription drugs to patients of federally qualified health centers at federal supply schedule prices through contracts with existing pharmacies in the community, or through a health center dispensary if a contract with a community pharmacy is not feasible.
(e) The Bi-State Primary Care Association shall report to the general assembly on January 1 of each year with its progress in implementing the provisions of this section, and with an accounting of its use of grant funds.
(f) Vermont’s Congressional Delegation is urged to take all actions necessary and desirable in securing designations, approvals and other actions by the federal government required to carry out the purposes of this section.
Sec. 8. APPROPRIATIONS; FEDERALLY QUALIFIED HEALTH
CENTERS
(a) The sum of $554,000.00 is appropriated from the general fund to the department of health in fiscal year 2001 for a grant to the Bi-State Primary Care Association to carry out the purposes of this act, such sum to be carried forward and hereby appropriated to the department in fiscal year 2002 for such purposes. The department of health and the Bi-State Primary Care Association shall identify the funds necessary to carry out the purposes of Sec. 7 of this act in fiscal year 2003, and report such information to the general assembly on or before January 1, 2002.
(b) The sum of $226,000.00 is appropriated from the general fund in fiscal year 2001 to the department of social welfare to support additional Medicaid expenditures for health care provided by federally qualified health centers.
D. V-Script Buy-In for Medicare Beneficiaries; V-Script Coverage of Catastrophic Expenses; VHAP Pharmacy Expansion
Sec. 9. 33 V.S.A. § 1991(3) is amended to read:
(3) "Drug" means a drug that may not be dispensed unless prescribed by a health care provider as defined by section 9402(6) of this title acting within the scope of the provider's license. A drug shall always be the lowest cost brand available to the pharmacist unless the health care provider writing the prescription specifies otherwise. The term includes insulin, an insulin syringe and an insulin needle. The term excludes:
(A) a drug determined less than effective under the federal Food, Drug and Cosmetics Act;
(B) except for purposes of recipients eligible under section 1993(a)(2) of this title, a drug within therapeutic classifications primarily associated with the treatment of acute medical conditions; and
(C) a central nervous system agent other than: