AS PASSED BY HOUSE/HOUSE PROPOSALS.300
2000Page 1
House Proposal of Amendment
S.300
An act relating to fair pricing of prescription drugs.
The House proposes to the Senate to amend the bill by striking all after the enacting clause and inserting in lieu thereof the following:
Part A. Therapeutic and Cost-Effective Utilization of Prescription Drugs
Sec. 1. 33 V.S.A. § 1998 is added to read:
§ 1998. THERAPEUTIC AND COST-EFFECTIVE UTILIZATION OF
PRESCRIPTION DRUGS
The commissioner of social welfare shall develop a therapeutic and cost-effective prescription drug education and utilization system designed to promote therapeutic and cost-effective utilization of prescription drugs by patients. In developing the system the commissioner may request the participation of 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, the board of medical practice, the board of osteopathic physicians and surgeons, the board of nursing, the board of pharmacy, any other appropriate licensing boards, 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 to carry out the purposes of this section. The 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 electronic data base may also include the capability of creating, for the purpose of promoting medically appropriate and cost-effective prescription drug utilization, a confidential, individual prescription drug record for participating patients, including the identity of prescribing health care professionals and dispensing pharmacies, within a secure communications network connecting physicians, pharmacists and patients. The database shall be designed for use by physicians, hospitals, pharmacists, consumers, private health insurance plans and public health benefit plans;
(2) the development 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 developed by the commissioner pursuant to this subdivision shall incorporate the following elements:
(A) The formulary shall incorporate the 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.
(B) The standards and procedures regulating prescription drug formularies set forth in Rule 10 of the division of health care administration, “Quality Assurance Standards and Consumer Protections for Managed Care Plans,” as amended, shall apply to the use of any formulary developed pursuant to this subdivision by any health insurance plan, except that the commissioner may establish separate standards and procedures as necessary to comply with federal Medicaid laws and regulations.
(C) The formulary developed pursuant to this subdivision shall not be required of any health insurance plan, or any beneficiary of a health insurance plan, without the approval of the general assembly, except that the commissioner of social welfare may implement the formulary developed pursuant to this subdivision by rule for programs administered by or through agencies or instrumentalities of the state in accordance with section 1999 of this title, after presenting an implementation plan to a joint hearing of the House and Senate Committees on Health and Welfare.
(D) As used in this subdivision, “health insurance plan” means a health benefit plan offered or administered by a health insurer, as defined by section 9402(7) of Title 18;
(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;
(4) a program of academic detailing and consumer counter-detailing that educates physicians and consumers on the therapeutic and cost-effective utilization of prescription drugs, developed in a manner designed to counteract the marketing efforts of pharmaceutical companies directed at physicians, and to counteract direct-to-consumer advertising, and developed in coordination with similar programs administered throughout the state;
(5) recommendations for continuing medical education opportunities and requirements for Vermont physicians and other health care professionals who prescribe, dispense or administer prescription drugs; and
(6) any other program or activity designed to ensure optimal therapeutic and cost-effective utilization of prescription drugs by patients.
Sec. 2. 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, or by e-mail communications, with suitable safeguards relating to verification and other health and safety issues; and
(5) standards and procedures to monitor and require the maximum practicable use of medically appropriate generic substitution of prescription drugs authorized under section 4605 of Title 18.
Sec. 3. 26 V.S.A. § 1353(a)(13) is added to read:
(a) The board shall have the following powers and duties:
* * *
(13) To adopt standards and procedures requiring a licensee, when relevant to the individual’s scope of practice in Vermont as determined by the board, to complete an appropriate program of continuing medical education relating to therapeutic and cost-effective prescribing, dispensing or administering prescription drugs, consistent with the recommendations of the commissioner of social welfare under section 1998(4) of Title 33.
Sec. 3a. 26 V.S.A. § 1972(a)(4) is added to read:
(a) In addition to its other powers and duties, the board shall:
* * *
(4) adopt standards and procedures requiring a licensee, when relevant to the individual’s scope of practice in Vermont as determined by the board, to complete an appropriate program of continuing education relating to therapeutic and cost-effective prescribing, dispensing or administering prescription drugs, consistent with the recommendations of the commissioner of social welfare under section 1998(4) of Title 33.
Sec. 4. 8 V.S.A. § 4089h-1 is added to read:
§ 4089h-1. PRESCRIPTION DRUG FORMULARIES
(a) The standards and procedures regulating prescription drug formularies set forth in Rule 10 of the division of health care administration, “Quality Assurance Standards and Consumer Protections for Managed Care Plans”, as amended, shall apply to any formulary used by a health insurance plan.
(b) As used in this section, “health insurance plan” means a health benefit plan offered or administered by a health insurer, as defined by section 9402(7) of Title 18.
(c) This section shall apply to any health insurance policy, subscriber contract and other health benefits plan offered, issued or renewed after October 1, 2000
Sec. 5. REPORT ON THERAPEUTIC AND COST-EFFECTIVE
UTILIZATION OF PRESCRIPTION DRUGS;
APPROPRIATIONS
(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 the separate programs of the commissioner’s therapeutic and cost-effective utilization of prescription drugs system under Sec. 1 of this act, together with an estimate of the costs and benefits of funding such programs on a statewide basis.
(b) The board of pharmacy shall report to the general assembly on or before January 1 in the year 2001 and in each of the succeeding three years with an evaluation of its success in implementing the provisions of section 2032(a) of Title 26.
(c) The sum of $150,000.00 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. 1 of this act. Funds allocated for academic detailing and consumer counter-detailing may be matched with federal Medicaid funds to be spent for these purposes.
Part B. Federally Qualified Health Centers
Sec. 6. FEDERALLY QUALIFIED HEALTH CENTERS
(a) It is the purpose of this section to assist Vermonters to purchase prescription drugs at the lowest possible cost and 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, and any other designation or approval needed to establish federally qualified health centers or other entities permitted to access the federal supply schedule for prescription drugs 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 designations and approvals.
(c) Within 30 days of passage of this act, the department of health shall award a contract to implement the provisions of this section, and shall award to the contractor such funds as are appropriated by the general assembly to carry out the purpose of this section.
(d) The contract awarded by the department of health to carry out the purposes of this section shall provide for the following:
(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 $10,000.00 to rural health centers and health care providers, matched by the grant recipient at 50 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 $10,000.00 to nonprofit community organizations, matched by the grant recipient at 50 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 ensure that each federally qualified health center operating in this state provides access to prescription drugs to patients of the center 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 commissioner of health and its contractor 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.
(g) The commissioner of health may exercise sole source contracting authority to carry out the provisions of this section.
Sec. 7. APPROPRIATIONS; FEDERALLY QUALIFIED HEALTH
CENTERS
The sum of $277,000.00 is appropriated to the department of health from the general fund in fiscal year 2001 as a fiscal year 2001 one-time appropriation pursuant to Sec. 253 of H.842 of the 2000 session of the general assembly, to support a contract to carry out the purposes of Sec. 6 of this act. The department of health and the Bi-State Primary Care Association shall report to the general assembly on or before January 1, 2001 identifying the funds necessary to carry out the purposes of Sec. 6 of this act in fiscal year 2002.
Part C. V-Script Coverage of Catastrophic Expenses; VHAP Pharmacy
Expansion; V-Script Buy-In for Medicare Beneficiaries
Sec. 8. 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 the accruing of prescription drugs expenses for 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:
(i) agents used for treatment of convulsive disorders;
(ii) nonsteroidal anti-inflammatory agents for arthritis; and
(iii) agents used primarily for control of psychotic conditions diagnosed under current classifications of the Diagnostic Statistical Manual.
Sec. 9. 33 V.S.A. § 1992(e) is amended to read:
(e) Any manufacturer of prescription drugs purchased by persons receiving assistance under this chapter shall pay to the commissioner, as a condition of participation in the program, a rebate in an amount at least as favorable as the rebate paid to the commissioner in connection with the Medicaid program. Agreements with participating manufacturers may also include provisions for the coordination of benefits between pharmaceutical manufacturer patient assistance programs and the prescription drug benefits provided through programs administered by the department, financial support from pharmaceutical manufacturers for the catastrophic prescription drug expense program authorized by section 1994(e) of this title, and any other provisions determined by the commissioner to be necessary or desirable for the cost-effective operation of the prescription drug benefit programs administered by the department.
Sec. 10. 33 V.S.A. § 1993 is amended to read:
§ 1993. ELIGIBILITY
(a)(1) A person shall be eligible for assistance under this chapter if:
(A) he or she is a resident of Vermont at the time of application for benefits, as defined by the commissioner by ruleand has been such, continuously, for the 12 months immediately preceding application; and
(B)(1) he or she is at least 65 years of age or disabled, and receives Social Security disability benefits (SSDI), or is a Medicare beneficiary; and
(C) the person's household income, when calculated in accordance with the rules adopted for the Vermont health access plan under Act No. 14 of the Acts and Resolves of the 1995 Session of the general assembly, as amended, is no greater than 225 percent of the federal poverty level.; or
(2)(A) he or she is at least 65 years of age or disabled and receives Social Security disability benefits (SSDI), or is a Medicare beneficiary, and the person’s household income, when calculated in accordance with the rules adopted for the Vermont health access plan under Act No. 14 of the Acts and Resolves of the 1995 Session of the general assembly, as amended, is greater than 175 percent of the federal poverty level and less than or equal to 300 percent of the federal poverty level; or
(B) he or she is not eligible for assistance under subdivision (1) of this subsection, or under subdivision (2)(A) of this subsection, or under the Vermont Health Access Plan, and the person’s household income, when calculated in accordance with the rules adopted for the Vermont health access plan under Act No. 14 of the Acts and Resolves of the 1995 Session of the general assembly, as amended, is less than or equal to 300 percent of the federal poverty level.
(2)(b) A person shall be eligible for assistance with prescription drug expenses covered under this chapter upon payment of the cost sharing amount required by section 2541994 of this title.
(b)(c) A person whose prescription drug expenses are paid or reimbursable, either in whole or in part, by any plan of assistance or insurance, other than Title XVIII of the Social Security Act (Medicare), shall not be eligible for pharmaceutical assistance under this chaptersubdivision (a)(1) of this section. No assistance shall be provided under this chapter with respect to an individual drug purchase that may be covered in whole or in part by Title XVIII of the Social Security Act (Medicare).
(d)(1) Notwithstanding any other provision of law, no general fund amounts appropriated for Vermont’s pharmaceutical assistance programs under this chapter, as amended, and the pharmaceutical benefits program component of the Vermont health access plan under Act No. 14, Sec. 14(a)(6) of the Acts and Resolves of the 1995 Session of the general assembly, as amended may be spent if federal funds in such amounts are made available and are spent on benefits for the beneficiaries of such programs.
(2) To the greatest extent feasible, in the event of the enactment after the effective date of this section of any federal program, or expansion of an existing federal program which is designed to provide pharmaceutical assistance to individuals receiving assistance under this chapter, or under the pharmaceutical benefits program component of the Vermont health access plan under Act No. 14, Sec. 14(a)(6) of the Acts and Resolves of the 1995 Session of the general assembly, as amended, general funds which would otherwise be spent for such state programs shall be used to supplement general funds appropriated for such state programs.
(3) The commissioner shall work with the Vermont’s congressional delegation to help ensure that Vermont’s share of any new federal monies appropriated for beneficiaries of state pharmaceutical assistance programs can be used to address the unmet pharmaceutical needs of such beneficiaries, and will not replace existing funding for such programs.
Sec. 11. 33 V.S.A. § 1994(a) is amended to read:
(a) Benefits under this chapter shall be subject to payment of a co-payment or coinsurance amount by the recipient in accordance with the provisions of this section: