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                                                       PRINTER'S NO. 624

THE GENERAL ASSEMBLY OF PENNSYLVANIA


HOUSE BILL

No. 444 Session of 2001


        INTRODUCED BY WALKO, SOLOBAY, SHANER, LESCOVITZ, WOJNAROSKI,
           LAUGHLIN, DeWEESE, COSTA, CALTAGIRONE, STABACK, YOUNGBLOOD,
           TRELLO, PISTELLA, YUDICHAK, PETRARCA, STURLA, BELARDI,
           MANDERINO, MELIO, VEON, STEELMAN AND FREEMAN,
           FEBRUARY 8, 2001

        REFERRED TO COMMITTEE ON HEALTH AND HUMAN SERVICES,
           FEBRUARY 8, 2001

                                     AN ACT

     1  Providing for programs for prescription drug price reduction in
     2     this Commonwealth; and providing for a penalty.

     3                         TABLE OF CONTENTS
     4  Chapter 1.  Preliminary Provisions.
     5  Section 101.  Short title.
     6  Section 102.  Legislative findings.
     7  Section 103.  Legislative intent.
     8  Section 104.  Definitions.
     9  Chapter 3.  Prescription Drug Price Reduction.
    10  Section 301.  Pennsylvania Prescription Drug Advisory
    11                 Commission.
    12  Section 302.  Emergency drug pricing.
    13  Section 303.  Appeals by retailer.
    14  Chapter 5.  Pennsylvania Rx Program.
    15  Section 501.  Pennsylvania Rx Program.
    16  Section 502.  Rebate agreement.

     1  Section 503.  Rebate amount.
     2  Section 504.  Discounted prices for qualified residents.
     3  Section 505.  Operation of program.
     4  Section 506.  Action with regard to nonparticipating
     5                 manufacturers and labelers.
     6  Section 507.  Discrepancies in rebate amounts.
     7  Section 508.  Pennsylvania Rx Fund.
     8  Section 509.  Annual summary report.
     9  Section 510.  Obligations of department.
    10  Section 511.  Contracting.
    11  Section 512.  Medical assistance programs.
    12  Section 513.  Rules and regulations.
    13  Section 514.  Waivers.
    14  Chapter 7.  Profiteering in Prescription Drugs.
    15  Section 701.  Profiteering in prescription drugs.
    16  Section 702.  Investigation by Attorney General.
    17  Section 703.  Agreements with governments of other jurisdictions
    18                 and other entities.
    19  Chapter 49.  Miscellaneous Provisions.
    20  Section 4901.  Appointments and first meeting of Pennsylvania
    21                 Prescription Drug Advisory Commission.
    22  Section 4902.  Effective date.
    23     The General Assembly of the Commonwealth of Pennsylvania
    24  hereby enacts as follows:
    25                             CHAPTER 1
    26                       PRELIMINARY PROVISIONS
    27  Section 101.  Short title.
    28     This act shall be known and may be cited as the Prescription
    29  Drug Price Reduction Act.
    30  Section 102.  Legislative findings.
    20010H0444B0624                  - 2 -

     1     The General Assembly hereby finds that:
     2         (1)  Pharmaceutical companies are charging the citizens
     3     of Pennsylvania excessive prices for prescription drugs,
     4     denying them access to medically necessary health care and
     5     threatening their health and safety. Many Pennsylvania
     6     citizens are admitted to or treated at hospitals each year
     7     because they cannot afford the drugs prescribed for them that
     8     could have prevented the need for hospitalization. Many
     9     others must enter expensive institutional care settings
    10     because they cannot afford the necessary prescription drugs
    11     that could have supported them outside of an institution. All
    12     Pennsylvania citizens are threatened by the possibility that,
    13     when they need medically necessary prescription drugs most,
    14     they may be unable to afford their doctor's recommended
    15     treatment.
    16         (2)  Citizens of Pennsylvania and other Americans pay the
    17     highest prices in the world for prescription drugs, prices
    18     that result in extremely high profits for pharmaceutical
    19     companies.
    20         (3)  Prescription drug costs represent the fastest
    21     growing item in health care and are a driving force in
    22     rapidly increasing hospital costs and insurance rates.
    23         (4)  Excessive pricing for prescription drugs threatens
    24     Pennsylvania's ability to assist with the health care costs
    25     of its citizens, undermines the financial capacity of
    26     Pennsylvania communities to meet the educational needs of its
    27     children, hurts the ability of the business community to
    28     provide health insurance coverage to Pennsylvania's work
    29     force and has a negative effect on its economy. The General
    30     Assembly finds that affordability is critical in providing
    20010H0444B0624                  - 3 -

     1     access to prescription drugs for Pennsylvania residents.
     2  Section 103.  Legislative intent.
     3     The General Assembly finds and declares as follows:
     4     It is the intent of the General Assembly to provide access
     5  for all Pennsylvania citizens to medically necessary
     6  prescription drugs at the lowest possible prices.
     7  Section 104.  Definitions.
     8     The following words and phrases when used in this act shall
     9  have the meanings given to them in this section unless the
    10  context clearly indicates otherwise:
    11     "Average wholesale price."  The wholesale price charged on a
    12  specific commodity that is assigned by the drug manufacturer and
    13  is listed in a nationally recognized drug pricing file.
    14     "Commission."  The Pennsylvania Prescription Drug Advisory
    15  Commission.
    16     "Department."  The Department of Health of the Commonwealth.
    17     "Director."  The director of the Pennsylvania Prescription
    18  Drug Advisory Commission.
    19     "Federal supply schedule."  The price catalog containing
    20  goods available for purchase by Federal agencies. Drug prices on
    21  the Federal supply schedule are negotiated by the Department of
    22  Veterans Affairs and are the best publicly available indicator
    23  of the prices drug companies charge favored customers.
    24     "Fund."  The Pennsylvania Rx Fund.
    25     "Initial discounted price."  A price that is less than or
    26  equal to the average wholesale price, minus 6%, plus any
    27  dispensing fee provided under the Medicaid program.
    28     "Labeler."  A entity or person that receives prescription
    29  drugs from a manufacturer or wholesaler and repackages those
    30  drugs for later retail sale and that has a labeler code from the
    20010H0444B0624                  - 4 -

     1  Federal Food and Drug Administration under 21 CFR § 207.20
     2  (relating to who must register and submit a drug list).
     3     "Manufacturer."  A manufacturer of prescription drugs and
     4  includes a subsidiary or affiliate of a manufacturer.
     5     "Medicaid program."  The medical assistance program
     6  established and operated by the Department of Public Welfare
     7  pursuant to Subarticle (f) of Article IV of the act of June 13,
     8  1967 (P.L.31, No.21), known as the Public Welfare Code.
     9     "PACE program."  The Pharmaceutical Assistance Contract for
    10  the Elderly program provided for in Chapter 5 of the act of
    11  August 26, 1971 (P.L.351, No.91), known as the State Lottery
    12  Law.
    13     "PACENET program."  The Pharmaceutical Assistance Contract
    14  for the Elderly Needs Enhancement Tier program provided for in
    15  Chapter 5 of the act of August 26, 1971 (P.L.351, No.91), known
    16  as the State Lottery Law.
    17     "Participating retail pharmacy" or "retail pharmacy."  A
    18  retail pharmacy located in this Commonwealth, or another
    19  business licensed to dispense prescription drugs in this
    20  Commonwealth, that participates in the Pennsylvania Rx Program
    21  and that provides discounted prices to residents as provided in
    22  section 504.
    23     "Pharmacy benefit manager."  An entity that procures
    24  prescription drugs at a negotiated rate under a contract.
    25     "Prescription drug."  A legend drug, insulin, an insulin
    26  syringe or an insulin needle eligible for which a prescription
    27  is required.
    28     "Program."  The Pennsylvania Rx Program.
    29     "Qualified resident."  A resident of this Commonwealth who
    30  has obtained from the Department of Health a Pennsylvania Rx
    20010H0444B0624                  - 5 -

     1  enrollment card.
     2     "Secondary discounted price."  A price that is equal to or
     3  less than the initial discounted price minus the amount of any
     4  rebate paid by the Commonwealth to the participating retail
     5  pharmacy.
     6     "Secretary."  The Secretary of Health of the Commonwealth.
     7     "State-sponsored program."  The PACE and PACENET program, the
     8  medical assistance program, the Pennsylvania Employee Benefit
     9  Trust Fund, the State Employees' Retirement System, the Public
    10  School Employees' Retirement System or any other State agency or
    11  designated pharmaceutical program that purchases or arranges for
    12  the purchase of prescription medications.
    13                             CHAPTER 3
    14                 PRESCRIPTION DRUG PRICE REDUCTION
    15  Section 301.  Pennsylvania Prescription Drug Advisory
    16             Commission.
    17     (a)  Establishment.--The Pennsylvania Prescription Drug
    18  Advisory Commission is hereby established. The commission shall
    19  consist of the following 12 members:
    20         (1)  Three members of the public, appointed by the
    21     President pro tempore of the Senate, one of whom must
    22     represent the interests of senior citizens.
    23         (2)  Three members of the public, appointed by the
    24     Speaker of the House of Representatives, one of whom must
    25     represent the interests of senior citizens.
    26         (3)  Two members of the health care community who are
    27     authorized by the laws of this Commonwealth to prescribe
    28     drugs, appointed by the Governor.
    29         (4)  Two pharmacists, appointed by the Governor. To be
    30     appointed to and remain on the commission, each pharmacist
    20010H0444B0624                  - 6 -

     1     must:
     2             (i)  Be licensed to practice pharmacy and be engaged
     3         in the practice of retail pharmacy in this Commonwealth.
     4             (ii)  Have at least five years of experience in this
     5         Commonwealth as a licensed pharmacist.
     6             (iii)  Be a resident of this Commonwealth.
     7         (5)  The secretary and the Secretary of the Commonwealth
     8     or their designees, both of whom shall serve as ex officio,
     9     nonvoting members.
    10     (b)  Terms.--Members of the board serve for terms of three
    11  years and may be reappointed for a second term. Members shall
    12  serve until their successor is qualified.
    13     (c)  Meetings.--The board shall meet at lease once per month.
    14  All meetings shall be subject to 65 Pa.C.S. Ch. 7 (relating to
    15  open meetings).
    16     (d)  Duties.--The duties of the commission shall include, but
    17  not be limited to, the following:
    18         (1)  To review access to prescription drugs for residents
    19     of this Commonwealth including, but not limited to, pricing
    20     and affordability information.
    21         (2)  To advise the secretary on access to prescription
    22     drugs and prescription drug prices, including, but not
    23     limited to:
    24             (i)  Insurance and third-party payments for
    25         prescription drugs.
    26             (ii)  The need for maximum retail prices.
    27             (iii)  If maximum retail prices are established, the
    28         procedures for adoption and periodic review of maximum
    29         retail prices.
    30             (iv)  The procedures for establishing maximum retail
    20010H0444B0624                  - 7 -

     1         prices for new prescription drugs and for reviewing
     2         maximum retail prices of selected drugs.
     3             (v)  The procedures for phasing out or terminating
     4         maximum retail prices.
     5         (3)  To advise the secretary on the adoption of rules
     6     necessary to implement this chapter.
     7         (4)  To report to the secretary, the General Assembly and
     8     the Governor by April 1, 2002, and annually thereafter by the
     9     second week in January, any recommendations for action
    10     regarding access to and the pricing of the prescription
    11     drugs.
    12     (e)  Director; staffing.--The secretary shall appoint a
    13  director who shall perform the duties delegated by the
    14  commission, including the administration of staff assigned to
    15  the commission. The department shall provide appropriate levels
    16  of staffing to assist the commission.
    17     (f)  Cooperation.--In performing its duties, the commission
    18  shall cooperate and work with the department, the Department of
    19  Aging, the Department of Revenue, the Department of State and
    20  the Department of Public Welfare, the Secretary of
    21  Administration, the State Employees' Retirement Board, the
    22  Public School Employees' Retirement Board, the State Board of
    23  Pharmacy and the Bureau of Professional and Occupational
    24  Affairs.
    25  Section 302.  Emergency drug pricing.
    26     (a)  Emergency drug pricing procedures.--The following
    27  provisions apply to determinations regarding maximum retail
    28  prices for prescription drugs and to the procedures for
    29  establishing those prices.
    30         (1)  By July 1, 2003, the department shall adopt rules
    20010H0444B0624                  - 8 -

     1     and regulations establishing the procedures for adoption and
     2     periodic review of maximum retail prices, the procedures for
     3     establishing maximum retail prices for new prescription drugs
     4     and for reviewing maximum retail prices of selected drugs and
     5     the procedures for phasing out or terminating maximum retail
     6     prices. The secretary shall consult with and consider the
     7     recommendations of the commission regarding the rules prior
     8     to adopting rules pursuant to this subsection.
     9         (2)  By January 5, 2004, the secretary shall determine
    10     whether the cost of prescription drugs provided to qualified
    11     residents under the Pennsylvania Rx Program is reasonably
    12     comparable to the lowest cost paid for the same drugs
    13     delivered or dispensed in this Commonwealth. In making this
    14     determination the following provisions shall apply:
    15             (i)  The secretary shall review prescription drug use
    16         in the Medicaid program using data from the most recent
    17         six-month period for which data is available.
    18             (ii)  The secretary shall determine the 100 drugs for
    19         which the most units were provided and the 100 drugs for
    20         which the total cost was the highest, using the data
    21         reviewed in subparagraph (i).
    22             (iii)  The secretary shall determine the cost of each
    23         prescription drug listed in subparagraph (ii) for
    24         qualified residents provided those drugs under the
    25         Pennsylvania Rx Program on a certain date. The average
    26         cost for each such drug must be calculated.
    27             (iv)  The secretary shall determine the lowest cost
    28         of each prescription drug listed in subparagraph (ii)
    29         paid by any purchaser on the date that is used for
    30         subparagraph (iii) delivered or dispensed in this
    20010H0444B0624                  - 9 -

     1         Commonwealth, taking into consideration the Federal
     2         supply schedule and prices paid by pharmaceutical
     3         benefits managers and by large purchasers and excluding
     4         drugs purchased through the Pennsylvania Rx Program. The
     5         average cost for each such drug must be calculated.
     6             (v)  The secretary shall establish maximum retail
     7         prices for any or all prescription drugs sold in this
     8         Commonwealth if the average cost for one or more
     9         prescription drugs under the Pennsylvania Rx Program as
    10         determined in subparagraph (iii) is not reasonably
    11         comparable to the average lowest cost for the same drug
    12         or drugs as determined in subparagraph (iv). Maximum
    13         prescription drug prices established under this
    14         subparagraph must take effect July 1, 2004.
    15         (3)  In establishing maximum retail prices under this
    16     paragraph, the secretary shall consider the advice of the
    17     commission and shall follow procedures set forth by rules and
    18     regulations adopted by the department.
    19     (b)  Select prescription drugs.--In making a determination
    20  under this section, the secretary may rely on pricing
    21  information on a selected number of prescription drugs if that
    22  list is representative of the prescription drug needs of the
    23  residents of this Commonwealth and is made public as part of the
    24  process of establishing maximum retail prices.
    25     (c)  Public health or welfare.--The secretary may take
    26  actions that the secretary determines necessary if there is a
    27  severe limitation or shortage of or lack of access to
    28  prescription drugs in this Commonwealth that could threaten or
    29  endanger the public health or welfare.
    30  Section 303.  Appeals by retailer.
    20010H0444B0624                 - 10 -

     1     (a)  Appeals.--A retailer of prescription drugs may appeal
     2  the maximum retail price of a prescription drug established
     3  pursuant to this section to the secretary.
     4     (b)  Commonwealth court.--Rulings on appeals by the
     5  commission may be appealed to the Commonwealth Court.
     6     (c)  Effect of appeal.--The filing of an appeal shall not
     7  delay the implementation of the maximum price imposed by the
     8  commission.
     9     (d)  Enforcement.--A violation of the maximum retail prices
    10  established under this section shall be deemed a violation of
    11  the act of December 17, 1968 (P.L.1224, No.387), known as the
    12  Unfair Trade Practices and Consumer Protection Law.
    13                             CHAPTER 5
    14                      PENNSYLVANIA RX PROGRAM
    15  Section 501.  Pennsylvania Rx Program.
    16     (a)  Establishment.--The Pennsylvania Rx Program is
    17  established to reduce prescription drug prices for residents of
    18  this Commonwealth. The program is designed for the Commonwealth
    19  to utilize manufacturer rebates and pharmacy discounts to reduce
    20  prescription drug prices. In implementing the program, the
    21  Commonwealth shall serve as a pharmacy benefit manager in
    22  establishing rebates and discounts on behalf of qualified
    23  residents.
    24     (b)  Goals.--The General Assembly finds that affordability is
    25  critical in providing access to prescription drugs for
    26  Commonwealth residents. This chapter is enacted by the General
    27  Assembly to enable the Commonwealth to act as a pharmacy benefit
    28  manager in order to make prescription drugs more affordable for
    29  qualified Commonwealth residents, thereby increasing the overall
    30  health of Commonwealth residents, promoting healthy communities
    20010H0444B0624                 - 11 -

     1  and protecting the public health and welfare. It is not the
     2  intention of the Commonwealth to discourage employers from
     3  offering or paying for prescription drug benefits for their
     4  employees or to replace employer-sponsored prescription drug
     5  benefit plans that provide benefits comparable to those made
     6  available to qualified Commonwealth residents under this
     7  chapter.
     8  Section 502.  Rebate agreement.
     9     A drug manufacturer or labeler that sells prescription drugs
    10  in this Commonwealth through a State-sponsored program shall
    11  enter into a rebate agreement with the department for this
    12  program. The rebate agreement must require the manufacturer or
    13  labeler to make rebate payments to the Commonwealth each
    14  calendar quarter or according to a schedule established by the
    15  department.
    16  Section 503.  Rebate amount.
    17     The secretary shall negotiate the amount of the rebate
    18  required from a manufacturer or labeler in accordance with this
    19  section, taking into consideration:
    20         (1)  The rebate calculated under the Medicaid Rebate
    21     Program pursuant to 42 U.S.C. § 1396r-8, the average
    22     wholesale price of prescription drugs and any other
    23     information on prescription drug prices and price discounts.
    24         (2)  Obtaining an initial rebate amount equal to or
    25     greater than the rebate calculated under the Medicaid Rebate
    26     Program pursuant to 42 U.S.C. § 1396r-8.
    27         (3)  Obtaining an amount equal to or greater than the
    28     amount of any discount, rebate or price reduction for
    29     prescription drugs provided to the Federal Government with
    30     respect to the rebate taking effect no later than October 1,
    20010H0444B0624                 - 12 -

     1     2001.
     2  Section 504.  Discounted prices for qualified residents.
     3     (a)  Discount.--Any participating retail pharmacy that sells
     4  prescription drugs covered by a rebate agreement pursuant to
     5  section 502 shall discount the retail price of those drugs sold
     6  to qualified residents.
     7     (b)  Establishment.--The department shall establish
     8  discounted prices for drugs covered by a rebate agreement and
     9  shall promote the use of efficacious and reduced-cost drugs,
    10  taking into consideration reduced prices for Commonwealth and
    11  federally capped drug programs, differential dispensing fees,
    12  administrative overhead and incentive payments.
    13     (c)  Initial discounted price.--A participating retail
    14  pharmacy shall offer the initial discounted price beginning
    15  January 1, 2002.
    16     (d)  Secondary discounted price.--A participating retail
    17  pharmacy shall offer the secondary discounted price no later
    18  than October 1, 2002.
    19     (e)  Amount of discounted prices.--The department shall
    20  consider an average of all rebates provided pursuant to section
    21  503, weighted by sales of drugs subject to these rebates over
    22  the most recent 12-month period for which the information is
    23  available in determining the amount of discounted prices.
    24  Section 505.  Operation of program.
    25     (a)  Requirements.--The requirements of this section shall
    26  apply to participating retail pharmacies.
    27     (b)  Disclosure.--The State Board of Pharmacy shall adopt
    28  rules and regulations requiring disclosure by participating
    29  retail pharmacies to qualified residents of the amount of
    30  savings provided as a result of the program. The rules must
    20010H0444B0624                 - 13 -

     1  consider and protect information that is proprietary in nature.
     2     (c)  Charges.--The department may not impose transaction
     3  charges under this program on retail pharmacies that submit
     4  claims or receive payments under the program.
     5     (d)  Verification.--A participating retail pharmacy shall
     6  submit claims to the department to verify the amount charged to
     7  qualified residents under section 504.
     8     (e)  Reimbursement.--The department must reimburse a
     9  participating retail pharmacy for discounted prices provided to
    10  qualified residents under section 504 and professional fees on a
    11  weekly or biweekly basis, which must be set by the secretary.
    12  The amount of the initial professional fee must be set at $3 per
    13  prescription.
    14     (f)  Confidentiality.--The department shall collect
    15  utilization data from the participating retail pharmacies
    16  submitting claims necessary to calculate the amount of the
    17  rebate from the manufacturer or labeler. The department shall
    18  protect the confidentiality of all information subject to
    19  confidentiality protection under Federal or State law.
    20  Section 506.  Action with regard to nonparticipating
    21                 manufacturers and labelers.
    22     The names of manufacturers and labelers who do not enter into
    23  rebate agreements pursuant to this chapter are public
    24  information. The department shall release this information to
    25  health care providers and the public. The department shall
    26  impose prior authorization requirements in the Medicaid program,
    27  as permitted by law, for the dispensing of prescription drugs
    28  provided by those manufacturers and labelers.
    29  Section 507.  Discrepancies in rebate amounts.
    30     Discrepancies in rebate amounts shall be resolved using the
    20010H0444B0624                 - 14 -

     1  process established in this section:
     2         (1)  If there is a discrepancy in the manufacturer's or
     3     labeler's favor between the amount claimed by a pharmacy and
     4     the amount rebated by the manufacturer or labeler, the
     5     department, at the department's expense, may hire a mutually
     6     agreed-upon independent auditor. If a discrepancy still
     7     exists following the audit, the manufacturer or labeler shall
     8     justify the reason for the discrepancy or make payment to the
     9     department for any additional amount due.
    10         (2)  If there is a discrepancy against the interest of
    11     the manufacturer or labeler in the information provided by
    12     the department to the manufacturer or labeler regarding the
    13     manufacturer's or labeler's rebate, the manufacturer or
    14     labeler, at the manufacturer's or labeler's expense, may hire
    15     a mutually agreed-upon independent auditor to verify the
    16     accuracy of the data supplied to the department. If a
    17     discrepancy still exists following the audit, the department
    18     shall justify the reason for the discrepancy or refund to the
    19     manufacturer any excess payment made by the manufacturer or
    20     labeler.
    21  Section 508.  Pennsylvania Rx Fund.
    22     (a)  Establishment.--The Pennsylvania Rx Fund is established
    23  to receive revenue from manufacturers and labelers who pay
    24  rebates as provided in section 502 and any appropriations or
    25  allocations designated for the fund.
    26     (b)  Purposes.--The purposes of the fund are to:
    27         (1)  Reimburse retail pharmacies for discounted prices
    28     provided to qualified residents pursuant to section 504.
    29         (2)  Reimburse the department for contracted services,
    30     administrative and associated computer costs, professional
    20010H0444B0624                 - 15 -

     1     fees paid to participating retail pharmacies and other
     2     reasonable program costs.
     3         (3)  Benefit the PACE and PACENET programs.
     4  Section 509.  Annual summary report.
     5     The department shall report the enrollment and financial
     6  status of the program to the General Assembly by the second week
     7  in January each year.
     8  Section 510.  Obligations of department.
     9     The department shall establish simplified procedures for
    10  determining eligibility and issuing Pennsylvania Rx enrollment
    11  cards to qualified residents and shall undertake outreach
    12  efforts to build public awareness of the program and maximize
    13  enrollment of qualified residents. The department may adjust the
    14  requirements and terms of the program to accommodate any new
    15  federally funded prescription drug programs.
    16  Section 511.  Contracting.
    17     The department may contract with a third party or third
    18  parties to administer any or all components of the program,
    19  including, but not limited to, outreach, eligibility, claims,
    20  administration and rebate recovery and redistribution.
    21  Section 512.  Medical assistance programs.
    22     The department shall administer the program and other medical
    23  and pharmaceutical assistance programs in a manner that is
    24  advantageous to the programs and to the enrollees in those
    25  programs. In implementing this section, the department may
    26  coordinate the other programs and this program and may take
    27  actions to enhance efficiency, reduce the cost of prescription
    28  drugs and maximize the benefits to the programs and enrollees,
    29  including providing the benefits of this program to enrollees in
    30  other programs.
    20010H0444B0624                 - 16 -

     1  Section 513.  Rules and regulations.
     2     The department shall adopt rules and regulations to implement
     3  this section.
     4  Section 514.  Waivers.
     5     The department may seek any waivers of Federal law, rule or
     6  regulation necessary to implement the provision of this chapter.
     7                             CHAPTER 7
     8                 PROFITEERING IN PRESCRIPTION DRUGS
     9  Section 701.  Profiteering in prescription drugs.
    10     (a)  Profiteering.--A manufacturer, distributor or labeler of
    11  prescription drugs engages in illegal profiteering if that
    12  manufacturer, distributor or labeler:
    13         (1)  exacts or demands an unconscionable price;
    14         (2)  exacts or demands prices or terms that lead to any
    15     unjust or unreasonable profit;
    16         (3)  discriminates unreasonably against any person in the
    17     sale, exchange, distribution or handling of prescription
    18     drugs dispensed or delivered in this Commonwealth; or
    19         (4)  intentionally prevents, limits, lessens or restricts
    20     the sale or distribution of prescription drugs in this
    21     Commonwealth in retaliation for the provisions of this
    22     chapter.
    23     (b)  Right of action and damages.--The Commonwealth may bring
    24  a civil action for a direct or indirect injury to any person,
    25  group of persons, the Commonwealth or a political subdivision of
    26  the Commonwealth caused by a violation of this chapter. If the
    27  Commonwealth prevails, the defendant shall pay treble damages
    28  and the costs of suit, including necessary and reasonable
    29  investigative costs, reasonable expert fees and reasonable
    30  attorney fees. Punitive damages may be awarded for a willful or
    20010H0444B0624                 - 17 -

     1  repeated violation of this section. The damages must be
     2  equitably distributed by the Commonwealth to all injured parties
     3  after deductions of the costs of distribution.
     4     (c)  Civil violation.--Each violation of this section is a
     5  civil violation for which the Attorney General may obtain, in
     6  addition to other remedies, injunctive relief and a civil
     7  penalty in an amount not to exceed $100,000, plus the costs of
     8  suit, including necessary and reasonable investigative costs,
     9  reasonable expert fees and reasonable attorney fees.
    10     (d)  Unfair trade practice.--A violation of this section
    11  shall be deemed a violation of the act of December 17, 1968
    12  (P.L.1224, No.387), known as the Unfair Trade Practices and
    13  Consumer Protection Law.
    14  Section 702.  Investigation by Attorney General.
    15     The Attorney General, upon the Attorney General's own
    16  initiative or upon petition of the secretary or of 50 or more
    17  residents of this Commonwealth, shall investigate suspected
    18  violations of this chapter.
    19  Section 703.  Agreements with governments of other jurisdictions
    20                 and other entities.
    21     The Commonwealth may negotiate and enter into purchasing
    22  alliances and regional strategies with the governments of other
    23  jurisdictions and with other public and private entities for the
    24  purpose of reducing prescription drug prices for residents of
    25  this Commonwealth.
    26                             CHAPTER 49
    27                      MISCELLANEOUS PROVISIONS
    28  Section 4901.  Appointments and first meeting of Pennsylvania
    29                 Prescription Drug Advisory Commission.
    30     All appointments must be completed no later than 30 days
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     1  following the effective date of this act. The director shall
     2  call the first meeting of the commission within 30 days after
     3  the appointments have been completed.
     4  Section 4902.  Effective date.
     5     This act shall take effect in 60 days.

















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