PRINTER'S NO. 1016
No. 835 Session of 2003
INTRODUCED BY CONTI, LEMMOND, RAFFERTY, MOWERY, TARTAGLIONE,
C. WILLIAMS, RHOADES, HELFRICK, COSTA AND BOSCOLA,
JUNE 24, 2003
REFERRED TO AGING AND YOUTH, JUNE 24, 2003
AN ACT
1 Amending the act of August 26, 1971 (P.L.351, No.91), entitled
2 "An act providing for a State Lottery and administration
3 thereof; authorizing the creation of a State Lottery
4 Commission; prescribing its powers and duties; disposition of
5 funds; violations and penalties therefor; exemption of prizes
6 from State and local taxation and making an appropriation,"
7 establishing the Prescription Drug Access Clearinghouse
8 Authority and providing for its powers and duties.
9 The General Assembly of the Commonwealth of Pennsylvania
10 hereby enacts as follows:
11 Section 1. The act of August 26, 1971 (P.L.351, No.91),
12 known as the State Lottery Law, is amended by adding a chapter
13 to read:
14 CHAPTER 7-A
15 PRESCRIPTION DRUG ACCESS CLEARINGHOUSE AUTHORITY
16 Section 701-A. Definitions.
17 The following words and phrases when used in this chapter
18 shall have the meanings given to them in this section unless the
19 context clearly indicates otherwise:
20 "Authority." The Prescription Drug Access Clearinghouse
1 Authority established by this chapter.
2 "Board." The board of directors of the Prescription Drug
3 Access Clearinghouse Authority.
4 "Discount plan." A prescription drug discount plan.
5 "Discount program." The Prescription Drug Discount Program
6 under section 707-A.
7 "PACE." As defined in section 502.
8 "PACENET." As defined in section 502.
9 Section 702-A. Establishment and duties of authority.
10 (a) Authority established.--The Prescription Drug Access
11 Clearinghouse Authority is hereby established to assist citizens
12 with accessing prescription drug services at affordable prices.
13 (b) Duties of authority.--The authority shall:
14 (1) Disseminate information and advertise programs that
15 will assist citizens with purchasing prescription drugs at a
16 lower cost.
17 (2) Provide specific assistance to State residents to
18 facilitate greater participation in the PACE and PACENET
19 programs.
20 (3) Assist State residents with enrolling in programs
21 such as PACE, PACENET and Medicaid and that may provide for
22 prescription drug coverage for which they may be eligible.
23 (4) Assist residents of this Commonwealth with assessing
24 discount programs or insurance programs that may be of
25 benefit to them.
26 (5) Perform studies to identify additional strategies
27 that may help improve access by Commonwealth residents to
28 prescription drugs and provide appropriate reports to the
29 Governor and General Assembly.
30 (6) Serve as a general resource responsible for
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1 promoting the interest of residents of this Commonwealth on
2 prescription drug access issues.
3 Section 703-A. Authority board of directors.
4 (a) Membership.--The authority shall be governed by a 13-
5 member board of directors as follows:
6 (1) Four members appointed by the Governor, one of whom
7 shall be a consumer representative and one of whom shall have
8 knowledge of pharmaceutical benefit programs.
9 (2) Two members appointed by the Majority Leader of the
10 Senate, one of whom shall be a practicing pharmacist.
11 (3) Two members appointed by the Minority Leader of the
12 Senate, one of whom shall have knowledge of group procurement
13 practices.
14 (4) Two members appointed by the Majority Leader of the
15 House of Representatives, one of whom shall have experience
16 in operations of group health plans.
17 (5) Two members appointed by the Minority Leader of the
18 House of Representatives, one of whom shall represent
19 individuals in this Commonwealth who are elderly or have
20 disabilities.
21 (6) The executive director of the authority, to be
22 selected by the other members of the board, who shall serve
23 as an ex officio, voting member of the board.
24 (b) Executive director.--The executive director of the
25 authority shall be the chief executive officer of the authority
26 and presiding officer of the board of directors.
27 (c) Compensation.--Except for the executive director,
28 members of the board shall receive no compensation for their
29 services but shall be reimbursed for their necessary expenses
30 incurred while serving as board members.
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1 (d) Vacancies.--A vacancy on the board shall be filled by
2 the appointing authority for the balance of the term.
3 (e) Terms of members.--
4 (1) Initial terms of appointed members shall be as
5 follows:
6 (i) The Governor shall appoint one member for two
7 years.
8 (ii) The Majority Leader of the Senate shall appoint
9 one member for two years.
10 (iii) The Minority Leader of the Senate shall
11 appoint one member for two years.
12 (iv) The Majority Leader of the House of
13 Representatives shall appoint one member for two years.
14 (v) The Minority Leader of the House of
15 Representatives shall appoint one member for two years.
16 (vi) The remaining members shall be appointed for
17 four years.
18 (2) Each subsequent term of a member shall be for four
19 years and until a successor is appointed and qualified.
20 Except for the executive director, members may serve only two
21 consecutive full terms. Any member of the board may be
22 removed by the Governor or by a majority of the other board
23 members for malfeasance in office, failure to attend
24 regularly scheduled meetings, or for any cause that renders
25 the member incapable of for unfit to discharge the duties of
26 a director.
27 (f) Meetings.--Meetings of the board shall be subject to 65
28 Pa.C.S. Ch. 7 (relating to open meetings) and the act of June
29 21, 1957 (P.L.390, No.212), referred to as the Right-to-Know
30 Law. A quorum for a meeting shall be a majority of the total
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1 membership of the board. Any action of the board of directors
2 requires the affirmative vote of a majority of a quorum.
3 (g) Conflicts of interest.--No part of the revenues or
4 assets of the authority may inure to the benefit of, or be
5 distributed to, its board of directors or officers or any other
6 private person or entity. Any member of the board of directors
7 and any employee or other agent or advisor of the authority, who
8 has a direct or indirect interest in a pharmaceutical
9 manufacturer, pharmacy, discount program, insurance program or
10 in any contract or transaction with the authority, must disclose
11 this interest to the authority. If a board member has an
12 interest in a transaction, then the member may not participate
13 in the deliberations or voting on such a transaction. The status
14 of the authority's chief executive officer, in and of itself,
15 does not constitute a conflicting interest.
16 (h) Personnel.--A State employee who elects to become an
17 employee of the authority shall receive full credit from the
18 authority for sick leave and annual leave accrued while employed
19 by the State. The authority may establish and administer its own
20 personnel program, including a wage and benefit structure for
21 authority employees. Authority employees may participate in and
22 be eligible for enrollment in the Commonwealth retirement system
23 established pursuant to 71 Pa.C.S. Pt. XXV (relating to
24 retirement for State employees and officers).
25 Section 704-A. General powers of authority.
26 The authority shall have the general powers of an independent
27 corporate entity, including the following:
28 (1) To have the duties, privileges, immunities, rights,
29 powers, liabilities and obligations of a body corporate and
30 politic.
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1 (2) To enroll residents in State programs offering a
2 prescription drug benefit after entering into a memorandum of
3 understanding with the relevant agency regarding coordination
4 of enrollment procedures.
5 (3) To provide counseling and guidance to residents of
6 this Commonwealth regarding existing Federal, State or
7 private programs, including manufacturer assistance programs,
8 that may be available to help address individual needs.
9 (4) To evaluate or rate prescription drug programs,
10 insurance programs and discount programs according to
11 criteria determined by the authority in advance, so long as
12 the authority deems the evaluation or ratings useful to
13 members of the public.
14 (5) To advertise the availability of any public or
15 private program offering prescription drug benefits to
16 members of the public in accordance with criteria the
17 authority determines will advance the public's ability to
18 acquire quality prescription drugs at lower cost.
19 (6) To enter into any contract, agreement or other
20 instrument necessary or convenient in the exercise of the
21 powers and functions of the authority that are not
22 inconsistent with the laws of this Commonwealth.
23 (7) To manage its own finances and deposit funds into
24 independent banking accounts.
25 (8) To contract for and to accept any grants and loans
26 of funds, property or any other aid in any form from the
27 Federal or State government sources, or any other source, or
28 any combination thereof.
29 (9) To appoint agents, employees and professional and
30 business advisers as may from time to time be necessary in
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1 its judgment to accomplish the purposes of the authority and
2 to fix the compensation of its officers, employees, agents
3 and advisers, and to establish the powers and duties of its
4 agents, officers, employees and other persons contracting
5 with the authority.
6 Section 705-A. Construction.
7 Nothing in this chapter shall be construed as a restriction
8 or limitation upon any other powers which the authority might
9 otherwise have under any other law of this Commonwealth.
10 Section 706-A. Exemption from taxation.
11 Any real property acquired, maintained and operated by the
12 authority under this chapter shall not be subject to taxation by
13 any political subdivision or local taxing authority. The
14 authority is exempt from sales and use taxes imposed under
15 Article II of the act of March 4, 1971 (P.L.6, No.2), known as
16 the Tax Reform Code of 1971, for purchases acquired and used for
17 its public purposes.
18 Section 707-A. Availability of discount programs.
19 (a) General rule.--The authority shall administer a
20 prescription drug discount program. The authority shall
21 establish public-private partnerships using a process to
22 identify multiple-private sector prescription drug discount
23 plans that will accept enrollment from any eligible resident of
24 this Commonwealth; provide enrollees with enhanced access to
25 prescription drugs; and engage in ongoing competition for
26 enrollees on the basis of access, cost and quality of service
27 and product offered.
28 (b) Contract standards.--The authority shall issue requests
29 for proposals for participation by private sector prescription
30 drug discount plans on an annual or biannual basis as necessary,
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1 to ensure that residents of this Commonwealth have access to
2 multiple plans throughout this Commonwealth.
3 (c) Eligibility.--Any resident of this Commonwealth is
4 eligible for the discount program under this chapter.
5 (d) Subsidy.--The Commonwealth shall subsidize
6 administrative costs associated with the discount program,
7 including the authority's efforts to actively endorse and
8 promote the selected discount plans. The Commonwealth is not
9 responsible for subsidizing the direct cost of prescription
10 drugs under this discount program.
11 (e) Out-of-pocket costs.--Enrollees in the discount program
12 are responsible for all costs of prescription drugs that they
13 may purchase at discounted rates as available under competing
14 prescription drug plans participating in the discount program.
15 (f) Enrollment.--Participation in the discount program is
16 contingent upon enrollment and selection of a discount plan. The
17 authority shall establish an annual open enrollment period and
18 may prevent residents from changing plans during the course of a
19 year unless a discount plan's contract is revoked or the
20 discount plan becomes unable to deliver services.
21 (g) Participation.--Participation in the discount program is
22 voluntary. Enrollees are permitted to purchase prescription
23 drugs outside of the discount program at any time.
24 (h) Enrollment fee.--The authority may authorize discount
25 plans to collect a modest enrollment fee up to $25 from each
26 individual enrolling in the discount plans on a sliding fee
27 schedule.
28 (i) Consumer choice.--Eligible residents shall be given a
29 choice of discount plans in which to participate. The authority
30 may, at its discretion, create categories of plans to address
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1 different consumer needs.
2 (j) Nonexclusivity.--Residents of this Commonwealth may
3 enroll in a discount plan regardless of whether they have other
4 prescription drug insurance coverage or other coverage.
5 (k) Plan selection.--Subject to public notice and comment
6 and in consultation with industry representatives, the authority
7 shall issue requests for proposals from discount plans, such as
8 discount card programs, pharmacy chain discount programs,
9 pharmaceutical benefit managers and other qualifying entities
10 capable of delivering lower prices to residents of this
11 Commonwealth. In designing the criteria for evaluating the
12 responses, the authority shall take into account the quality of
13 the services to be provided and the savings generated for
14 residents of this Commonwealth. The authority may take into
15 account other factors, including geographic coverage, product
16 differentiation, the need to target different populations within
17 this Commonwealth, mail order service, coverage of rural areas
18 and other factors as determined by the authority. If the
19 authority receives multiple qualifying proposals in a category,
20 the authority must approve at least two contractors in each
21 category, but may, at its sole discretion, limit the maximum
22 number of contractors in each category.
23 (l) Applicability.--The discount program applies to
24 medically necessary prescription drugs and biologicals provided
25 to patients in outpatient pharmacies. Under all circumstances,
26 there must be at least two drugs equally available to enrollees
27 in each therapeutic class or subclass of pharmaceutical agents.
28 The authority, through the contracting process, shall ensure
29 adequate access to medically necessary prescription drugs.
30 Section 2. This act shall take effect in 60 days.
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