PRINTER'S NO. 2123
No. 1525 Session of 2000
INTRODUCED BY COSTA, MELLOW, BODACK, O'PAKE, STAPLETON, FUMO, MUSTO, STOUT, TARTAGLIONE, BELAN, BOSCOLA, HUGHES, KASUNIC, KITCHEN, KUKOVICH, LAVALLE, SCHWARTZ, WAGNER, WILLIAMS AND WOZNIAK, SEPTEMBER 25, 2000
REFERRED TO AGING AND YOUTH, SEPTEMBER 25, 2000
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 eliminating the PACENET program; providing for a single 8 pharmacy benefits manager for a Drug Utilization Review 9 Committee and its duties and for rebate agreements governing 10 reimbursement by certain public plans; and imposing powers 11 and duties on the Department of Aging. 12 The General Assembly of the Commonwealth of Pennsylvania 13 hereby enacts as follows: 14 Section 1. The definitions of "PACENET" and "program" in 15 section 502 of the act of August 26, 1971 (P.L.351, No.91), 16 known as the State Lottery Law, added November 21, 1996 17 (P.L.741, No.134), are amended to read: 18 Section 502. Definitions. 19 The following words and phrases when used in this chapter 20 shall have the meanings given to them in this section unless the 21 context clearly indicates otherwise:
1 * * * 2 ["PACENET." The Pharmaceutical Assistance Contract for the 3 Elderly Needs Enhancement Tier provided for in this chapter.] 4 * * * 5 "Program." The Pharmaceutical Assistance Contract for the 6 Elderly (PACE) [and the Pharmaceutical Assistance Contract for 7 the Elderly Needs Enhancement Tier (PACENET)] as established by 8 this chapter, unless otherwise specified. 9 * * * 10 Section 2. Sections 519 and 521(b) and (d) of the act, added 11 November 21, 1996 (P.L.741, No.134), are amended to read: 12 [Section 519. The Pharmaceutical Assistance Contract for the 13 Elderly Needs Enhancement Tier. 14 (a) Establishment.--There is hereby established within the 15 department a program to be known as the Pharmaceutical 16 Assistance Contract for the Elderly Needs Enhancement Tier 17 (PACENET). 18 (b) PACENET eligibility.--A claimant with an annual income 19 of not less than $14,000 and not more than $16,000 in the case 20 of a single person and of not less than $17,200 and not more 21 than $19,200 in the case of the combined income of persons 22 married to each other shall be eligible for enhanced 23 pharmaceutical assistance under this section. A person may, in 24 reporting income to the department, round the amount of each 25 source of income and the income total to the nearest whole 26 dollar, whereby any amount which is less than 50¢ is eliminated. 27 (c) Deductible.--Upon enrollment in PACENET, eligible 28 claimants in the income ranges set forth in subsection (b) shall 29 be required to meet an annual deductible in unreimbursed 30 prescription drug expenses of $500 per person. To qualify for 20000S1525B2123 - 2 -
1 the deductible set forth in this subsection the prescription 2 drug must be purchased for the use of the eligible claimant from 3 a provider as defined in this chapter. The department, after 4 consultation with the board, may approve an adjustment in the 5 deductible on an annual basis. 6 (d) Copayment.--For eligible claimants under this section, 7 the copayment schedule, which may be adjusted by the department 8 on an annual basis after consultation with the board, shall be: 9 (i) eight dollars for noninnovator multiple source 10 drugs as defined in section 702; or 11 (ii) fifteen dollars for single-source drugs and 12 innovator multiple-source drugs as defined in section 13 702.] 14 Section 521. Penalties. 15 * * * 16 (b) Civil penalty.--In addition to any appropriate criminal 17 penalty for prohibited acts under this chapter whether or not 18 that act constitutes a crime under 18 Pa.C.S. (relating to 19 crimes and offenses), a provider who violates this section may 20 be liable for a civil penalty in an amount not less than $500 21 and not more than $10,000 for each violation of this act which 22 shall be collected by the department. Each violation constitutes 23 a separate offense. If the department collects three or more 24 civil penalties against the same provider, the provider shall be 25 ineligible to participate in [either] PACE [or PACENET] for a 26 period of one year. If more than three civil penalties are 27 collected from any provider, the department may determine that 28 the provider is permanently ineligible to participate in PACE 29 [or PACENET]. 30 * * * 20000S1525B2123 - 3 -
1 (d) Repayment of gain.--Any provider, recipient or other 2 person who is found guilty of a crime for violating this chapter 3 shall repay three times the value of the material gain received. 4 In addition to the civil penalty authorized pursuant to 5 subsection (b), the department may require the provider, 6 recipient or other person to repay up to three times the value 7 of any material gain to PACE [or PACENET]. 8 Section 3. The definitions of "covered prescription drug," 9 "PACENET" and "provider" in section 702 of the act, added 10 November 21, 1996 (P.L.741, No.134), are amended to read: 11 Section 702. Definitions. 12 The following words and phrases when used in this chapter 13 shall have the meanings given to them in this section unless the 14 context clearly indicates otherwise: 15 * * * 16 "Covered prescription drug." A legend drug, insulin, an 17 insulin syringe or an insulin needle eligible for payment by the 18 Commonwealth under PACE[, PACENET] or designated pharmaceutical 19 programs. 20 * * * 21 ["PACENET." The program established under section 519.] 22 * * * 23 "Provider." A licensed pharmacy or dispensing physician 24 enrolled as a provider in PACE[, PACENET] or designated 25 pharmaceutical programs. 26 * * * 27 Section 4. Sections 703, 704(b)(1), 705(a)(2) and (c), 28 706(b) and 709 of the act, added November 21, 1996 (P.L.741, 29 No.134), are amended to read: 30 Section 703. Rebate agreement. 20000S1525B2123 - 4 -
1 (a) Requirement.--PACE[, PACENET] and designated 2 pharmaceutical programs shall not reimburse for any covered 3 prescription drug without a rebate agreement between the 4 department and the manufacturer of the covered prescription 5 drug. 6 (b) Exception.--Subsection (a) shall not apply if the 7 availability of the drug is essential to the health of eligible 8 claimants as determined by the department. 9 (c) Agreements.--Manufacturers of prescription drugs 10 reimbursed under PACE[, PACENET] and designated pharmaceutical 11 programs must enter into a rebate agreement with the department 12 under this chapter to obtain such reimbursement. Nothing in this 13 chapter shall be deemed to affect or impair any agreement made 14 under the former provisions of Chapter 6 of the act of August 15 14, 1991 (P.L.342, No.36), known as the Lottery Fund 16 Preservation Act. 17 (d) Notice.--The department shall notify enrolled providers 18 of PACE[, PACENET] and designated pharmaceutical programs on an 19 annual basis and, as appropriate, of all manufacturers who have 20 entered into a rebate agreement. 21 (e) Drug formulary.--Except as provided in section 512, 22 there shall be no drug formulary, prior or retroactive approval 23 system or any similar restriction imposed on the coverage of 24 outpatient drugs made by manufacturers who have agreements in 25 effect with the Commonwealth to pay rebates for drugs utilized 26 in PACE [and PACENET], provided that such outpatient drugs were 27 approved for marketing by the Food and Drug Administration. This 28 subsection shall not apply to any act taken by the department 29 pursuant to its therapeutic drug utilization review program 30 under section 505. 20000S1525B2123 - 5 -
1 Section 704. Terms of rebate agreement. 2 * * * 3 (b) Information.-- 4 (1) The department shall report to each manufacturer, 5 not later than 60 days after the end of each calendar 6 quarter, information by zip code of provider on the total 7 number of dosage units of each covered prescription drug 8 reimbursed under PACE[, PACENET] and designated 9 pharmaceutical programs during the quarter. 10 * * * 11 Section 705. Amount of rebate. 12 (a) Single-source drugs and innovator multiple-source 13 drugs.--With respect to single-source drugs and innovator 14 multiple-source drugs, each manufacturer shall remit a rebate to 15 the Commonwealth. Except as otherwise provided in this section, 16 the amount of the rebate to the Commonwealth per calendar 17 quarter with respect to each dosage form and strength of single- 18 source drugs and innovator multiple-source drugs shall be as 19 follows: 20 * * * 21 (2) For quarters beginning after December 31, 1996, the 22 product of the total number of units of each dosage form and 23 strength reimbursed by PACE[, PACENET] and designated 24 pharmaceutical programs in the quarter and the difference 25 between the average manufacturer price and 83% of that price, 26 after deducting customary prompt payment discounts. 27 * * * 28 (c) Revised rebate for other drugs.--Beginning after 29 December 31, 1996: 30 (1) The amount of the rebate to the Commonwealth for a 20000S1525B2123 - 6 -
1 calendar quarter with respect to covered prescription drugs 2 which are noninnovator multiple-source drugs shall be the 3 greater of the product of: 4 (i) the applicable percentage of the average 5 manufacturer price, after deducting customary prompt 6 payment discounts, for each dosage form and strength of 7 such drugs for the quarter; and 8 (ii) the number of units of such form and dosage 9 reimbursed by PACE[, PACENET] and designated 10 pharmaceutical programs in the quarter. 11 (2) For purposes of paragraph (1), the applicable 12 percentage is 17%. 13 * * * 14 Section 706. Excessive pharmaceutical price inflation discount. 15 * * * 16 (b) Revised general rule.--A discount shall be provided to 17 the department for all covered prescription drugs. The discount 18 shall be calculated as follows: 19 (1) For each quarter for which a rebate under section 20 705(a) and (c) is to be paid after December 31, 1996, the 21 average manufacturer price for each dosage form and strength 22 of a covered prescription drug shall be compared to the 23 average manufacturer price for the same form and strength in 24 the previous calendar year and a percentage increase shall be 25 calculated. 26 (2) For each quarter under paragraph (1), the average 27 percentage increase in the Consumer Price Index-Urban over 28 the same quarter in the previous calendar year shall be 29 calculated. 30 (3) If the calculation under paragraph (1) is greater 20000S1525B2123 - 7 -
1 than the calculation under paragraph (2), the discount amount 2 for each quarter shall be equal to the product of: 3 (i) the difference between the calculations under 4 paragraphs (1) and (2); and 5 (ii) the total number of units of each dosage form 6 and strength reimbursed by PACE[, PACENET] and designated 7 pharmaceutical programs and the average manufacturer 8 price reported by the manufacturer under section 9 704(c)(1). 10 * * * 11 Section 709. Disposition of funds. 12 (a) PACE [and PACENET].--Money received under this chapter 13 in connection with PACE [and PACENET] shall be deposited in the 14 Pharmaceutical Assistance Contract for the Elderly Fund. 15 (b) Designated pharmaceutical programs.--Money received 16 under this chapter in connection with designated pharmaceutical 17 programs shall be treated as a refund of expenditures to the 18 appropriation which originally provided the funding for the 19 pharmaceutical purchase. 20 Section 5. The act is amended by adding a chapter to read: 21 CHAPTER 11 22 FAIR PRESCRIPTION DRUG PROVISIONS 23 Section 1101. Short title of chapter. 24 This chapter shall be known and may be cited as the Fair 25 Prescription Drug Act. 26 Section 1102. Definitions. 27 The following words and phrases when used in this chapter 28 shall have the meanings given to them in this section unless the 29 context clearly indicates otherwise: 30 "Best price." As defined under section 1927 of the Social 20000S1525B2123 - 8 -
1 Security Act (49 Stat. 620, 42 U.S.C. § 301 et seq.). 2 "Committee." The drug utilization review committee formed in 3 accordance with section 1105. 4 "Department." The Department of Aging of the Commonwealth. 5 "Medical Assistance Program." The program established 6 pursuant to Article IV, subarticle (f) of the act of June 13, 7 1967 (P.L.31, No.21), known as the Public Welfare Code. 8 "Medicare card." The identification card issued by the 9 Federal Government to all Medicare recipients. 10 "Medicare recipient." An individual residing in this 11 Commonwealth who receives benefits under Part A of Subchapter 12 XVIII of Chapter 7 of the Social Security Act (49 Stat. 620, 42 13 U.S.C. § 301 et seq.) or who is enrolled under Part B of such 14 subchapter. 15 "PACE." As defined under section 502. 16 "Pharmaceutical manufacturer." A manufacturer of 17 prescription drugs, insulin, insulin needles or insulin 18 syringes. 19 "Pharmacy." A pharmacy licensed by the Commonwealth. 20 "Pharmacy benefits manager" or "PBM." An entity under 21 contract with the Secretary of Aging to administer any 22 prescription program established by the Commonwealth or in which 23 a contribution by the Commonwealth is required. 24 "Pharmacy services." Medically necessary prescription drugs 25 and other pharmacy services furnished directly to eligible 26 recipients by pharmacies. 27 "Prescription drug." A drug requiring a prescription in this 28 Commonwealth, insulin, insulin syringes and insulin needles. The 29 term does not include experimental drugs or drugs prescribed for 30 wrinkle removal or hair growth. 20000S1525B2123 - 9 -
1 "Provider." A pharmacy or licensed prescriber who provides 2 pharmacy services to a recipient of any prescription program 3 established by the Commonwealth or in which a contribution by 4 the Commonwealth is required. 5 "Public plan." The PACE program, the Medical Assistance 6 Program, the State Employees' Benefit Trust Fund, the State 7 Employees' Retirement System, the Public School Employees' 8 Retirement System and any other State agency or designated 9 pharmaceutical program that purchases or arranges for the 10 purchase of prescription medications. 11 "Public School Employees' Retirement System." The retirement 12 system established by 24 Pa.C.S. Part IV (relating to retirement 13 for school employees). 14 "Secretary." The Secretary of Aging of the Commonwealth. 15 "State agency." Any agency under the jurisdiction of the 16 Governor, the General Assembly or the Unified Court System that 17 purchases or provides coverage for prescription medications. 18 "State Employees' Benefit Trust Fund." The trust fund 19 established to purchase health insurance coverage, including 20 coverage for prescription medications, for State employees. 21 "State Employees' Retirement System." The retirement system 22 established under 71 Pa.C.S. Part XXV (relating to retirement 23 for State employees and officers). 24 Section 1103. Single pharmacy benefits manager. 25 The secretary shall administer a single pharmacy benefits 26 manager program as described in this chapter. No later than 90 27 days from the effective date of this chapter, the secretary 28 shall issue a request for proposal for a three-year contract 29 with a pharmacy benefits manager to administer pharmacy services 30 as required under this chapter. The proposal shall require the 20000S1525B2123 - 10 -
1 PBM to educate providers and public plan recipients of pharmacy 2 services. No person, partnership, corporation or entity which 3 holds a 5% or greater interest in one or more pharmacies, a 4 chain of pharmacies, a pharmacists association, an organization 5 of pharmacies, a drug wholesaler or drug manufacturer and no 6 person, partnership, corporation or entity in which one or more 7 pharmacies, a chain of pharmacies, a pharmacists association, an 8 organization of pharmacies, a drug wholesaler or drug 9 manufacturer has a 5% or greater interest shall be considered 10 eligible to bid. The contract shall be executed within six 11 months from the effective date of this chapter. 12 Section 1104. Pharmacy benefits manager functions. 13 (a) Requirements.--The secretary shall require the PBM to: 14 (1) Manage and implement the drug formulary for each 15 public plan and at a later date make a recommendation to the 16 secretary as to whether a uniform formulary for all public 17 plans under this chapter should exist, along with a sample 18 uniform formulary. 19 (2) Ensure that any pharmacy licensed in this 20 Commonwealth is eligible to provide pharmacy services 21 according to any regulations in effect on the effective date 22 of this chapter and that regulate pharmacy providers. 23 (3) Negotiate drug rebates with manufacturers. 24 (4) In accordance with the act of November 24, 1976 25 (P.L.1163, No.259), referred to as the Generic Equivalent 26 Drug Law, make provisions for generic substitutions and 27 require pharmacists to disclose any affiliation with a 28 generic manufacturer. 29 (5) Provide for prospective drug utilization review 30 which precludes overriding alerts without intervention. 20000S1525B2123 - 11 -
1 (6) Provide for prior authorization in accordance with 2 regulations of the secretary. 3 (7) Provide for prospective and concurrent and 4 retrospective drug utilization review to ensure that 5 prescriptions are appropriate, medically necessary and not 6 likely to result in adverse medical results and to educate 7 providers and recipients of pharmacy services through public 8 plans and to correct and report misutilization and abuse by 9 licensed prescribers and recipients and provide for fraud and 10 abuse audits, coordinating its activities with the secretary 11 to support compliance with applicable laws and regulations. 12 (8) Educate providers on disease and care management. 13 (9) Provide educational materials for public plan 14 recipients of pharmacy services on disease and care 15 management. 16 (10) In accordance with the provisions of the Omnibus 17 Budget Reconciliation Act of 1990 (Public Law 101-508, 104 18 Stat. 1388), bill, recoup and relay to the secretary 19 manufacturers' drug rebates and excessive consumer price 20 inflation discounts and resolve disputes, as defined in the 21 Omnibus Budget Reconciliation Act of 1990. 22 (11) Adjudicate claims through a Statewide point-of-sale 23 electronic verification and claims processing system which 24 will allow for intervention upon receipt of a prospective 25 drug utilization review alert and will allow for an emergency 26 supply of prescribed medication in the event of equipment 27 failures. 28 (12) Create an audit and recoupment system for providers 29 and recipients, and third-party medical resources. 30 (13) Coordinate with all public plans the reimbursement 20000S1525B2123 - 12 -
1 to pharmacies on a fee-for-service basis. 2 (b) Conflict of interest.--In implementing the formulary, 3 the single PBM shall demonstrate how it will avoid a conflict of 4 interest with any pharmaceutical manufacturer, wholesaler or 5 drug store chain that holds a less-than-5% interest in the PBM 6 or in which the PBM has a less-than-5% interest and shall 7 indicate how it will prevent the sharing of nonpublic 8 information concerning other drug manufacturers' bids, 9 proposals, contracts, prices, rebates or discounts. 10 (c) Considerations.--In preparing and managing the 11 formulary, the PBM shall ensure that it will consider all 12 discounts, rebates or other concessions offered by 13 manufacturers, drug chains or wholesale drug companies. 14 Section 1105. Drug Utilization Review Committee. 15 (a) Formation.--The secretary shall require the PBM to form 16 a drug utilization review committee. 17 (b) Composition and number.--The committee shall be 18 comprised of 15 members, five of whom shall be actively 19 practicing physicians licensed in this Commonwealth, five of 20 whom shall be actively practicing pharmacists licensed in this 21 Commonwealth and five of whom shall be consumers who reside in 22 this Commonwealth. None of the members may hold a 5% or greater 23 interest in the PBM, its parent company or companies, or in a 24 company or companies owned by the PBM. The Governor, the 25 President pro tempore of the Senate, the Speaker of the House of 26 Representatives, the Minority Leader of the Senate and the 27 Minority Leader of the House of Representatives shall each 28 appoint one physician, pharmacist and consumer member. Of the 29 original members, each appointing authority shall designate one 30 member appointed by the authority to serve for an initial term 20000S1525B2123 - 13 -
1 of two years, one member to serve for an initial term of three 2 years and one member to serve for an initial term of four years. 3 Thereafter each appointment shall be for a term of four years. A 4 member shall serve until a successor is appointed. Vacancies 5 shall be filled in the same manner as the original appointments. 6 (c) Quality of care.-- 7 (1) The committee shall develop a system that provides 8 prospective, concurrent and retrospective review of drug 9 utilization to ensure that pharmacy services provided are or 10 were appropriate and medically necessary and not likely to 11 result in adverse medical results. The review program shall 12 be designed to educate licensed prescribers and pharmacists 13 as provided in paragraph (4) on the proper utilization of 14 drugs in disease and care management. In reviewing drug 15 utilization, the committee shall assess data on drug use 16 against predetermined standards consistent with the American 17 Hospital Formulary Service Drug Information, the United 18 States Pharmacopeia-Drug Information, American Medical 19 Association Drug Evaluations or peer-reviewed medical 20 literature. 21 (2) The committee shall develop a system to utilize the 22 compendia and literature referred to in paragraph (1) as its 23 source of standards to screen for potential drug problems 24 before a prescription is filled or delivered to a recipient. 25 Prospective drug use review shall include consultation with 26 recipients by pharmacists. 27 (3) The secretary and the PBM shall provide data to the 28 committee, through mechanized drug claims processing and 29 retrieval systems, for the ongoing periodic examination of 30 claims data and other records in order to identify patterns 20000S1525B2123 - 14 -
1 of fraud, abuse, gross overuse or inappropriate or medically 2 unnecessary care among licensed prescribers, pharmacists and 3 recipients or associated with specific drugs or groups of 4 drugs. The committee shall, on an ongoing basis, assess data 5 on drug use against explicit predetermined standards using 6 the compendia and literature referred to in this subsection 7 and to introduce, as necessary, remedial strategies to 8 improve the quality of care and to conserve program funds or 9 patient expenditures. 10 (4) The committee shall, using drug use data on common 11 therapy problems, develop active and ongoing educational 12 outreach programs to disseminate information to providers on 13 common drug therapy problems with the aim of improving 14 prescribing or dispensing practices. The educational programs 15 shall include interventions for providers targeting therapy 16 problems or individuals identified in the course of 17 retrospective drug reviews. The committee shall reevaluate 18 interventions from time to time to determine if the 19 interventions were successful in improving the quality of 20 drug therapy and shall make modifications as necessary. 21 Intervention programs shall include: 22 (i) Information dissemination sufficient to ensure 23 the ready availability to providers of information 24 concerning the committee's duties, powers and basis for 25 its standards. 26 (ii) Written, oral or electronic reminders 27 containing patient-specific and/or drug-specific 28 information and suggested changes in prescribing or 29 dispensing practices, communicated in a manner designed 30 to ensure the privacy of patient-related information. 20000S1525B2123 - 15 -
1 (iii) Use of face-to-face discussions between health 2 care professionals who are experts in rational drug 3 therapy and selected prescribers and pharmacists who have 4 been targeted for educational intervention, including 5 discussion of optimal prescribing, dispensing or pharmacy 6 care practices and follow-up face-to-face discussions. 7 (iv) Intensified review or monitoring of selected 8 prescribers or dispensers. 9 (d) Corrective actions.--Should licensed prescribers or 10 recipients continue to misutilize drugs or abuse the system, the 11 committee shall provide information to the secretary for 12 corrective action. In the case of prescribers, the committee 13 shall submit a report and recommendations to the secretary for 14 appropriate action. The secretary shall inform the PBM and the 15 appropriate Commonwealth licensing body of any final 16 administrative sanctions. 17 (e) Nonliability.--Any person rendering service as a member 18 of a utilization review committee for this program shall not be 19 liable for any civil damages as a result of any acts or 20 omissions in rendering the service as a member of any such 21 committee except any acts or omissions intentionally designed to 22 harm or any grossly negligent acts or omissions which result in 23 harm to the person receiving such service. 24 (f) Annual report.--The secretary shall require the 25 committee to provide an annual report describing the committee's 26 activities, including the nature and scope of the prospective, 27 concurrent and retrospective drug reviews, a summary of 28 interventions used, an assessment of the impact of these 29 educational interventions on quality of care and an estimate of 30 the cost savings generated as a result of the program. 20000S1525B2123 - 16 -
1 Section 1106. Reimbursement. 2 Each public plan shall reimburse pharmacies on a fee-for- 3 service basis, using formulas established by the plan. 4 Pharmacies reimbursed under this chapter shall be paid at fee- 5 for-service rates no less than the rates in effect on the 6 effective date of this chapter. 7 Section 1107. Rebate agreement. 8 (a) Required agreements.--A public plan shall not reimburse 9 participating pharmacies for any prescription drug unless the 10 department and the pharmaceutical manufacturer have entered into 11 a rebate agreement covering that prescription drug. 12 (b) Exceptions.--Subsection (a) shall not apply if the 13 availability of the drug is essential to the health of members 14 of the public plan as determined by the department. 15 (c) Contracts.--Pharmaceutical manufacturers must enter into 16 a rebate agreement with the department to obtain reimbursement 17 for prescription drugs included under this chapter. The rebate 18 agreement shall require the pharmaceutical manufacturer to 19 provide to the department a rebate each calendar quarter in an 20 amount to be determined. The PBM shall use its best efforts to 21 obtain the best price for prescription drugs under this rebate 22 plan. The rebate shall be paid by the manufacturer not later 23 than 30 days after the date of receipt of the information 24 necessary to calculate the amount of the rebate. 25 (d) Disposition of funds.--Moneys received under this 26 chapter in connection with public plans other than those 27 identified in section 709 and the medical assistance program 28 shall be deposited in the Pharmaceutical Assistance Contract for 29 the Elderly Fund for purposes of expanding eligibility in the 30 PACE program. 20000S1525B2123 - 17 -
1 Section 1108. Pharmacies and dispensing physicians. 2 (a) General rule.--Pharmacies and dispensing physicians 3 participating in the PACE program shall, as a condition of 4 participation in that program, agree to the conditions set forth 5 in this section. 6 (b) Medicare recipients.--Any pharmacy or dispensing 7 physician participating in the PACE program shall, as a 8 condition of participation in that program, agree to sell 9 prescription drugs to Medicare recipients at the PACE program 10 price. In no case shall a Medicare recipient be charged more 11 than the price of the drug at the particular pharmacy on the 12 date of the sale. 13 (c) Limitation on participation.--Any pharmacist, pharmacy 14 or dispensing physician that is precluded or excluded for cause 15 from the Medical Assistance Program shall be precluded or 16 excluded from participation under this chapter. 17 Section 1109. Medicare recipients. 18 (a) General rule.--Medicare recipients shall be eligible to 19 purchase prescription drugs at the PACE price established 20 pursuant to Chapter 5. 21 (b) Procedure.--In order to receive the PACE price under 22 subsection (a), a Medicare recipient shall present the 23 recipient's Medicare card to the participating provider at the 24 time of purchase of the recipient's prescription drugs. 25 (c) Information to be made available.--A pharmacist, 26 pharmacy or dispensing physician shall inform the Medicare 27 recipient whether using the Medicare card will result in the 28 Medicare recipient receiving the prescription drug at the lowest 29 price available to the Medicare recipient. 30 Section 1110. Expansion of PACE program. 20000S1525B2123 - 18 -
1 Within 18 months of the effective date of this chapter, the 2 pharmacy benefits manager, in conjunction with the Drug 3 Utilization Review Committee established under section 1105, 4 shall provide to the secretary recommendations concerning the 5 expansion of the PACE program. The recommendations shall also be 6 submitted to the President pro tempore of the Senate and the 7 Speaker of the House of Representatives. 8 Section 1111. Administration of contract. 9 The secretary shall administer the contract with the PBM and 10 shall promulgate rules and regulations, as necessary, to carry 11 out the provisions of this chapter. 12 Section 1112. Applicability. 13 This chapter shall apply to the provision of all pharmacy 14 services under any prescription program established by the 15 Commonwealth or in which a contribution by the Commonwealth is 16 required by any managed health care plan, pharmaceutical 17 manufacturer, licensed pharmacy, chain of pharmacies or 18 wholesaler. This shall include the Medical Assistance Program 19 unless the secretary, in consultation with the Department of 20 Public Welfare, determines that such inclusion is a violation of 21 Federal law or any existing contractual agreement. 22 Section 1113. Prohibited activities. 23 It shall be unlawful for any individual, partnership or 24 corporation to solicit, receive, offer or pay any kickback, 25 bribe or rebate in cash or in kind from or to any person in 26 connection with the furnishing of services under this chapter. 27 Section 6. Section 2102 of the act, added November 21, 1996 28 (P.L.741, No.134), is amended to read: 29 Section 2102. Annual report to General Assembly. 30 (a) Submission of report.--The department shall submit a 20000S1525B2123 - 19 -
1 report no later than April 1 of each year to the chairman and 2 minority chairman of the Aging and Youth Committee of the 3 Senate, the chairman and minority chairman of the Aging and 4 Youth Committee of the House of Representatives and the 5 Pharmaceutical Assistance Review Board. 6 (b) Collection of data.--The department shall maintain 7 monthly statistical records on PACE [and PACENET], including the 8 level of participation and any patterns of unusual drug usage 9 for purposes of formulating the annual report. 10 (c) Information for inclusion in annual report.--The annual 11 report shall contain, but not be limited to, all information 12 relating to: 13 (1) The number of persons served by PACE [and PACENET] 14 and their counties of residence. 15 (2) A breakdown of the numbers and kinds of 16 pharmaceuticals used. 17 (3) The cost of prescriptions. 18 (4) An estimate of actual expenses incurred by 19 pharmacists participating in the program. 20 (5) The results obtained by the drug education program 21 under section 522. 22 (6) Information regarding the operation of the 23 therapeutic drug utilization review system for the prior 24 calendar year, which shall include, at a minimum: 25 (i) The scope of physician and pharmacist 26 participation in the system. 27 (ii) A description of claimant response to the 28 system. 29 (iii) Data for each month of the covered period 30 regarding the number of prescription revisions based on 20000S1525B2123 - 20 -
1 utilization review, including drug information, cost 2 savings and the policy used by the department to make 3 utilization review decisions. 4 (7) Information on the existence and scope of fraudulent 5 activity and violations of this act by providers 6 participating in PACE [and PACENET]. 7 (8) Information regarding the financial status of PACE 8 [and PACENET], including, but not limited to, the adequacy of 9 any applicable deductible and copayment levels, based upon 10 the financial experience and projections of PACE [and 11 PACENET]. 12 Section 7. This act shall take effect in 60 days. I21L72SFL/20000S1525B2123 - 21 -