SENATE AMENDED
PRIOR PRINTER'S NOS. 1044, 1816, 1836, PRINTER'S NO. 2794
1889, 2098, 2117
No. 888 Session of 2003
INTRODUCED BY VANCE, EACHUS, KENNEY, WALKO, E. Z. TAYLOR,
GRUCELA, ADOLPH, BARD, BALDWIN, BARRAR, BASTIAN, BROWNE,
BUTKOVITZ, BUXTON, CAPPELLI, CASORIO, CORNELL, CORRIGAN,
COSTA, DAILEY, DALLY, J. EVANS, FEESE, FLICK, FREEMAN, GABIG,
GERGELY, GILLESPIE, GINGRICH, HARHAI, HARPER, HASAY,
HENNESSEY, HERMAN, HERSHEY, HORSEY, JAMES, KELLER, KIRKLAND,
LAUGHLIN, LEH, LEWIS, MACKERETH, MAHER, MARSICO, McCALL,
McGILL, McNAUGHTON, MELIO, MICOZZIE, R. MILLER, S. MILLER,
MUNDY, NAILOR, NICKOL, O'NEILL, PALLONE, PETRARCA, PETRI,
PICKETT, PISTELLA, RAYMOND, READSHAW, ROSS, RUBLEY, SAINATO,
SAYLOR, SCAVELLO, SCHRODER, SEMMEL, SHANER, SOLOBAY, STEIL,
R. STEVENSON, T. STEVENSON, J. TAYLOR, THOMAS, TIGUE,
TRAVAGLIO, TURZAI, WANSACZ, WATSON, WEBER, WILT, WRIGHT,
YOUNGBLOOD, YUDICHAK, ZUG, FABRIZIO, REED, SAMUELSON, OLIVER,
COY, TANGRETTI, HABAY, GEORGE AND GORDNER, MARCH 13, 2003
SENATOR ORIE, AGING AND YOUTH, IN SENATE, AS AMENDED,
OCTOBER 15, 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 further providing for definitions, for request for proposal,
8 for program generally, for generic drugs, for restricted
9 formulary, for reimbursement, for nonliability, for the
10 Pharmaceutical Assistance Contract for the Elderly Needs
11 Enhancement Tier, for the Pharmaceutical Assistance Review
12 Board, for penalties and for the Prescription Drug Education
13 Program; providing for the Pharmacy Best Practices and Cost
14 Control Program; further providing for declaration of policy,
15 for rebate agreement, for terms of rebate agreement and for
16 amount of rebate; providing for a Pharmaceutical Assistance
17 Clearinghouse; further providing for annual report to General
18 Assembly; and providing for construction with Federal
1 programs. PROGRAMS AND FOR A PHARMACY BENEFITS ADMINISTRATOR <--
2 STUDY.
3 The General Assembly of the Commonwealth of Pennsylvania
4 hereby enacts as follows:
5 Section 1. The definitions of "HCFA," and "INCOME," "maximum <--
6 annual income" AND "PROVIDER" in section 502 of the act of <--
7 August 26, 1971 (P.L.351, No.91), known as the State Lottery
8 Law, added November 21, 1996 (P.L.741, No.134), are amended and
9 the section is amended by adding a definition to read:
10 Section 502. Definitions.
11 The following words and phrases when used in this chapter
12 shall have the meanings given to them in this section unless the
13 context clearly indicates otherwise:
14 * * *
15 "CMS." The Centers for Medicare and Medicaid Services of the
16 United States.
17 * * *
18 ["HCFA." The Health Care Financing Administration of the
19 United States.]
20 "Income." All income from whatever source derived,
21 including, but not limited to, salaries, wages, bonuses,
22 commissions, income from self-employment, alimony, support
23 money, cash public assistance and relief, the gross amount of
24 any pensions or annuities, including railroad retirement
25 benefits, all benefits received under the Social Security Act
26 (49 Stat. 620, 42 U.S.C. § 301 et. seq.) (except Medicare
27 benefits), all benefits received under State unemployment
28 insurance laws and veterans' disability payments, all interest
29 received from the Federal Government or any state government or
30 any instrumentality or political subdivision thereof, realized
20030H0888B2794 - 2 -
1 capital gains, rentals, workmen's compensation and the gross
2 amount of loss of time insurance benefits, life insurance
3 benefits and proceeds, except the first [$5,000] $10,000 of the
4 total of death benefits payments, and gifts of cash or property,
5 other than transfers by gift between members of a household, in
6 excess of a total value of $300, but shall not include surplus
7 food or other relief in kind supplied by a government agency or
8 property tax rebate.
9 "Maximum annual income." For PACE eligibility, the term
10 shall mean annual income which shall not exceed [$14,000]
11 $14,500 in the case of single persons nor [$17,200] $17,700 in
12 the case of the combined annual income of persons married to
13 each other. Persons may, in reporting income to the Department
14 of Aging, round the amount of each source of income and the
15 income total to the nearest whole dollar, whereby any amount
16 which is less than 50¢ is eliminated.
17 * * *
18 "PROVIDER." A PHARMACY [OR], DISPENSING PHYSICIAN OR <--
19 CERTIFIED REGISTERED NURSE PRACTITIONER ENROLLED AS A PROVIDER
20 IN THE PROGRAM.
21 Section 2. Sections 503, 504, 508(a), 509, 510(a) and (b), <--
22 512, 515, 516, 519 and 520(b), 520(B), 521(D) AND 522 of the <--
23 act, added November 21, 1996 (P.L.741, No.134), are amended to
24 read:
25 SECTION 503. DETERMINATION OF ELIGIBILITY. <--
26 THE DEPARTMENT SHALL ADOPT REGULATIONS RELATING TO THE
27 DETERMINATION OF ELIGIBILITY OF PROSPECTIVE CLAIMANTS AND
28 PROVIDERS, INCLUDING DISPENSING PHYSICIANS AND CERTIFIED
29 REGISTERED NURSE PRACTITIONERS WHEN ACTING IN ACCORDANCE WITH
30 RULES AND REGULATIONS PROMULGATED BY THE STATE BOARD OF NURSING
20030H0888B2794 - 3 -
1 AS REQUIRED BY THE ACT OF MAY 22, 1951 (P.L.317, NO.69), KNOWN
2 AS THE PROFESSIONAL NURSING LAW, AND THE STATE BOARD OF PHARMACY
3 MINIMUM STANDARDS OF PRACTICE, AND THE DETERMINATION AND
4 ELIMINATION OF PROGRAM ABUSE. TO THIS END, THE DEPARTMENT SHALL
5 ESTABLISH A COMPLIANCE UNIT STAFFED SUFFICIENTLY TO FULFILL THIS
6 RESPONSIBILITY. THE DEPARTMENT SHALL HAVE THE POWER TO DECLARE
7 INELIGIBLE ANY CLAIMANT OR PROVIDER WHO ABUSES OR MISUSES THE
8 ESTABLISHED PRESCRIPTION PLAN. THE DEPARTMENT SHALL HAVE THE
9 POWER TO INVESTIGATE CASES OF SUSPECTED PROVIDER OR RECIPIENT
10 FRAUD.
11 SECTION 504. PHYSICIAN, CERTIFIED REGISTERED NURSE PRACTITIONER
12 AND PHARMACY PARTICIPATION.
13 ANY PHYSICIAN, CERTIFIED REGISTERED NURSE PRACTITIONER,
14 PHARMACIST, PHARMACY OR CORPORATION OWNED IN WHOLE OR IN PART BY
15 A PHYSICIAN, CERTIFIED REGISTERED NURSE PRACTITIONER OR
16 PHARMACIST ENROLLED AS A PROVIDER IN THE PROGRAM OR WHO HAS
17 PRESCRIBED MEDICATION FOR A CLAIMANT IN THE PROGRAM WHO IS
18 PRECLUDED OR EXCLUDED FOR CAUSE FROM THE DEPARTMENT OF PUBLIC
19 WELFARE'S MEDICAL ASSISTANCE PROGRAM SHALL BE PRECLUDED OR
20 EXCLUDED FROM PARTICIPATION IN THE PROGRAM. NO PHYSICIAN OR
21 CERTIFIED REGISTERED NURSE PRACTITIONER PRECLUDED OR EXCLUDED
22 FROM THE DEPARTMENT OF PUBLIC WELFARE'S MEDICAL ASSISTANCE
23 PROGRAM SHALL HAVE CLAIMS RESULTING FROM PRESCRIPTIONS PAID FOR
24 BY THE PROGRAM.
25 Section 508. Request for proposal.
26 (a) General rule.--The department shall prepare a request
27 for proposal for the purpose of providing pharmaceutical
28 assistance for the elderly within this Commonwealth beginning at
29 the expiration, including any option years the department
30 chooses to exercise, of the current vendor contract. Upon the
20030H0888B2794 - 4 -
1 adoption of the General Fund budget, the Department of Revenue
2 shall be authorized to transmit the appropriated funds in the
3 State Lottery Fund to the State Treasurer to be deposited in the
4 Pharmaceutical Assistance Contract for the Elderly Fund. This
5 fund shall consist of appropriations and interest and shall be
6 created by the State Treasurer to fund the operations of the
7 program by the department and the private contractor. Funds not
8 expended in the fiscal year in which they were appropriated
9 shall not lapse and be available for use in the next fiscal
10 year.
11 * * *
12 Section 509. Program generally.
13 The program shall include the following:
14 (1) Participating pharmacies shall be paid within 21
15 days of the contracting firm receiving the appropriate
16 substantiation of the transaction. Pharmacies shall be
17 entitled to interest for payment not made within the 21-day
18 period at a rate approved by the board.
19 (2) Collection of the copayment by pharmacies shall be
20 mandatory.
21 (3) Senior citizens participating in the program are not
22 required to maintain records of each transaction.
23 (4) A system of rebates or reimbursements to eligible
24 claimants for pharmaceutical expenses shall be prohibited.
25 (5) PACE shall include [a] participant copayment
26 [schedule] schedules for each prescription, including a
27 copayment for generic or multiple-source drugs that is less
28 than the copayment for single-source drugs. The copayment
29 [may increase or decrease] shall be increased or decreased on <--
30 an annual basis by the average percent change of ingredient
20030H0888B2794 - 5 -
1 costs for all prescription drugs, plus a differential to
2 raise the copayment to the next highest 25¢ increment. In
3 addition, the department may approve a request for increase
4 or decrease in the level of copayment based upon the
5 financial experience and projections of PACE and after
6 consultation with the board. The department is prohibited
7 from approving adjustments to the copayment on more than an
8 annual basis.
9 (6) [The program shall consist of payments to pharmacies <--
10 on behalf of eligible claimants for 90% of the average
11 wholesale costs of prescription drugs which exceed the
12 copayment, plus a dispensing fee of at least [$3.50] $4 or <--
13 the dispensing fee established by the department by
14 regulation, whichever is greater.] THE PROGRAM PAYMENT SHALL <--
15 BE THE LOWER OF THE FOLLOWING AMOUNTS DETERMINED AS FOLLOWS:
16 (I) 90% OF THE AVERAGE WHOLESALE COST OF THE
17 PRESCRIPTION DRUG DISPENSED:
18 (A) WITH THE ADDITION OF A DISPENSING FEE OF THE
19 GREATER OF:
20 (I) $4; OR
21 (II) THE AMOUNT SET BY THE DEPARTMENT BY
22 REGULATION;
23 (B) THE SUBTRACTION OF THE COPAYMENT; AND
24 (C) IF REQUIRED THE SUBTRACTION OF THE GENERIC
25 DIFFERENTIAL; OR
26 (II) THE PHARMACY'S USUAL CHARGE FOR THE DRUG
27 DISPENSED WITH THE SUBTRACTION OF THE COPAYMENT AND IF
28 REQUIRED THE SUBTRACTION OF THE GENERIC DIFFERENTIAL; OR
29 (III) IF A GENERIC DRUG, THE MOST CURRENT FEDERAL
30 UPPER PAYMENTS LIMITS ESTABLISHED IN THE MEDICAID PROGRAM
20030H0888B2794 - 6 -
1 UNDER 42 CFR § 447.332 (RELATING TO UPPER LIMITS FOR
2 MULTIPLE SOURCE DRUGS), PLUS A DISPENSING FEE OF $4 OR
3 THE AMOUNT SET BY THE DEPARTMENT BY REGULATION, WHICHEVER
4 IS GREATER.
5 (7) In no case shall the Commonwealth or any person
6 enrolled in the program be charged more than the price of the
7 drug at the particular pharmacy on the date of the sale.
8 (8) The Governor may, based upon certified State Lottery
9 Fund revenue that is provided to both the chairman and
10 minority chairman of the Appropriations Committee of the
11 Senate and the chairman and minority chairman of the
12 Appropriations Committee of the House of Representatives, and
13 after consultation with the board, increase the eligibility
14 limits above those established in this chapter.
15 Section 510. Generic drugs.
16 (a) In general.--Notwithstanding any other statute or
17 regulation, if an A-rated generic therapeutically equivalent
18 drug is available for dispensing to a claimant, the provider
19 shall dispense the A-rated generic therapeutically equivalent
20 drug to the claimant. THE DEPARTMENT SHALL, UNDER SECTION <--
21 1927(C)(1)(C) OF THE SOCIAL SECURITY ACT (49 STAT. 620 42 U.S.C.
22 § 1396R-8(C)(1)(C)), REIMBURSE PROVIDERS BASED UPON THE MOST
23 CURRENT LISTING OF FEDERAL UPPER PAYMENTS LIMITS ESTABLISHED IN
24 THE MEDICAID PROGRAM UNDER 42 CFR § 447.332 (RELATING TO UPPER
25 LIMITS FOR MULTIPLE SOURCE DRUGS), PLUS A DISPENSING FEE. THE
26 DEPARTMENT SHALL UPDATE THE AVERAGE WHOLESALE COSTS AND THE
27 FEDERAL UPPER PAYMENTS LIMITS ON A REGULAR BASIS, AT LEAST EVERY
28 30 DAYS. The department shall not reimburse providers for brand
29 name products except in the following circumstances:
30 (1) There is no A-rated generic therapeutically
20030H0888B2794 - 7 -
1 equivalent drug available on the market. This paragraph does
2 not apply to the lack of availability of an A-rated generic
3 therapeutically equivalent drug in the providing pharmacy
4 unless it can be shown to the department that the provider
5 made reasonable attempts to obtain the A-rated generic
6 therapeutically equivalent drug or that there was an
7 unforeseeable demand and depletion of the supply of the A-
8 rated generic therapeutically equivalent drug. In either
9 case, the department shall reimburse the provider [for 90% of <--
10 the average wholesale cost plus a dispensing fee based on the
11 least expensive A-rated generic therapeutically equivalent
12 drug for the brand drug dispensed.] based upon the most <--
13 current listing of Federal upper payment limits established
14 under the Medicaid program as provided under Federal
15 regulations at 42 CFR 447.332 (relating to upper limits for
16 multiple source drugs), in accordance with section
17 1902(a)(30)(A) of the Social Security Act (49 Stat. 620, 42
18 U.S.C. § 1396a(a)(30)(A)), plus a dispensing fee. The
19 department shall review the Federal upper payment limits
20 every 12 months.
21 (2) An A-rated generic therapeutically equivalent drug
22 is deemed by the department, in consultation with a
23 utilization review committee, to have too narrow a
24 therapeutic index for safe and effective dispensing in the
25 community setting. The department shall notify providing
26 pharmacies of A-rated generic therapeutically equivalent
27 drugs that are identified pursuant to this paragraph on a
28 regular basis.
29 (3) The Department of Health has determined that a drug
30 shall not be recognized as an A-rated generic therapeutically
20030H0888B2794 - 8 -
1 equivalent drug for purpose of substitution under section
2 5(b) of the act of November 24, 1976 (P.L.1163, No.259),
3 referred to as the Generic Equivalent Drug Law.
4 (4) At the time of dispensing, the provider has a
5 prescription on which the brand name drug dispensed is billed
6 to the program by the provider at a usual and customary
7 charge which is equal to or less than the least expensive
8 usual and customary charge of any A-rated generic
9 therapeutically equivalent drug reasonably available on the
10 market to the provider.
11 (b) Generic not accepted.--[If] Except as provided in
12 Chapter 6 if a claimant chooses not to accept the A-rated
13 generic therapeutically equivalent drug required by subsection
14 (a), the claimant shall be liable for the copayment and 70% of
15 the average wholesale cost of the brand name drug.
16 * * *
17 Section 512. Restricted formulary.
18 The department may establish a restricted formulary of the
19 drugs which will not be reimbursed by the program. This
20 formulary shall include only experimental drugs and drugs on the
21 Drug Efficacy Study Implementation List prepared by [the Health
22 Care Finance Administration] CMS. A medical exception may be
23 permitted by the department for reimbursement of a drug on the
24 Drug Efficacy Study Implementation List upon declaration of its
25 necessity on the prescription by the treating physician OR <--
26 CERTIFIED REGISTERED NURSE PRACTITIONER, except that, for DESI
27 drugs for which the FDA has issued a Notice for Opportunity
28 Hearing (NOOH) for the purpose of withdrawing the New Drug
29 Application approved for that drug, reimbursement coverage shall
30 be discontinued under the provisions of this chapter.
20030H0888B2794 - 9 -
1 Section 515. Reimbursement.
2 For-profit third-party insurers, health maintenance
3 organizations, PREFERRED PROVIDER ORGANIZATIONS and not-for- <--
4 profit prescription plans shall be responsible for any payments
5 made to a providing pharmacy on behalf of a claimant covered by
6 such a third party.
7 Section 516. Nonliability.
8 (a) [Persons rendering service] General rule.--Any person
9 rendering service as a member of a utilization review committee
10 for this program shall not be liable for any civil damages as a
11 result of any acts or omissions in rendering the service as a
12 member of any such committee except any acts or omissions
13 intentionally designed to harm or any grossly negligent acts or
14 omissions which result in harm to the person receiving such
15 service.
16 (b) [Officer and employees of department] Department
17 personnel.--Any officer or employee of the department rendering
18 service as a member of a utilization review committee for this
19 program shall not be liable for any civil damages as a result of
20 any acts or omissions in rendering the service as a member of
21 any such committee or as a result of any decision or action in
22 connection with the program except any acts or omissions
23 intentionally designed to harm or any grossly negligent acts or
24 omissions which result in harm to the person receiving such
25 service.
26 Section 519. The Pharmaceutical Assistance Contract for the
27 Elderly Needs Enhancement Tier.
28 (a) Establishment.--There is hereby established within the
29 department a program to be known as the Pharmaceutical
30 Assistance Contract for the Elderly Needs Enhancement Tier
20030H0888B2794 - 10 -
1 (PACENET).
2 (b) PACENET eligibility.--A claimant with an annual income
3 of not less than [$14,000] $14,500 and not more than [$16,000]
4 $22,500 in the case of a single person and of not less than
5 [$17,200] $17,700 and not more than [$19,200] $30,500 in the
6 case of the combined income of persons married to each other
7 shall be eligible for enhanced pharmaceutical assistance under
8 this section. A person may, in reporting income to the
9 department, round the amount of each source of income and the
10 income total to the nearest whole dollar, whereby any amount
11 which is less than 50¢ is eliminated.
12 (c) Deductible.--Upon enrollment in PACENET, eligible
13 claimants in the income ranges set forth in subsection (b) shall
14 be required to meet [an annual] a deductible in unreimbursed
15 prescription drug expenses of [$500] $40 per person[.] per
16 month. The $40 monthly deductible shall be cumulative and shall
17 be applied to subsequent months to determine eligibility. The
18 cumulative deductible shall be determined on a calendar AN <--
19 ENROLLMENT year basis for an annual total deductible not to
20 exceed $480 in a year. To qualify for the deductible set forth
21 in this subsection the prescription drug must be purchased for
22 the use of the eligible claimant from a provider as defined in
23 this chapter. The department, after consultation with the board,
24 [may] shall approve an adjustment in the deductible on an annual <--
25 basis.
26 (d) Copayment.--For eligible claimants under this section,
27 the copayment schedule, which [may] shall be adjusted by the <--
28 department on an annual basis after consultation with the board,
29 shall be:
30 (i) eight dollars for noninnovator multiple source
20030H0888B2794 - 11 -
1 drugs as defined in section 702; or
2 (ii) fifteen dollars for single-source drugs and
3 innovator multiple-source drugs as defined in section
4 702.
5 Section 520. Board.
6 * * *
7 (b) Composition.--The board shall be comprised of the
8 following eight persons:
9 (1) The Secretary of Aging, who shall serve as its
10 chairman.
11 (2) The Secretary of Revenue.
12 (3) The Secretary of Health.
13 (4) Five public members, one appointed by the President
14 pro tempore of the Senate, one appointed by the Minority
15 Leader of the Senate, one appointed by the Speaker of the
16 House of Representatives, one appointed by the Minority
17 Leader of the House of Representatives and one appointed by
18 the Governor. Those appointed by the legislative officers
19 shall include two senior citizens who have not been a part of
20 the pharmaceutical industry to serve as consumer advocates
21 [and two representatives], one representative of the
22 pharmaceutical industry[, at least one of whom is a] and one
23 practicing Pennsylvania pharmacist. The individual appointed
24 by the Governor must be a physician. A public member who
25 misses two consecutive meetings without good cause acceptable
26 to the chairman shall be replaced by the appointing
27 authority.
28 * * *
29 Section 3. The act is amended by adding a section to read: <--
30 Section 520.1. PACE and PACENET Eligibility Advisory Committee.
20030H0888B2794 - 12 -
1 (a) Establishment.--There is established in the department
2 the PACE and PACENET Eligibility Advisory Committee.
3 (b) Composition.--The eligibility advisory committee shall
4 consist of four members who shall be members of the General
5 Assembly and a chairman who shall be appointed by the Governor.
6 The members of the General Assembly shall be appointed as
7 follows:
8 (1) One member appointed by the President pro tempore of
9 the Senate.
10 (2) One member appointed by the Minority Leader of the
11 Senate.
12 (3) One member appointed by the Speaker of the House of
13 Representatives.
14 (4) One member appointed by the Minority Leader of the
15 House of Representatives.
16 (c) Chairman.--Nothing in this section shall be construed as
17 prohibiting the Governor from appointing a member of the General
18 Assembly as chairman .
19 (d) Term.--Members shall serve at the pleasure of the
20 appointing authority.
21 (e) Expenses.--Members of the advisory committee shall serve
22 without compensation but shall be reimbursed for actual and
23 reasonable expenses incurred in the performance of their
24 official duties.
25 (f) Designee.--A designee designated by a member under
26 subsection (b)(1), (2), (3) and (4) may vote and otherwise act
27 on behalf of the member. The designation must be in writing and
28 be delivered to the advisory committee. The designation shall
29 continue in effect until revoked or amended in writing.
30 (g) Quorum.--A majority of the members of the advisory
20030H0888B2794 - 13 -
1 committee then serving shall constitute a quorum of the advisory
2 committee. Only a member or a designee who is physically present
3 at a meeting or able to participate fully in the deliberations
4 by appropriate telecommunications means shall count toward a
5 quorum of the advisory committee.
6 (h) Responsibilities.--The advisory committee shall study
7 the feasibility of expansions and other changes to eligibility
8 under the PACE program and make recommendations to the Governor
9 and the department on an annual basis. In addition, the advisory
10 committee may study and participate, with the approval of the
11 Governor and the department, in advocating at other levels of
12 government proposed changes in the provision of pharmaceutical
13 benefits to senior citizens. The committee may also make
14 recommendations with respect to the terms and conditions under
15 which pharmaceutical companies participate in Commonwealth
16 health care programs for the elderly.
17 Section 4. Sections 521(d) and 522 of the act, added
18 November 21, 1996 (P.L.741, No.134), are amended to read:
19 Section 521. Penalties.
20 * * *
21 (d) [Repayment of gain] Reparation.--Any provider, recipient
22 or other person who is found guilty of a crime for violating
23 this chapter shall repay three times the value of the material
24 gain received. In addition to the civil penalty authorized
25 pursuant to subsection (b), the department may require the
26 provider, recipient or other person to repay up to three times
27 the value of any material gain to PACE or PACENET.
28 Section 522. Prescription drug education program.
29 The department, in cooperation with the Department of Health,
30 shall develop and implement a Statewide prescription drug
20030H0888B2794 - 14 -
1 education program designed to inform older adults of the dangers
2 of prescription drug abuse and misuse. The prescription drug
3 education program shall include, but not be limited to,
4 information concerning the following:
5 (1) The hazards of prescription drug overdose.
6 (2) The potential dangers of mixing prescription drugs.
7 (3) The danger of retaining unused prescription drugs
8 after the need to take them no longer exists.
9 (4) The necessity to carefully question physicians, <--
10 CERTIFIED REGISTERED NURSE PRACTITIONERS and pharmacists
11 concerning the effects of taking prescription drugs[, <--
12 including the differences between brand-name drugs and
13 generically equivalent drugs]. <--
14 (5) The advisability of maintaining a prescription drug
15 profile or other record of prescription drug dosage and
16 frequency of dosage.
17 (6) The desirability of advising family members of the
18 types and proper dosage of prescription drugs which are being
19 taken.
20 (7) The dangers of taking prescription drugs in excess
21 of prescribed dosages.
22 (8) The need to obtain complete, detailed directions
23 from the physician, CERTIFIED REGISTERED NURSE PRACTITIONER <--
24 or pharmacist concerning the time period a prescription drug
25 should be taken.
26 Section 5 3. The act is amended by adding a chapter to read: <--
27 CHAPTER 6
28 PHARMACY BEST PRACTICES AND COST CONTROL PROGRAM
29 Section 601. Definitions.
30 The following words and phrases when used in this chapter
20030H0888B2794 - 15 -
1 shall have the meanings given to them in this section unless the
2 context clearly indicates otherwise:
3 "Committee." The Pharmacy Best Practices and Cost Control
4 Advisory Committee established in section 602.
5 "Department." The Department of Aging of the Commonwealth.
6 "Program." The Pharmacy Best Practices and Cost Control
7 Program established in section 603.
8 "Secretary." The Secretary of Aging of the Commonwealth.
9 Section 602. Advisory committee.
10 (a) Establishment.--The Pharmacy Best Practices and Cost
11 Control Advisory Committee is established in the department.
12 (b) Members.--The committee is comprised of the following
13 Pennsylvania residents:
14 (1) The secretary or a designee, who shall serve as
15 chairperson.
16 (2) Four members appointed by the Governor. One member
17 under this paragraph must possess expertise in medicine, one
18 member must possess expertise in health care, one member must
19 possess expertise in pharmacy and one member must possess
20 expertise in the pharmaceutical industry.
21 (3) One member appointed by the President pro tempore of
22 the Senate and one member appointed by the Minority Leader of
23 the Senate.
24 (4) One member appointed by the Speaker of the House of
25 Representatives and one member appointed by the Minority
26 Leader of the House of Representatives.
27 (c) Terms.--Terms are as follows:
28 (1) The secretary shall serve ex officio.
29 (2) A member under subsection (b)(2) shall serve a term
30 of six years.
20030H0888B2794 - 16 -
1 (3) A member under subsection (b)(3) shall serve a term
2 of four years but may be removed at the pleasure of the
3 appointing authority.
4 (4) A member under subsection (b)(4) shall serve a term
5 of two years but may be removed at the pleasure of the
6 appointing authority.
7 (5) An appointment to fill a vacancy shall be for the
8 period of the unexpired term or until a successor is
9 appointed and qualified.
10 (d) Quorum.--A majority of the members of the committee
11 constitutes a quorum.
12 (e) Compensation.--Members shall receive no payment for
13 their services. Members who are not employees of State
14 government shall be reimbursed for necessary and reasonable
15 expenses incurred in the course of their official duties.
16 (f) Meetings.--Meetings of this committee shall be held in
17 public pursuant to 65 Pa.S.C. Ch. 7 (relating to public
18 meetings).
19 Section 603. Program.
20 (a) Establishment.--The secretary shall establish a Pharmacy
21 Best Practices and Cost Control Program for PACE and PACENET
22 enrollees designed to reduce the cost of providing prescription
23 drugs, while maintaining high quality in prescription drug
24 therapies. The program shall include all of the following:
25 (1) A list of covered prescription drugs under section
26 509 in the program selected by the department upon
27 recommendations by the committee.
28 (2) A drug utilization review procedure, including a
29 prescription review process for copayment schedules.
30 (3) Education programs designed to provide information
20030H0888B2794 - 17 -
1 and education on the therapeutic and cost-effective
2 utilization of prescription drugs to physicians, pharmacists
3 and other health care professionals authorized to prescribe
4 and dispense prescription drugs.
5 (b) Pooling.--The secretary shall evaluate the benefits of
6 participating, but is not required to participate, in joint
7 prescription drug purchasing agreements or pooling arrangements
8 with other states. Such actions shall include:
9 (1) The execution of any lawful joint purchasing or
10 pooling agreements with other participating states which the
11 secretary determines will lower the Medicaid cost of
12 prescription drugs while maintaining high quality in
13 prescription drug therapies.
14 (2) Renegotiation and amendment of existing contracts to
15 which the department is a party if renegotiation and
16 amendment will be of economic benefit to the department.
17 (3) A quarterly report to the committee on the
18 department's progress in securing participation in joint
19 purchasing or pooling agreements.
20 (c) Authorized coverage.--The program shall authorize
21 copayments schedules for each prescription drug. IN ESTABLISHING <--
22 THE SCHEDULES, THE DEPARTMENT SHALL TAKE INTO ACCOUNT THE
23 STANDARDS PUBLISHED IN THE UNITED STATES PHARMACOPEIA-DRUG
24 INFORMATION. THE DEPARTMENT SHALL NOTIFY CLAIMANTS UNDER THE
25 PLAN BY MAIL OF THE BASES FOR THE EXCLUSION OF COVERAGE OF ANY
26 DRUG. When a patient's health care provider prescribes a
27 prescription drug at the higher copayment schedule, the lower
28 copayment shall apply for one year when any of the following
29 conditions are met:
30 (1) The preferred choice has not been effective or, with
20030H0888B2794 - 18 -
1 reasonable certainty, is not expected to be effective in
2 treating the patient's condition.
3 (2) The preferred choice causes or is reasonably
4 expected to cause adverse or harmful reactions in the
5 patient.
6 (3) Other clinical criteria recommended by the committee
7 and approved by the department.
8 (d) Brand necessary.--If the prescriber does not wish
9 substitution to take place, the prescriber shall write "brand
10 necessary" or "no substitution" in the prescriber's own
11 handwriting on the prescription blank, together with a written
12 statement that the generic or the equivalent has not been
13 effective, or with reasonable certainty is not expected to be
14 effective, in treating the patient's medical condition or causes
15 or is reasonably expected to cause adverse or harmful reactions
16 in the patient. In the case of an unwritten prescription, there
17 shall be no substitution if the prescriber expressly indicates
18 to the pharmacist that the brand name drug is necessary and
19 substitution is not allowed because the generic or the
20 equivalent has not been effective, or with reasonable certainty
21 is not expected to be effective, in treating the patient's
22 medical condition or causes or is reasonably expected to cause
23 adverse or harmful reactions in the patient. Approval under this
24 section shall be valid for one year.
25 (e) Exclusions.--The department, with recommendations from
26 the committee, shall determine diseases and therapeutic classes
27 relating to treatment for diseases excluded from the program at
28 the time the program under this section is implemented.
29 (f) Response.--The program's prescriber-indicated prior
30 authorization process shall ensure that there will be a response
20030H0888B2794 - 19 -
1 to a request for prior authorization by telephone or other
2 telecommunication device within 12 hours after receipt of the
3 request for prior authorization and that a minimum of a 72-hour
4 supply of the drug prescribed will be provided in an emergency
5 or when the program does not provide a response within 12 hours.
6 The prior authorization process shall be designed to minimize
7 administrative burdens on prescribers, pharmacists and
8 consumers.
9 (g) Procedure.--The program shall establish procedures for
10 the timely review of prescription drugs newly approved by the
11 Food and Drug Administration, including procedures for the
12 review of newly approved prescription drugs in emergency
13 circumstances.
14 (h) Reports.--The department shall submit annual reports on
15 the program under subsection (a) to the Aging and Youth
16 Committee, the Appropriations Committee and the Public Health
17 and Welfare Committee of the Senate and the Aging and Older
18 Adult Services Committee, the Appropriations Committee and the
19 Health and Human Services Committee of the House of
20 Representatives. The reports shall include classes of drugs,
21 exceptions, cost effectiveness, movement of market share and
22 increased utilization of generic drugs.
23 Section 604. Restriction or substitution process.
24 (a) General rule.--The EXCEPT AS PROVIDED IN SECTION 510, <--
25 THE provisions of this chapter shall not permit the program to
26 develop any drug formulary, prior or retroactive approval
27 system, including higher copayments, or any other similar
28 restriction or substitution process for:
29 (1) Psychotropic drugs.
30 (2) Drugs used in the treatment of human
20030H0888B2794 - 20 -
1 immunodeficiency virus, acquired immune deficiency syndrome
2 or opportunistic infections.
3 (3) ANTIEPILEPTIC DRUGS FOR THE TREATMENT OF EPILEPSY. <--
4 (b) Definition.--As used in this section, the term
5 "psychotropic drug" means a drug used to treat a mental
6 disorder.
7 Section 6 4. Section 701 of the act, added November 21, 1996 <--
8 (P.L.741, No.134), is amended to read:
9 [Section 701. Declaration of policy.
10 The General Assembly finds and declares as follows:
11 (1) The Commonwealth, through assistance programs
12 enacted for the benefit of its citizens, is the largest
13 single payor of prescription medications in Pennsylvania.
14 (2) In order to ensure that the Commonwealth, in
15 expending money on behalf of its citizens, is not unduly
16 harmed by being required to pay a price for pharmaceutical
17 products purchased from manufacturers in excess of that
18 established for other purchasers and reimbursers of these
19 products and to ensure that the Commonwealth can efficiently
20 and prudently expend its money and maximize its ability to
21 provide for the health and welfare of as many of its needy
22 citizens as possible, it is reasonable, necessary and in the
23 public interest to require that pharmaceutical manufacturers
24 offer a discount to the Commonwealth for pharmaceutical
25 products purchased or reimbursed through State agencies.
26 (3) It is in the public interest for pharmaceutical
27 manufacturers to provide the Commonwealth with data relating
28 to the price of pharmaceutical products sold by the
29 manufacturer to public bodies, hospitals, for-profit or
30 nonprofit organizations, other manufacturers or wholesalers
20030H0888B2794 - 21 -
1 doing business in this Commonwealth in order to ensure that
2 the Commonwealth can determine that it is being provided with
3 the best prices offered by the manufacturer.
4 (4) On a national level, there has been a recognition
5 that the need for discounts to State Medicaid agencies, which
6 reimburse for a high volume of pharmaceutical products,
7 exists.
8 (5) On a State level, the General Assembly recognizes
9 that it is in the best interest of its citizens to provide
10 pharmaceutical assistance in a reasonable and cost-efficient
11 manner.
12 (6) Drug price inflation has caused an increase in the
13 amount of public funds expended by PACE and General
14 Assistance.]
15 Section 7. Section 702 of the act is amended by adding a <--
16 definition to read:
17 SECTION 5. THE DEFINITION OF "PROVIDER" IN SECTION 702 OF <--
18 THE ACT, ADDED NOVEMBER 21, 1996 (P.L.741, NO.134), IS AMENDED
19 AND THE SECTION IS AMENDED BY ADDING A DEFINITION TO READ:
20 Section 702. Definitions.
21 The following words and phrases when used in this chapter
22 shall have the meanings given to them in this section unless the
23 context clearly indicates otherwise:
24 * * *
25 "Best price." The lowest price available from the
26 manufacturer during the rebate period to any wholesaler,
27 retailer, provider, health maintenance organization, nonprofit
28 entity or any governmental entity subject to the exclusions and
29 special rules set forth in sections 1902 and 1927(c)(1)(C) of
30 the Social Security Act (49 Stat. 620, 42 U.S.C. §§1396c, 1396r-
20030H0888B2794 - 22 -
1 8(c)(1)(C)).
2 * * *
3 "PROVIDER." A LICENSED PHARMACY [OR], LICENSED DISPENSING <--
4 PHYSICIAN OR CERTIFIED REGISTERED NURSE PRACTITIONER ENROLLED AS
5 A PROVIDER IN PACE, PACENET OR DESIGNATED PHARMACEUTICAL
6 PROGRAMS.
7 * * *
8 Section 8 6. Sections 703(e), 704(c)(1) and 705(a) and (b) <--
9 of the act, added November 21, 1996 (P.L.741, No.134), are
10 amended to read:
11 Section 703. Rebate agreement.
12 * * *
13 (e) Drug formulary.--Except as provided in section 512 and
14 Chapter 6, there shall be no drug formulary[, prior or <--
15 retroactive approval system or any similar restriction] imposed <--
16 on the coverage of outpatient drugs made by manufacturers who
17 have agreements in effect with the Commonwealth to pay rebates
18 for drugs utilized in PACE and PACENET, provided that such
19 outpatient drugs were approved for marketing by the Food and
20 Drug Administration. This subsection shall not apply to any act
21 taken by the department pursuant to its therapeutic drug
22 utilization review program under section 505.
23 Section 704. Terms of rebate agreement.
24 * * *
25 (c) Manufacturer provision of price information.--
26 (1) Each manufacturer with an agreement in effect under
27 this chapter shall report the average manufacturer price and
28 the best price for all covered prescription drugs produced by
29 that manufacturer to the department not later than 30 days
30 after the last day of each quarter.
20030H0888B2794 - 23 -
1 * * *
2 Section 705. Amount of rebate.
3 (a) Single-source drugs and innovator multiple-source
4 drugs.--With respect to single-source drugs and innovator
5 multiple-source drugs, each manufacturer shall remit a rebate to
6 the Commonwealth pursuant to the determination established by
7 section 1927(c)(1)(C) of the Social Security Act (49 Stat. 620,
8 42 U.S.C. § 1396r-8(c)(1)(C)). [Except as otherwise provided in
9 this section, the amount of the rebate to the Commonwealth per
10 calendar quarter with respect to each dosage form and strength
11 of single-source drugs and innovator multiple-source drugs shall
12 be as follows:
13 (1) For quarters beginning after September 30, 1992, and
14 ending before January 1, 1997, the product of the total
15 number of units of each dosage form and strength reimbursed
16 by PACE and General Assistance in the quarter and the
17 difference between the average manufacturer price and 85% of
18 that price, after deducting customary prompt payment
19 discounts, for the quarter.
20 (2) For quarters beginning after December 31, 1996, the
21 product of the total number of units of each dosage form and
22 strength reimbursed by PACE, PACENET and designated
23 pharmaceutical programs in the quarter and the difference
24 between the average manufacturer price and 83% of that price,
25 after deducting customary prompt payment discounts.]
26 (b) Rebate for other drugs.--
27 [(1) The amount of the rebate to the Commonwealth for a
28 calendar quarter with respect to covered prescription drugs
29 which are noninnovator multiple-source drugs shall be equal
30 to the product of:
20030H0888B2794 - 24 -
1 (i) the applicable percentage of the average
2 manufacturer price, after deducting customary prompt
3 payment discounts, for each dosage form and strength of
4 such drugs for the quarter; and
5 (ii) the number of units of such form and dosage
6 reimbursed by PACE and General Assistance in the quarter.
7 (2) For the purposes of paragraph (1), the applicable
8 percentage for calendar quarters beginning after September
9 30, 1992, and ending before January 1, 1997, is 11%.] With
10 respect to covered prescription drugs which are noninnovator
11 multiple-source drugs, each manufacturer shall remit a rebate
12 to the Commonwealth pursuant to the determination established
13 by section 1927(c)(1)(C) of the Social Security Act. BY <--
14 SECTION 1927(C)(3) OF THE SOCIAL SECURITY ACT (49 STAT. 620,
15 42 U.S.C. § 1396R-8(C)(3)).
16 * * *
17 Section 9 7. The act is amended by adding a chapter to read: <--
18 CHAPTER 8
19 PHARMACEUTICAL ASSISTANCE CLEARINGHOUSE
20 Section 801. Definitions.
21 The following words and phrases when used in this chapter
22 shall have the meanings given to them in this section unless the
23 context clearly indicates otherwise:
24 "Clearinghouse." The Pharmaceutical Assistance Clearinghouse
25 established in section 802.
26 "Department." The Department of Aging of the Commonwealth.
27 "Patient assistance program." A program offered by a
28 pharmaceutical manufacturer under which the manufacturer
29 provides prescription medications at no charge or at a
30 substantially reduced cost. The term does not include the
20030H0888B2794 - 25 -
1 provision of a drug as part of a clinical trial.
2 "VOLUNTARY HEALTH ORGANIZATION." AN ORGANIZATION WHOSE MAIN <--
3 PURPOSE IS TO EDUCATE THE PUBLIC ON THE SYMPTOMS, TREATMENTS AND
4 RESEARCH OF A DISEASE AND THAT MAY PROVIDE SUPPORT FOR PERSONS
5 WHO HAVE THE DISEASE.
6 Section 802. Pharmaceutical Assistance Clearinghouse.
7 (a) Establishment.--Within 120 days of the effective date of
8 this chapter, the department shall establish the Pharmaceutical
9 Assistance Clearinghouse. Each pharmaceutical manufacturer that
10 does business in this Commonwealth and offers a patient
11 assistance program shall inform the department of all of the
12 following:
13 (1) The existence of the patient assistance program.
14 (2) The eligibility requirements for the patient
15 assistance program.
16 (3) The drugs covered by the patient assistance program.
17 (4) Information, such as a telephone number, which may
18 be used to apply for a patient assistance program.
19 (b) Information.--The clearinghouse shall maintain the
20 information submitted by pharmaceutical manufacturers AND ANY <--
21 APPROPRIATE VOLUNTARY HEALTH ORGANIZATION THAT WOULD LIKE TO
22 PARTICIPATE and make it available to the public.
23 (c) Staff.--The department shall ensure that the
24 clearinghouse is staffed at least during normal business hours.
25 The department shall contract for the services of a school of <--
26 pharmacy to staff the clearinghouse.
27 Section 803. Toll-free telephone number.
28 The department shall establish a toll-free telephone number
29 through which members of the public may obtain information from
30 the clearinghouse about available patient assistance programs.
20030H0888B2794 - 26 -
1 Section 804. Assistance available.
2 (a) Direct.--
3 (1) The clearinghouse shall assist without charge an
4 individual in determining whether a patient assistance
5 program is offered for a particular drug and whether the
6 individual may be eligible to obtain the drug through a
7 patient assistance program.
8 (2) The clearinghouse may assist without charge an
9 individual who wishes to apply for a patient assistance
10 program by assisting with the preparation of an application
11 and coordinating communications between the individual's
12 physician, OR CERTIFIED REGISTERED NURSE PRACTITIONER and a <--
13 pharmaceutical manufacturer on behalf of the individual for
14 the purpose of obtaining approval to participate in the
15 patient assistance program.
16 (b) Referrals.--The clearinghouse shall make referrals to AN <--
17 APPROPRIATE VOLUNTARY HEALTH ORGANIZATION OR any publicly funded
18 program for which it deems a patient eligible.
19 Section 805. Reporting.
20 The department shall report annually to the Governor and the
21 General Assembly on the activities of the clearinghouse. The
22 report shall include:
23 (1) The number of individuals who have been assisted by
24 the clearinghouse under section 804(a)(1) and the number of
25 such individuals under section 804(a)(2).
26 (2) The number and benefits of patient assistance
27 programs listed with the clearinghouse.
28 (3) The number of patients referred to publicly funded
29 programs under section 804(b). Programs under this paragraph
30 include, but are not limited to, the Pharmaceutical
20030H0888B2794 - 27 -
1 Assistance Contract for the Elderly Program, medical
2 assistance and programs of the Department of Veterans
3 Affairs.
4 (4) Other information deemed relevant by the department.
5 Section 806. Internet availability of information.
6 The department shall maintain and provide to the public the
7 information under this chapter on its World Wide Web site. The
8 department shall also provide to appropriate organizations the
9 information necessary for the organizations to establish a link
10 to the location of clearinghouse information on the department's
11 World Wide Web site.
12 Section 10 8. Section 2102(a) of the act, added November 21, <--
13 1996 (P.L.741, No.134), is amended to read:
14 Section 2102. Annual report to General Assembly.
15 (a) Submission of report.--The department shall submit a
16 report no later than April 1 of each year to the chairman and
17 minority chairman of the Aging and Youth Committee of the
18 Senate, the chairman and minority chairman of the Aging and
19 [Youth] Older Adult Services Committee of the House of
20 Representatives and the Pharmaceutical Assistance Review Board.
21 * * *
22 Section 11 9. The act is amended by adding sections to read: <--
23 Section 2103. Federal programs.
24 If the Federal Government enacts programs similar to PACE or
25 PACENET, the State programs shall be construed to only
26 supplement the Federal programs and all persons qualified for
27 coverage under the Federal program shall utilize that Federal
28 program before utilizing any State program.
29 Section 2104. Pharmacy benefits administrator study.
30 (a) Study.--The Department of Aging shall conduct a study on
20030H0888B2794 - 28 -
1 the effects within the PACE and PACENET programs of implementing
2 a pharmacy benefits administrator component. The study shall
3 examine the ability of the pharmacy benefits administrator to do
4 the following:
5 (1) Negotiate rebates on behalf of the plan.
6 (2) Create a drug criteria for enrollment within the <--
7 program. UTILIZATION PURPOSES. <--
8 (3) Contract with providers.
9 (4) Conduct enrollment adjudication on behalf of
10 applicants.
11 (b) Report.--The department shall submit a report no later
12 than one year from the effective date of this section to the
13 chairman and minority chairman of the Aging and Youth Committee
14 of the Senate, the chairman and minority chairman of the Aging
15 and Older Adult Services Committee of the House of
16 Representatives and the Pharmaceutical Assistance Review Board.
17 Section 12 10. The Department of Aging may use a PACE or <--
18 PACENET program applicant's most recent ANNUAL income <--
19 information to determine program eligibility until April 1,
20 2004.
21 SECTION 11. THE AMENDMENT OF SECTIONS 703(E), 704(C)(1) AND <--
22 705(A) AND (B) OF THE ACT SHALL APPLY RETROACTIVELY TO JANUARY
23 1, 2003.
24 Section 13 12. This act shall take effect as follows: <--
25 (1) The following provisions shall take effect January
26 1, 2004:
27 (i) The amendment or addition of the definitions of
28 "CMS," "HFCA" and "maximum annual income" in section 502
29 of the act.
30 (ii) The amendment of section 519 of the act.
20030H0888B2794 - 29 -
1 (2) The remainder of this act shall take effect
2 immediately.
E14L67VDL/20030H0888B2794 - 30 -