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Senate Bill 2348

Senate Bill sb2348

CODING: Words stricken are deletions; words underlined are additions.
    Florida Senate - 2002                                  SB 2348

    By Senator Silver





    38-1488-02                                              See HB

  1                      A bill to be entitled

  2         An act relating to prescription drugs; creating

  3         s. 499.101, F.S.; providing a short title;

  4         creating s. 499.103, F.S.; creating the

  5         "Florida Prescription Drug Fair Pricing

  6         Program"; providing purpose of the program;

  7         creating s. 499.105, F.S.; providing

  8         definitions; creating s. 499.107, F.S.;

  9         providing that the Secretary of Health Care

10         Administration shall operate the Florida

11         Prescription Drug Fair Pricing Program as a

12         state pharmaceutical assistance program to

13         provide discounts to participants for

14         prescription drugs covered by a rebate

15         agreement; providing that the secretary shall

16         negotiate discount prices or rebates for

17         prescription drugs from manufacturers or

18         labelers; providing that the Agency for Health

19         Care Administration shall contract with

20         participating retail pharmacies to deliver

21         discounted prices to program participants;

22         providing factors to be considered in

23         negotiating discounts or rebates; providing for

24         quarterly calculation of discounts; creating s.

25         499.109, F.S.; requiring program participants

26         to pay a specified coinsurance amount;

27         requiring participating retail pharmacies in

28         the state to charge the rate allowable under

29         the Medicaid program for prescription drugs

30         sold to program participants; providing for

31         rate of reimbursement of participating retail

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    Florida Senate - 2002                                  SB 2348
    38-1488-02                                              See HB




  1         pharmacies; creating s. 499.201, F.S.;

  2         providing for program eligibility; requiring

  3         the Agency for Health Care Administration to

  4         establish enrollment procedures; providing for

  5         an annual enrollment fee; providing for use of

  6         enrollment fees and rebates from drug

  7         manufacturers; creating s. 499.203, F.S.;

  8         providing for operation of the program;

  9         authorizing the Board of Pharmacy to adopt

10         certain rules; creating s. 499.205, F.S.;

11         providing procedure for resolution of

12         discrepancies in rebate amounts; creating s.

13         499.207, F.S.; requiring an annual report;

14         creating s. 499.209, F.S.; authorizing

15         coordination with other programs; creating s.

16         499.301, F.S.; authorizing the agency to adopt

17         rules; creating s. 499.303, F.S.; authorizing

18         the agency to seek certain waivers; providing

19         severability; providing an effective date.

20

21  Be It Enacted by the Legislature of the State of Florida:

22

23         Section 1.  Section 499.101, Florida Statutes, is

24  created to read:

25         499.101  Short title.--Sections 499.101-499.303 may be

26  cited as the "Florida Prescription Drug Fair Pricing Act."

27         Section 2.  Section 499.103, Florida Statutes, is

28  created to read:

29         499.103  Florida Prescription Drug Fair Pricing Program

30  established; findings; purpose.--

31

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    Florida Senate - 2002                                  SB 2348
    38-1488-02                                              See HB




  1         (1)  It is the finding of the Legislature that

  2  approximately one in four residents of Florida have no

  3  prescription drug insurance coverage or wholly inadequate

  4  prescription drug insurance coverage. These uninsured

  5  residents pay excessive prices for prescription drugs, far

  6  higher prices than are paid by managed care organizations,

  7  insurance companies, and the Federal Government for the same

  8  medicines and dosages. In many cases, these excessive drug

  9  prices have the effect of denying residents access to

10  medically necessary care, thereby threatening their health and

11  safety. Many Florida residents require repeated doctor or

12  medical clinic appointments, having become sicker because they

13  could not afford to purchase the prescription drugs prescribed

14  for them. Many residents are admitted to or treated at

15  hospitals each year because they cannot afford the

16  prescription drugs that could have prevented the need for

17  hospitalization. Many others enter expensive institutional

18  care settings because they cannot afford the necessary

19  prescription drugs that could have supported them outside of

20  an institution. In each of these circumstances, state medical

21  assistance programs, including the Medicaid program, literally

22  pay the price. One major reason uninsured residents pay such

23  high prices for prescription drugs is that, unlike insured

24  residents, they have no prescription benefits manager

25  negotiating a fair price with drug companies on their behalf.

26  State government currently provides prescription drugs and

27  acts as a prescription benefit manager through a variety of

28  health plans and assistance programs and, in 2001, the

29  Legislature expanded the state's role in negotiating better

30  prescription drug prices for Medicaid. State government is the

31  only agent that, as a practical matter, can play an effective

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    Florida Senate - 2002                                  SB 2348
    38-1488-02                                              See HB




  1  role as a market participant on behalf of all residents who

  2  are uninsured or underinsured. The state can and should act as

  3  a prescription benefit manager, negotiating drug rebates and

  4  using these funds to reimburse retail pharmacies for offering

  5  lower drug prices.

  6         (2)  Recognizing that the state already acts as a

  7  prescription benefit manager for a variety of health plans and

  8  assistance programs, including the Medicaid program, the

  9  Florida Prescription Drug Fair Pricing Program is established

10  within the Agency for Health Care Administration. The purpose

11  of the program is to expand Medicaid eligibility for

12  prescription drug benefits only, at a level that does not

13  exceed available funding, thereby providing prescription drug

14  coverage to new populations by expanding the state's role as a

15  participant in the prescription drug marketplace, negotiating

16  rebates from drug companies, and using the funds from such

17  rebates to make prescription drugs more affordable to Florida

18  residents. Each program participant shall receive a discount

19  toward the purchase of any prescription drug included on the

20  state Medicaid preferred drug formulary established pursuant

21  to s. 409.912. No discount shall be applied toward the

22  purchase of any prescription drug that is not included on such

23  formulary. The Legislature finds that such a program will

24  improve public health and welfare, promote the economic

25  strength of our society, and substantially benefit state

26  health assistance programs, including the Medicaid program.

27         Section 3.  Section 499.105, Florida Statutes, is

28  created to read:

29         499.105  Definitions.--As used in this act, unless the

30  context otherwise indicates, the following terms have the

31  following meanings:

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    Florida Senate - 2002                                  SB 2348
    38-1488-02                                              See HB




  1         (1)  "Agency" means the Agency for Health Care

  2  Administration.

  3         (2)  "Labeler" means an entity or person that receives

  4  prescription drugs from a manufacturer or wholesaler and

  5  repackages those drugs for later retail sale and that has a

  6  labeler code from the federal Food and Drug Administration

  7  under 21 C.F.R. s. 207.20 (1999).

  8         (3)  "Manufacturer" means a manufacturer of

  9  prescription drugs and includes a subsidiary or affiliate of a

10  manufacturer.

11         (4)  "Participating retail pharmacy" means a retail

12  pharmacy or other business licensed to dispense prescription

13  drugs in this state that:

14         (a)  Participates in the state Medicaid program; or

15         (b)  Agrees to participate in the Florida Prescription

16  Drug Fair Pricing Program.

17         (5)  "Program" means the Florida Prescription Drug Fair

18  Pricing Program.

19         (6)  "Secretary" means the Secretary of Health Care

20  Administration, or the secretary's designee.

21         (7)  "Qualified resident" means an uninsured resident

22  of the state who has obtained from the agency a Florida

23  Prescription Drug Fair Pricing Program enrollment card.

24         Section 4.  Section 499.107, Florida Statutes, is

25  created to read:

26         499.107  Prescription drug discounts; negotiation of

27  discounts or rebates; calculation of discounts.--The Secretary

28  of Health Care Administration shall operate the Florida

29  Prescription Drug Fair Pricing Program as a state

30  pharmaceutical assistance program under 42 U.S.C. s.

31

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    Florida Senate - 2002                                  SB 2348
    38-1488-02                                              See HB




  1  1396r-8(c)(1)(C)(i)(III) to provide discounts to participants

  2  for prescription drugs covered by a rebate agreement.

  3         (1)  The secretary shall negotiate discount prices or

  4  rebates for prescription drugs from drug manufacturers and

  5  labelers for the program. Using sums from negotiated rebates,

  6  the agency shall contract with participating retail pharmacies

  7  to deliver discounted prices to program participants.

  8         (2)  In negotiating discount or rebate terms, the

  9  secretary shall take into consideration:

10         (a)  The rebate calculated under the Medicaid rebate

11  program pursuant to 42 U.S.C. s. 1396r-8;

12         (b)  The price provided to eligible entities under 42

13  U.S.C. s. 256b; and

14         (c)  Any other available information on prescription

15  drug prices, discounts, and rebates.

16         (3)  The secretary may consider any supplemental rebate

17  negotiated pursuant to s. 409.912(37)(a)7.

18         (4)  The drug discounts received by program

19  participants shall be calculated by the secretary on a

20  quarterly basis.

21         Section 5.  Section 499.109, Florida Statutes, is

22  created to read:

23         499.109  Discounted prices for program participants.--

24         (1)  Each participant enrolled in the Florida

25  Prescription Drug Fair Pricing Program shall pay a coinsurance

26  amount equal to the Medicaid allowable charge minus the amount

27  paid by the agency.

28         (2)  A participating retail pharmacy shall charge the

29  Medicaid allowable rate for prescription drugs sold to

30  participants in the Florida Prescription Drug Fair Pricing

31  Program.

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    Florida Senate - 2002                                  SB 2348
    38-1488-02                                              See HB




  1         (3)  The participating retail pharmacy shall be

  2  reimbursed by the agency at the agency's manufacturer

  3  estimated rebate amount.

  4         (4)  The Florida Prescription Drug Fair Pricing Program

  5  as established in s. 409.103 is not an entitlement.

  6         Section 6.  Section 499.201, Florida Statutes, is

  7  created to read:

  8         499.201  Program eligibility.--

  9         (1)  An individual is eligible to participate in the

10  Florida Prescription Drug Fair Pricing Program if he or she:

11         (a)  Is a resident of the state;

12         (b)  Is a Medicare recipient whose benefits do not

13  include coverage for prescription drugs;

14         (c)  Has a net family income at or below 300 percent of

15  the federal poverty level; and

16         (d)  Requests to be enrolled in the program.

17         (2)  An individual is ineligible to participate in the

18  Florida Prescription Drug Fair Pricing Program if he or she is

19  eligible for assistance under the state's Medicaid program or

20  is covered by an insurance policy that provides benefits for

21  prescription drugs equal to or greater than the benefits

22  provided under the Florida Prescription Drug Fair Pricing

23  Program, as delineated by rules promulgated by the secretary.

24         (3)  The agency shall establish simple procedures for

25  enrolling program participants. Such procedures shall include

26  the assessment of an annual enrollment fee of $25 per

27  enrollee. The agency shall undertake outreach efforts to build

28  public awareness of the program and maximize enrollment by

29  eligible residents. Revenues generated from program enrollment

30  fees and rebates from drug manufacturers shall be used for,

31

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    Florida Senate - 2002                                  SB 2348
    38-1488-02                                              See HB




  1  but not be limited to, offsetting state costs to administer

  2  the program and the purchase of prescription drugs.

  3         Section 7.  Section 499.203, Florida Statutes, is

  4  created to read:

  5         499.203  Program operation.--

  6         (1)  The Board of Pharmacy, as created by s. 465.004,

  7  in consultation with the Agency for Health Care

  8  Administration, is authorized to adopt rules pursuant to ss.

  9  120.536(1) and 120.54 requiring disclosure by participating

10  retail pharmacies to program participants of the amount of

11  savings provided as a result of the Florida Prescription Drug

12  Fair Pricing Program. Such rules must protect information that

13  is proprietary in nature.

14         (2)  Participating retail pharmacies shall be paid in

15  advance for program discounts or shall be reimbursed by the

16  agency on a weekly or biweekly basis, in accordance with

17  contracts between the agency and such businesses.

18         (3)  The agency shall collect from the participating

19  retail pharmacies utilization data necessary to calculate the

20  amount of the rebate from the manufacturer or labeler. The

21  agency shall protect the confidentiality of all information

22  subject to confidentiality protection under the laws of this

23  state or federal laws, rules, or regulations.

24         Section 8.  Section 499.205, Florida Statutes, is

25  created to read:

26         499.205  Discrepancies in rebate

27  amounts.--Discrepancies in rebate amounts must be resolved

28  using the process established in this section.

29         (1)  If there is a discrepancy in the manufacturer's or

30  labeler's favor between the amount claimed by a participating

31  retail pharmacy and the amount rebated by the manufacturer or

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    Florida Senate - 2002                                  SB 2348
    38-1488-02                                              See HB




  1  labeler, the agency, at the agency's expense, may hire a

  2  mutually agreed-upon independent auditor. If a discrepancy

  3  still exists following the audit, the manufacturer or labeler

  4  shall justify the reason for the discrepancy or make payment

  5  to the agency for any additional amount due.

  6         (2)  If there is a discrepancy against the interest of

  7  the manufacturer or labeler in the information provided by the

  8  agency to the manufacturer or labeler regarding the

  9  manufacturer's or labeler's rebate, the manufacturer or

10  labeler, at the manufacturer's or labeler's expense, may hire

11  a mutually agreed-upon independent auditor to verify the

12  accuracy of the data supplied to the agency. If a discrepancy

13  still exists following the audit, the agency shall justify the

14  reason for the discrepancy or refund the manufacturer or

15  labeler.

16         (3)  Following the completion of procedures established

17  in subsection (1) or subsection (2), the agency, the

18  manufacturer, or the labeler may request a hearing. Hearings

19  shall be conducted pursuant to ss. 120.569 and 120.57.

20  Supporting documentation must accompany the request for a

21  hearing.

22         Section 9.  Section 499.207, Florida Statutes, is

23  created to read:

24         499.207  Report.--The agency shall provide a report on

25  the enrollment and financial status of the Florida

26  Prescription Drug Fair Pricing Program to the Governor, the

27  President of the Senate, and the Speaker of the House of

28  Representatives by the second week in January each year.

29         Section 10.  Section 499.209, Florida Statutes, is

30  created to read:

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    Florida Senate - 2002                                  SB 2348
    38-1488-02                                              See HB




  1         499.209  Coordination with other programs.--The

  2  secretary shall combine drug pricing negotiations to maximize

  3  drug rebates where the secretary determines that the

  4  combination of such negotiations is beneficial to both the

  5  Florida Prescription Drug Fair Pricing Program and another

  6  state program, including the state Medicaid program.

  7         Section 11.  Section 499.301, Florida Statutes, is

  8  created to read:

  9         499.301  Rulemaking.--The agency is authorized to adopt

10  rules pursuant to ss. 120.536(1) and 120.54 to implement the

11  provisions of this act. Such rules shall include eligibility

12  requirements, limits on participation, benefit limitations, a

13  requirement for generic drug substitution, and other program

14  parameters comparable to those of the Medicaid program.

15         Section 12.  Section 499.303, Florida Statutes, is

16  created to read:

17         499.303  Waivers.--The agency may seek any waivers of

18  federal law, rule, or regulation necessary to implement the

19  provisions of this act.

20         Section 13.  If any provision of this act or the

21  application thereof to any person or circumstance is held

22  invalid, the invalidity shall not affect other provisions or

23  applications of the act which can be given effect without the

24  invalid provision or application, and to this end the

25  provisions of this act are declared severable.

26         Section 14.  This act shall take effect July 1, 2002.

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    Florida Senate - 2002                                  SB 2348
    38-1488-02                                              See HB




  1            *****************************************

  2                          HOUSE SUMMARY

  3
      Creates the "Florida Prescription Drug Fair Pricing Act."
  4    Provides purposes of the act. Provides that the Secretary
      of Health Care Administration shall operate the Florida
  5    Prescription Drug Fair Pricing Program as a state
      pharmaceutical assistance program to provide discounts to
  6    participants for prescription drugs covered by a rebate
      agreement. Provides that the secretary shall negotiate
  7    discount prices or rebates for prescription drugs from
      manufacturers or labelers.  Provides that the Agency for
  8    Health Care Administration shall contract with
      participating retail pharmacies to deliver discounted
  9    prices to program participants.  Provides factors to be
      considered in negotiating discounts or rebates.  Provides
10    for quarterly calculation of discounts. Requires program
      participants to pay a specified coinsurance amount.
11    Requires participating retail pharmacies in the state to
      charge the rate allowable under the Medicaid program for
12    prescription drugs sold to program participants. Provides
      for rate of reimbursement of participating retail
13    pharmacies. Provides for program eligibility. Requires
      the Agency for Health Care Administration to establish
14    enrollment procedures.  Provides for an annual enrollment
      fee of $25 per enrollee.  Provides for use of enrollment
15    fees and rebates from drug manufacturers. Provides for
      operation of the program. Provides procedure for
16    resolution of discrepancies in rebate amounts. Requires
      an annual report. Authorizes coordination with other
17    programs. Authorizes the agency to adopt rules and seek
      certain waivers.
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