1.1                          A bill for an act 
  1.2             relating to health; modifying provisions of the 
  1.3             Nongovernmental Pharmaceutical Contracting Alliance; 
  1.4             requiring certain prescription drug contracting 
  1.5             disclosures; appropriating money; amending Minnesota 
  1.6             Statutes 1998, sections 16B.94; and 62J.381. 
  1.7   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.8      Section 1.  Minnesota Statutes 1998, section 16B.94, is 
  1.9   amended to read: 
  1.10     16B.94 [NONGOVERNMENTAL PHARMACEUTICAL CONTRACTING 
  1.11  ALLIANCE.] 
  1.12     Subdivision 1.  [ESTABLISHMENT AND ADMINISTRATION.] The 
  1.13  commissioner, in consultation with appropriate experts on 
  1.14  pharmaceutical pricing, shall establish and administer a 
  1.15  Nongovernmental Pharmaceutical Contracting Alliance.  The 
  1.16  Nongovernmental Alliance shall negotiate contracts for 
  1.17  prescription drugs with manufacturers and sellers and shall make 
  1.18  the contract prices negotiated available to purchasers.  The 
  1.19  commissioner shall select the prescription drugs for which price 
  1.20  contracts are negotiated.  The commissioner shall, to the 
  1.21  greatest extent feasible, operate the alliance using the 
  1.22  administrative and contracting procedures of the Minnesota 
  1.23  Multistate Governmental Contracting Alliance for Pharmaceuticals 
  1.24  administered by the commissioner under the authority granted in 
  1.25  section 471.59.  The commissioner may negotiate a price 
  1.26  differential based on volume purchasing and may also grant 
  2.1   multiple awards. 
  2.2      Subd. 1a.  [UNFAIR PRICE DISCRIMINATION.] If a contract 
  2.3   price disclosed under section 62J.381, subdivision 3, is lower 
  2.4   than the contract price negotiated by the commissioner under 
  2.5   this section for the same prescription drug, the manufacturer or 
  2.6   seller must show cause as to why this discrepancy does not 
  2.7   violate section 151.061. 
  2.8      Subd. 2.  [USE OF CONTRACTOR.] The commissioner may shall 
  2.9   contract with an individual, business entity, or other private 
  2.10  organization to serve as a contractor to negotiate and 
  2.11  administer the price contracts for prescription drugs.  In 
  2.12  developing requirements for the contractor, the commissioner 
  2.13  shall consult with appropriate experts on pharmaceutical pricing.
  2.14  The contractor may negotiate a price differential based on 
  2.15  volume purchasing and may also grant multiple awards. 
  2.16     Subd. 3.  [ADMINISTRATIVE COSTS.] The commissioner 
  2.17  contractor may charge manufacturers and sellers that enter into 
  2.18  prescription drug price contracts with the commissioner under 
  2.19  subdivision 1 the Nongovernmental Pharmaceutical Contracting 
  2.20  Alliance a fee to cover the commissioner's contractor's expenses 
  2.21  in negotiating and administering the price contracts.  The fee 
  2.22  established shall have the force and effect of law if the 
  2.23  requirements of section 14.386, paragraph (a), are met.  Section 
  2.24  14.386, paragraph (b), does not apply.  Fees collected by 
  2.25  the commissioner contractor under this subdivision must be 
  2.26  deposited in the state treasury and credited to a special 
  2.27  account.  Money in the account is appropriated to the 
  2.28  commissioner to pay the costs of negotiating and administering 
  2.29  price contracts under this section. 
  2.30     Subd. 4.  [EXPANSION TO OTHER STATES.] The commissioner may 
  2.31  expand the Nongovernmental Alliance to other states and make the 
  2.32  contract prices negotiated available to non-Minnesota purchasers.
  2.33     Sec. 2.  Minnesota Statutes 1998, section 62J.381, is 
  2.34  amended to read: 
  2.35     62J.381 [PRESCRIPTION DRUG PRICE DISCLOSURE.] 
  2.36     Subdivision 1.  [DEFINITION.] For purposes of this section, 
  3.1   "manufacturer" has the meaning given under section 151.44, 
  3.2   paragraph (c), and "wholesale drug distributor" has the meaning 
  3.3   given under section 151.44, paragraph (b). 
  3.4      Subd. 2.  [AGGREGATE REPORTING.] (a) By April 1, 1999, and 
  3.5   annually thereafter, hospitals licensed under chapter 144 and 
  3.6   group purchasers required to file a full report under section 
  3.7   62J.38 and the rules promulgated thereunder, must submit to the 
  3.8   commissioner of health the total amount of: 
  3.9      (1) aggregate purchases of or payments for prescription 
  3.10  drugs; and 
  3.11     (2) aggregate cash rebates, discounts, other payments 
  3.12  received, and any fees associated with education, data 
  3.13  collection, research, training, or market share movement, which 
  3.14  are received during the previous calendar year from a 
  3.15  manufacturer as defined under section 151.44, paragraph (c), or 
  3.16  a wholesale drug distributor as defined under section 151.44, 
  3.17  paragraph (d). 
  3.18     (b) The data collected under this section subdivision shall 
  3.19  be distributed through the information clearinghouse under 
  3.20  section 62J.2930.  The identification of individual 
  3.21  manufacturers or wholesalers or specific drugs shall not be 
  3.22  required under this section.  
  3.23     Subd. 3.  [PRICE DISCLOSURE.] (a) By April 1, 2001, and 
  3.24  annually thereafter, hospitals licensed under chapter 144 and 
  3.25  group purchasers required to file a full report under section 
  3.26  62J.38 and the rules adopted thereunder must disclose to the 
  3.27  commissioner of health the terms of any contract entered into 
  3.28  with a manufacturer or wholesale drug distributor that relate to 
  3.29  the purchase or use of prescription drugs.  This disclosure must 
  3.30  include the price paid for the drug and any discount or rebate 
  3.31  provided to the hospital or group purchaser by a manufacturer or 
  3.32  wholesale drug distributor for the direct purchase of the drug 
  3.33  or for the inclusion of the drug on a drug formulary.  Each 
  3.34  hospital and group purchaser must also disclose any payment or 
  3.35  fee associated with education, data collection, research, 
  3.36  training, or market share movement received from a manufacturer 
  4.1   or a wholesale drug distributor. 
  4.2      (b) The data collected under this subdivision shall be 
  4.3   available to the public through the information clearinghouse 
  4.4   under section 62J.2930 and shall be provided to the commissioner 
  4.5   of administration and the commissioner's contractor to be used 
  4.6   as part of the negotiation and administration of the 
  4.7   Nongovernmental Pharmaceutical Contracting Alliance under 
  4.8   sections 16B.93 to 16B.96. 
  4.9      Sec. 3.  [APPROPRIATION.] 
  4.10     $....... is appropriated from the general fund to the 
  4.11  commissioner of administration for fiscal year 2001 to establish 
  4.12  the Nongovernmental Pharmaceutical Contracting Alliance under 
  4.13  Minnesota Statutes, sections 16B.93 to 16B.96. 
  4.14     Sec. 4.  [EFFECTIVE DATE.] 
  4.15     Sections 1 and 2 are effective for any contract entered 
  4.16  into or renewed on or after April 1, 2001.