1.1                          A bill for an act 
  1.2             relating to health; providing for a prescription drug 
  1.3             access program; proposing coding for new law in 
  1.4             Minnesota Statutes, chapter 62J. 
  1.5   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.6      Section 1.  [62J.6851] [DEFINITIONS.] 
  1.7      Subdivision 1.  [APPLICABILITY.] For purposes of sections 
  1.8   62J.6851 and 62J.6853, the following terms have the meanings 
  1.9   given them. 
  1.10     Subd. 2.  [AVERAGE WHOLESALE PRICE.] "Average wholesale 
  1.11  price" means the wholesale price charged on a specific commodity 
  1.12  that is assigned by the prescription drug manufacturer and is 
  1.13  listed in a nationally recognized drug pricing file. 
  1.14     Subd. 3.  [ELIGIBLE INDIVIDUAL.] "Eligible individual" 
  1.15  means a person who: 
  1.16     (1) meets the residency requirements of section 256L.09; 
  1.17     (2) is not eligible for a program under which federal, 
  1.18  state, or county funds are used to pay part or all of the cost 
  1.19  of the individual's prescription drugs; and 
  1.20     (3) does not have coverage for prescription drugs under a 
  1.21  health plan, as defined in section 62Q.01, subdivision 3. 
  1.22     Subd. 4.  [INITIAL DISCOUNTED PRICE.] "Initial discounted 
  1.23  price" means a price that is less than or equal to the average 
  1.24  wholesale price, minus six percent, plus the dispensing fee 
  1.25  allowed under the medical assistance program. 
  2.1      Subd. 5.  [LABELER.] "Labeler" means an entity or person 
  2.2   that receives prescription drugs from a prescription drug 
  2.3   manufacturer or wholesaler and repackages those drugs for later 
  2.4   retail sale and that has a labeler code from the federal Food 
  2.5   and Drug Administration under Code of Federal Regulations, title 
  2.6   21, section 207.20. 
  2.7      Subd. 6.  [PARTICIPATING RETAIL PHARMACY.] "Participating 
  2.8   retail pharmacy" means a retail pharmacy located in this state, 
  2.9   or another business licensed to dispense prescription drugs in 
  2.10  this state, that participates in the prescription drug access 
  2.11  program and that provides discounted prices to eligible 
  2.12  individuals as provided in section 62J.6853, subdivision 3. 
  2.13     Subd. 7.  [PRESCRIPTION DRUG MANUFACTURER OR 
  2.14  MANUFACTURER.] "Prescription drug manufacturer" or 
  2.15  "manufacturer" means a manufacturer, as defined under section 
  2.16  151.44, paragraph (c), of a prescription drug, as defined under 
  2.17  section 151.44, paragraph (d).  
  2.18     Subd. 8.  [SECONDARY DISCOUNTED PRICE.] "Secondary 
  2.19  discounted price" means a price that is equal to or less than 
  2.20  the initial discounted price minus the amount of any rebate paid 
  2.21  by the state to the participating retail pharmacy. 
  2.22     Sec. 2.  [62J.6853] [PRESCRIPTION DRUG ACCESS PROGRAM.] 
  2.23     Subdivision 1.  [REBATE AGREEMENT.] A prescription drug 
  2.24  manufacturer or labeler that sells prescription drugs in the 
  2.25  state through the medical assistance program or any other 
  2.26  publicly supported pharmaceutical assistance program shall enter 
  2.27  into a rebate agreement with the commissioner of 
  2.28  administration.  The rebate agreement must require the 
  2.29  manufacturer or labeler to make rebate payments to the state 
  2.30  each calendar quarter or according to a schedule established by 
  2.31  the commissioner. 
  2.32     Subd. 2.  [REBATE AMOUNT.] (a) The commissioner of 
  2.33  administration shall negotiate the amount of the rebate required 
  2.34  from a manufacturer or labeler according to this subdivision. 
  2.35     (b) The commissioner shall take into consideration the 
  2.36  rebate calculated under the Medicaid rebate program pursuant to 
  3.1   United States Code, title 42, section 1396r-8, the average 
  3.2   wholesale price of prescription drugs, and any other information 
  3.3   on prescription drug prices and price discounts. 
  3.4      (c) The commissioner shall use the commissioner's best 
  3.5   efforts to obtain an initial rebate amount equal to or greater 
  3.6   than the rebate calculated under the Medicaid program according 
  3.7   to United States Code, title 42, section 1396r-8. 
  3.8      (d) With respect to a rebate taking effect no later than 
  3.9   July 1, 2004, the commissioner shall use the commissioner's best 
  3.10  efforts to obtain an amount equal to or greater than the amount 
  3.11  of any discount, rebate, or price reduction for prescription 
  3.12  drugs provided to the federal government. 
  3.13     Subd. 3.  [DISCOUNTED PRICES FOR ELIGIBLE INDIVIDUALS.] (a) 
  3.14  Any participating retail pharmacy that sells prescription drugs 
  3.15  covered by a rebate agreement according to subdivision 1 shall 
  3.16  discount the retail price of those drugs sold to eligible 
  3.17  individuals. 
  3.18     (b) The commissioner of administration shall establish 
  3.19  discounted prices for drugs covered by a rebate agreement and 
  3.20  shall promote the use of efficacious and reduced-cost drugs, 
  3.21  taking into consideration reduced prices for state and federally 
  3.22  capped drug programs, differential dispensing fees, 
  3.23  administrative overhead, and incentive payments. 
  3.24     (c) Beginning January 1, 2004, a participating retail 
  3.25  pharmacy shall offer the initial discounted price. 
  3.26     (d) No later than July 1, 2004, a participating retail 
  3.27  pharmacy shall offer the secondary discounted price. 
  3.28     (e) In determining the amount of discounted prices, the 
  3.29  commissioner shall consider an average of all rebates provided 
  3.30  according to subdivision 2, weighted by sales of drugs subject 
  3.31  to these rebates over the most recent 12-month period for which 
  3.32  the information is available. 
  3.33     Subd. 4.  [OPERATION OF PROGRAM.] (a) The requirements of 
  3.34  this subdivision apply to participating retail pharmacies. 
  3.35     (b) The board of pharmacy shall adopt rules requiring 
  3.36  disclosure by participating retail pharmacies to eligible 
  4.1   individuals of the amount of savings provided as a result of the 
  4.2   prescription drug access program.  The rules must consider and 
  4.3   protect information that is proprietary in nature. 
  4.4      (c) The commissioner of administration may not impose 
  4.5   transaction charges under this program on participating retail 
  4.6   pharmacies that submit claims or receive payments under the 
  4.7   program. 
  4.8      (d) A participating retail pharmacy shall submit claims to 
  4.9   the commissioner to verify the amount charged to eligible 
  4.10  individuals under subdivision 3. 
  4.11     (e) On a weekly or biweekly basis, the commissioner must 
  4.12  reimburse a participating retail pharmacy for discounted prices 
  4.13  provided to eligible individuals under subdivision 3 and 
  4.14  professional fees, which must be set by the commissioner.  The 
  4.15  amount of the initial professional fee must be set at $3 per 
  4.16  prescription. 
  4.17     (f) The commissioner shall collect utilization data from 
  4.18  the participating retail pharmacies submitting claims necessary 
  4.19  to calculate the amount of the rebate from the manufacturer or 
  4.20  labeler.  The commissioner shall protect the confidentiality of 
  4.21  all information subject to confidentiality protection under 
  4.22  state or federal law, rule, or regulation. 
  4.23     Subd. 5.  [ACTION WITH REGARD TO NONPARTICIPATING 
  4.24  MANUFACTURERS AND LABELERS.] The names of manufacturers and 
  4.25  labelers who do and do not enter into rebate agreements 
  4.26  according to this section are public information.  The 
  4.27  commissioner of administration shall release this information to 
  4.28  health care providers and the public on a regular basis and 
  4.29  shall publicize participation by manufacturers and labelers that 
  4.30  is of particular benefit to the public.  The commissioner of 
  4.31  human services shall impose prior authorization requirements in 
  4.32  the medical assistance program, as permitted by law, for the 
  4.33  dispensing of prescription drugs provided by those manufacturers 
  4.34  and labelers who do not enter into rebate agreements under this 
  4.35  section. 
  4.36     Subd. 6.  [DISCREPANCIES IN REBATE AMOUNTS.] (a) 
  5.1   Discrepancies in rebate amounts must be resolved using the 
  5.2   process established in this subdivision. 
  5.3      (b) If there is a discrepancy in the manufacturer's or 
  5.4   labeler's favor between the amount claimed by a participating 
  5.5   retail pharmacy and the amount rebated by the manufacturer or 
  5.6   labeler, the commissioner of administration, at the 
  5.7   commissioner's expense, may hire a mutually agreed-upon 
  5.8   independent auditor.  If a discrepancy still exists following 
  5.9   the audit, the manufacturer or labeler shall justify the reason 
  5.10  for the discrepancy or make payment to the commissioner of 
  5.11  administration for any additional amount due. 
  5.12     (c) If there is a discrepancy against the interest of the 
  5.13  manufacturer or labeler in the information provided by the 
  5.14  commissioner to the manufacturer or labeler regarding the 
  5.15  manufacturer's or labeler's rebate, the manufacturer or labeler, 
  5.16  at the manufacturer's or labeler's expense, may hire a mutually 
  5.17  agreed-upon independent auditor to verify the accuracy of the 
  5.18  data supplied to the commissioner.  If a discrepancy still 
  5.19  exists following the audit, the commissioner shall justify the 
  5.20  reason for the discrepancy or refund to the manufacturer any 
  5.21  excess payment made by the manufacturer or labeler. 
  5.22     (d) Following the procedures established in paragraph (b) 
  5.23  or (c), either the commissioner or the manufacturer or labeler 
  5.24  may request a contested case hearing under chapter 14.  
  5.25  Supporting documentation must accompany the request for a 
  5.26  hearing. 
  5.27     Subd. 7.  [PRESCRIPTION DRUG FUND.] The prescription drug 
  5.28  fund is established in the state treasury.  The money in the 
  5.29  fund is appropriated to the commissioner of administration to 
  5.30  reimburse participating retail pharmacies according to 
  5.31  subdivision 4 and to administer the prescription drug access 
  5.32  program.  The fund consists of money deposited from rebates 
  5.33  obtained according to subdivision 2 and money appropriated by 
  5.34  law for purposes of the prescription drug access program. 
  5.35     Subd. 8.  [ANNUAL REPORT.] The commissioner of 
  5.36  administration shall report the enrollment and financial status 
  6.1   of the prescription drug access program to the legislature by 
  6.2   the second week in January each year. 
  6.3      Subd. 9.  [DUTIES OF COMMISSIONER.] The commissioner of 
  6.4   administration shall establish simplified procedures for 
  6.5   determining eligibility and issuing enrollment cards to eligible 
  6.6   individuals and shall undertake outreach efforts to build public 
  6.7   awareness of the program and maximize enrollment of eligible 
  6.8   individuals.  The commissioner may adjust the requirements and 
  6.9   terms of the program to accommodate any new federally funded 
  6.10  prescription drug programs. 
  6.11     Subd. 10.  [CONTRACTING.] The commissioner of 
  6.12  administration may contract with one or more third parties to 
  6.13  administer any or all components of the prescription drug access 
  6.14  program, including, but not limited to, outreach, eligibility, 
  6.15  claims, administration, and rebate recovery and redistribution. 
  6.16     Subd. 11.  [COORDINATING ASSISTANCE PROGRAMS.] The 
  6.17  commissioner of administration, in cooperation with the 
  6.18  commissioner of human services, shall administer the 
  6.19  prescription drug access program and other medical and 
  6.20  pharmaceutical assistance programs in a manner that is 
  6.21  advantageous to the programs and to the enrollees in those 
  6.22  programs.  In implementing this subdivision, the commissioner of 
  6.23  administration may coordinate the other programs and this 
  6.24  program and may take actions to enhance efficiency, reduce the 
  6.25  cost of prescription drugs, and maximize the benefits to the 
  6.26  programs and enrollees, including providing the benefits of this 
  6.27  program to enrollees in other programs.  
  6.28     Subd. 12.  [RULEMAKING.] The commissioner of administration 
  6.29  may adopt rules to implement this section. 
  6.30     Subd. 13.  [WAIVERS.] The commissioner of administration 
  6.31  may seek any waivers of federal law, rule, or regulation 
  6.32  necessary to implement this section.