HB 458: "An Act relating to negotiated discounts or rebates for prescription drugs; establishing a prescription drug card program to provide discounts for prescription drugs; and providing for an effective date."
00 HOUSE BILL NO. 458 01 "An Act relating to negotiated discounts or rebates for prescription drugs; establishing 02 a prescription drug card program to provide discounts for prescription drugs; and 03 providing for an effective date." 04 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 05 * Section 1. The uncodified law of the State of Alaska is amended by adding a new section 06 to read: 07 FINDINGS AND PURPOSE. (a) The legislature finds that 08 (1) many uninsured and underinsured residents require repeated doctor or 09 medical clinic appointments and have become sicker because they cannot afford to take the 10 drugs prescribed for them; many are admitted to or treated at hospitals each year because they 11 cannot afford the drugs prescribed for them that could have prevented the need for 12 hospitalization; others enter expensive institutional care settings because they cannot afford 13 the prescription drugs that could have supported them outside of an institution; in each of 14 these circumstances, uninsured and underinsured residents too often become medical
01 assistance recipients because of their inability to afford prescription drugs; therefore, helping 02 to secure lower drug prices for the uninsured and underinsured directly benefits and supports 03 medical assistance; and 04 (2) state government is the only entity that, as a practical matter, can play an 05 effective role as a market participant on behalf of all residents who are uninsured or 06 underinsured or are medical assistance beneficiaries; the state already provides drugs and acts 07 as a prescription benefits manager for a variety of programs and should expand that role to 08 negotiate voluntary drug rebates and, subject to appropriation, use the rebates to maintain and 09 expand medical assistance services while offering lower drug prices to the underinsured and 10 the uninsured who do not qualify for medical assistance. 11 (b) Recognizing that the state already acts as a prescription benefits manager for a 12 variety of health plans and assistance programs, the purpose of this Act is to cover new 13 populations by expanding the state's role as a participant in the prescription drug marketplace, 14 negotiating voluntary rebates from drug companies, and, subject to appropriation, using the 15 rebates to make prescription drugs more affordable to the medical assistance program and to 16 state residents. This program will improve public health and welfare, promote the economic 17 strength of the state's communities, and directly and indirectly benefit the medical assistance 18 program. 19 * Sec. 2. AS 17 is amended by adding a new chapter to read: 20 Chapter 25. Alaska Prescription Drug Program. 21 Sec. 17.25.010. Alaska prescription drug program. (a) There is established 22 in the Department of Health and Social Services the Alaska prescription drug program. 23 The purpose of the program is to 24 (1) purchase prescription drugs at discount prices; 25 (2) reimburse participating pharmacies for prescription drug rebates 26 obtained; 27 (3) increase the availability of prescription drugs at the lowest possible 28 cost to program participants; and 29 (4) maintain a list of prescription drugs recommended as the most 30 effective prescription drug available at the lowest price. 31 (b) The commissioner shall appoint an administrator of the program. The
01 administrator may contract with a qualified nonprofit entity to the extent necessary to 02 assist with negotiations with prescription drug manufacturers. In addition, the 03 administrator shall 04 (1) negotiate price discounts and rebates on prescription drugs with 05 prescription drug manufacturers; 06 (2) contract with prescription drug wholesalers and retail pharmacies 07 to deliver discounted prices to Alaska prescription drug card holders; 08 (3) purchase prescription drugs on behalf of individuals and entities 09 that participate in the program; 10 (4) contract with a prescription drug claims processor to adjudicate 11 participating pharmacy claims and to transmit program prices to participating 12 pharmacies; 13 (5) determine program prices; 14 (6) reimburse participating pharmacies for rebates due under the 15 program; 16 (7) implement the preferred drug list for the program; 17 (8) develop a system for allocating and distributing operational costs 18 and rebates from the program to program participants; 19 (9) cooperate with other states and regional consortia to make bulk 20 purchases of prescription drugs; 21 (10) establish and implement a mechanism to calculate and timely 22 transmit the program prices for prescription drugs to a participating pharmacy; 23 (11) recommend for adoption by the commissioner terms and 24 conditions for a participating pharmacy to enroll in the program. 25 (c) The administrator of the program may not contract with a participating 26 pharmacy benefits manager, establish a state managed wholesale or retail drug 27 distribution or dispensing system, or require a participating pharmacy to maintain or 28 allocate separate inventories for prescription drugs dispensed under the program. 29 (d) Reimbursement rates and prescription drug prices may be different for a 30 rural area and an urban area if the difference is necessary to maintain statewide access 31 to the program.
01 (e) The commissioner shall adopt regulations necessary to carry out the 02 purposes of the program. 03 Sec. 17.25.020. Application; eligibility. The department shall establish an 04 annual application procedure and a nominal fee for participation in the program 05 established under AS 17.25.010. An applicant must be 06 (1) a state or local government agency that directly or indirectly 07 purchases prescription drugs; 08 (2) a facility operated by the state that dispenses prescription drugs; 09 (3) a private entity; 10 (4) a labor organization; or 11 (5) an uninsured resident of the state who has not been covered under a 12 prescription drug benefit program for at least six months before filing an application. 13 Sec. 17.25.030. Alaska prescription drug card. (a) The department shall 14 issue a prescription drug card annually to participants in the Alaska prescription drug 15 program. Presentation of a current prescription drug card issued under this section 16 entitles the participant to purchase prescription drugs at the price of prescription drugs 17 established under the program plus a professional dispensing fee set by the 18 department. 19 (b) A card issued under this section must contain information necessary to 20 process a claim and to transmit pricing data. 21 Sec. 17.25.035. Preferred drug list. The commissioner shall develop, in 22 cooperation with the state Board of Pharmacy, a preferred drug list that identifies 23 preferred choices of prescription drugs within therapeutic classes for particular 24 diseases and conditions, including generic alternatives, for use in the program 25 established under this chapter. The commissioner shall conduct public hearings and 26 use evidence-based evaluations on the effectiveness of similar prescription drugs to 27 develop the drug list. 28 Sec. 17.25.300. Definitions. In this chapter, 29 (1) "commissioner" means the commissioner of health and social 30 services; 31 (2) "department" means the Department of Health and Social Services;
01 (3) "manufacturer" means a manufacturer of prescription drugs, as 02 defined in 42 U.S.C. 1396r-8, including a subsidiary or affiliate of a manufacturer; 03 (4) "participating pharmacy" means a retail pharmacy or other business 04 licensed to dispense prescription drugs in this state that 05 (A) participates in the state medical assistance program; or 06 (B) voluntarily agrees to participate in the Alaska prescription 07 drug program. 08 * Sec. 3. AS 37.05.146(c) is amended by adding a new paragraph to read: 09 (81) receipts of the Alaska prescription drug program under 10 AS 17.25.010. 11 * Sec. 4. The uncodified law of the State of Alaska is amended by adding a new section to 12 read: 13 TRANSITION: REGULATIONS. The commissioner of health and social services 14 may proceed immediately to adopt regulations necessary to carry out the purposes of this Act, 15 including procedures for issuing prescription drug cards under AS 17.25.030, added by sec. 2 16 of this Act, and for enrolling participating pharmacies in the Alaska prescription drug 17 program. The regulations may not take effect until the effective date of this section. 18 * Sec. 5. The uncodified law of the State of Alaska is amended by adding a new section to 19 read: 20 ALASKA PRESCRIPTION DRUG PROGRAM; REPORT. The Department of 21 Health and Social Services shall, not later than January 1, 2007, report to the Joint Health and 22 Social Services Committee the preparations taken by the department to implement the Alaska 23 prescription drug program established under AS 17.25.010 - 17.25.300, added by sec. 2 of this 24 Act. The report must include 25 (1) the number of individuals and entities that the department expects to enroll 26 in the program; 27 (2) the number of persons for whom the department expects to purchase 28 prescription drugs; 29 (3) how the department expects the program to affect prescription drug prices 30 for participants in the programs; 31 (4) the regulations proposed or adopted by the department to implement the
01 program; 02 (5) the feasibility and advisability of expanding the program; and 03 (6) a plan to expand the program if the department determines that expansion 04 is feasible and advisable. 05 * Sec. 6. Sections 2 and 3 of this Act take effect May 31, 2007. 06 * Sec. 7. Except as provided in sec. 6 of this Act, this Act takes effect immediately under 07 AS 01.10.070(c).