Bill As Introduced S.288

1 BILL AS INTRODUCED S.288 2 2004 Page 1 3 4 1 S.2882 Introduced by Senator Leddy of Chittenden County, Senator Condos of 3 Chittenden County, Senator Gossens of Addison County, 4 Senator Lyons of Chittenden County and Senator Welch of 5 Windsor County6 Referred to Committee on 7 Date: 8 Subject: Prescription drugs; programs and practices9 Statement of purpose: This bill proposes to (1) require disclosure of retail drug10 prices; (2) include over-the-counter drugs on the state’s PDL; (3) amend the 11 Healthy Vermonters prescription drug program; (4) provide the office of the 12 attorney general with investigative power under the disclosure laws applicable 13 to pharmaceutical marketers; (5) require the licensing of PBMs; (6) require the 14 commissioner of personnel to use the state’s preferred drug list in the state 15 employees’ health benefit plan; (7) study and report on expanded access to the 16 340B federal drug pricing program; (8) study and report on savings generated 17 from purchasing generic rather than brand-name drugs in state drug assistance 18 programs and in private plans; and (9) require an audit of state contracts with 19 PBMs as they concern the payment of supplemental rebates.5 www.leg.state.vt.us 1 BILL AS INTRODUCED S.288 2 2004 Page 2 3 4 1 AN ACT RELATING TO STATE PROGRAMS AND POLICIES ON 2 PRESCRIPTION DRUGS3 It is hereby enacted by the General Assembly of the State of Vermont: 4 * * * Retail Drug Price Disclosure * * *5 Sec. 1. 33 V.S.A. § 2007 is added to read:6 § 2007. RETAIL DRUG PRICE DISCLOSURE7 With each prescription dispensed, the pharmacist shall disclose to the 8 patient, in writing, the usual and customary price of the prescription and the 9 cost of any payment toward the price required of the patient.10 Sec. 2. EFFECTIVE DATE 11 Sec. 1 of this act shall take effect July 1, 2004 and apply to a pharmacy on 12 the date thereafter on which the pharmacy updates its computer software 13 program with regard to prescription drug price and patient payment, but in no 14 event later than January 1, 2006.15 * * * Over-the-Counter Drug Coverage * * *16 Sec. 3. 33 V.S.A. § 1992a is added to read:17 § 1992a. OVER-THE-COUNTER DRUG COVERAGE18 All public pharmaceutical assistance programs shall provide coverage for 19 over-the-counter drugs on the preferred drug list developed under section 1998 20 of this title.5 www.leg.state.vt.us 1 BILL AS INTRODUCED S.288 2 2004 Page 3 3 4 1 * * * Healthy Vermonters (Maine Rx Plus) * * *2 Sec. 4. 33 V.S.A. § 2003 is amended to read:3 § 2003. PHARMACY DISCOUNT PLAN4 (a) On or before July 1, 2002, the The commissioner shall implement a 5 pharmacy discount plan, to be known as the “Healthy Vermonters” program, 6 for Vermonters without adequate coverage for prescription drugs. The 7 provisions of section 1992 of this title shall apply to the commissioner’s 8 authority to administer the pharmacy discount plan established by this section. 9 The commissioner may establish an enrollment fee in such amount as is 10 necessary to support the administrative costs of the plan.11 (b) The pharmacy discount plan authorized by this section shall include a 12 program implemented as a Section 1115 Medicaid waiver, wherein the state 13 makes a payment toward the cost of the drugs dispensed to individuals enrolled14 in this program of at least two percent of the cost of each prescription or refill, 15 consistent with the appropriation for the program established by this section.16 (c) The commissioner shall implement the pharmacy discount program 17 authorized by this section without any financial contribution by the state 18 otherwise required by subsection (b) of this section, and without federal waiver19 approval during such time as federal waiver approval has not been secured.5 www.leg.state.vt.us 1 BILL AS INTRODUCED S.288 2 2004 Page 4 3 4 1 (d) As used in this section:2 (1) “Eligible beneficiary” means any individual Vermont resident 3 without adequate coverage :4 (A) who is at least 65 years of age, or is disabled and is eligible for 5 Medicare or Social Security disability benefits, with household income equal 6 to or less than 400 percent of the federal poverty level, as calculated under the 7 rules of the Vermont health access plan, as amended, and any other individual 8 Vermont resident with; 9 (B) whose household income is equal to or less than 300 350 percent 10 of the federal poverty level, as calculated under the rules of the Vermont health11 access plan, as amended; and;12 (C) whose family incurs unreimbursed expenses for prescription 13 drugs that equal five percent or more of family income or whose total 14 unreimbursed medical expenses equal 15 percent or more of family income.15 (2) “Initial discounted cost” means the price of the drug based on the 16 Medicaid fee schedule.17 (3) “Labeler” means an entity or person that receives prescription drugs 18 from a manufacturer or wholesaler and repackages those drugs for later retail 19 sale and that has a labeler code from the federal Food and Drug Administration20 under 21 Code of Federal Regulations, 207.20 (1999).5 www.leg.state.vt.us 1 BILL AS INTRODUCED S.288 2 2004 Page 5 3 4 1 (4) “Participating retail pharmacy” means a retail pharmacy located in 2 this state or another business licensed to dispense prescription drugs in this 3 state that participates in the program according to rules established by the 4 department and provides discounted prices to eligible beneficiaries of the 5 program.6 (5) “Secondary discounted cost” means the price of the drug based on 7 the Medicaid fee schedule, less payment by the state of at least two percent of 8 the Medicaid rate, less the average rebate percentage paid to the Medicaid 9 program by pharmaceutical manufacturers for the prior state fiscal year, as 10 determined by the commissioner.11 (6) “Vermonter without Without adequate coverage” includes eligible 12 beneficiaries with no coverage for prescription drugs, and eligible beneficiaries13 whose annual maximum coverage limit under their health benefit plan has been14 reached.15 (e) Drugs covered by the Healthy Vermonters program shall include only 16 drugs that are on the Medicaid preferred drug list as established and revised 17 from time to time by the department.18 (f) Beginning January 1, 2005, a participating retail pharmacy shall offer 19 beneficiaries the initial discounted price. No later than October 1, 2005, a 20 participating retail pharmacy shall offer beneficiaries the secondary discounted21 price, if available.5 www.leg.state.vt.us 1 BILL AS INTRODUCED S.288 2 2004 Page 6 3 4 1 (g) The Vermont board of pharmacy shall adopt rules requiring disclosure 2 by participating retail pharmacies to eligible beneficiaries of the amount of 3 savings provided as a result of the program. The rules must consider and 4 protect information that is proprietary in nature. The department may not 5 impose transaction charges under this program on pharmacies that submit 6 claims or receive payments under the program. Pharmacies shall submit 7 claims to the department to verify the amount charged to eligible beneficiaries 8 under the program. On a weekly or biweekly basis, the department must 9 reimburse pharmacies for the difference between the initial discounted price 10 and the secondary discounted price provided to eligible beneficiaries.11 (h) The names of drug manufacturers and labelers who do and do not enter 12 into rebate agreements under this program are public information. The 13 department shall release this information to health care providers and the 14 public on a regular basis and shall publicize participation by manufacturers and15 labelers. The department shall impose prior authorization requirements in the 16 Medicaid program, as permitted by law, to the extent the department 17 determines it is appropriate to do so in order to encourage manufacturer and 18 labeler participation in the program and so long as the additional prior 19 authorization requirements remain consistent with the goals of the Medicaid 20 program and the requirements of Title XIX of the federal Social Security Act.5 www.leg.state.vt.us 1 BILL AS INTRODUCED S.288 2 2004 Page 7 3 4 1 (i) The commissioner shall establish, by rule, a process to resolve 2 discrepancies in rebate amounts claimed by manufacturers, labelers, 3 pharmacies, and the department.4 (j) Annually, the department shall report the enrollment and financial status5 of the program to the health access oversight committee by September 1, and 6 to the legislature by January 1.7 (k) The department shall undertake outreach efforts to build public 8 awareness of the program and maximize enrollment. The department may 9 adjust the requirements and terms of the program to accommodate any new 10 federally funded prescription drug programs.11 (l) The department may contract with a third party or third parties to 12 administer any or all components of the program, including outreach, 13 eligibility, claims, administration, and rebate recovery and redistribution.14 (m) The department shall administer the program and other medical and 15 pharmaceutical assistance programs under this title in a manner advantageous 16 to the programs and enrollees. In implementing this section, the department 17 may coordinate the other programs and this program and may take actions to 18 enhance efficiency, reduce the cost of prescription drugs, and maximize 19 benefits to the programs and enrollees, including providing the benefits of this 20 program to enrollees in other programs.5 www.leg.state.vt.us 1 BILL AS INTRODUCED S.288 2 2004 Page 8 3 4 1 (n) The department may adopt rules to implement the provisions of this 2 section.3 (o) The department may seek any waivers of federal law, rule, or regulation4 necessary to implement the provisions of this section.5 Sec. 5. EFFECTIVE DATE6 Sec. 4 of this act shall take effect July 1, 2004, except that subsection 7 2003(h) of Title 33, requiring public disclosure of manufacturers and labelers 8 entering into rebate agreements and certain prior authorization requirements 9 under Medicaid, shall take effect on the date the department begins offering 10 prescription drug benefits under the program.11 * * * Attorney General Investigative Power * * *12 Sec. 6. 33 V.S.A. § 2005(b) is amended to read:13 (b) The attorney general may bring an action in Washington superior court 14 for injunctive relief, costs, and attorneys fees, and to impose on a 15 pharmaceutical manufacturing company that fails to disclose as required by 16 subsection (a) of this section a civil penalty of no more than $10,000.00 per 17 violation. Each unlawful failure to disclose shall constitute a separate 18 violation. The attorney general may issue civil investigative demands and 19 otherwise investigate alleged violations of subsection (a) of this section 20 pursuant to 9 V.S.A. § 2460.5 www.leg.state.vt.us 1 BILL AS INTRODUCED S.288 2 2004 Page 9 3 4 1 * * * PBM Licensing * * *2 Sec. 7. 18 V.S.A. chapter 221, subchapter 9 is added to read:3 Subchapter 9. Pharmacy Benefit Managers4 § 9471. DEFINITIONS5 As used in this subchapter:6 (1) “Beneficiary” means an individual who has been enrolled in a health7 insurance plan in which coverage of prescription drugs is administered by a 8 pharmacy benefit manager.9 (2) “Commissioner” means the commissioner of banking, insurance, 10 securities, and health care administration.11 (3) “Health insurance plan” means a health benefit plan offered, 12 administered, or issued by a health insurer doing business in Vermont.13 (4) “Health insurer” is defined by subdivision 9402(7) of this title. The 14 term includes:15 (A) The state of Vermont and any agent or instrumentality of the 16 state that offers, administers, or provides financial support to state government 17 employees.18 (B) Medicaid, the Vermont health access plan, the VScript 19 pharmaceutical assistance program, and any other public health care assistance 20 program.5 www.leg.state.vt.us 1 BILL AS INTRODUCED S.288 2 2004 Page 10 3 4 1 (C) To the extent permitted by federal law, any self-insured health 2 benefit plan that offers health care coverage to Vermont beneficiaries.3 (5) “Pharmacy benefit management plan” means an arrangement for the 4 delivery of prescription services in which a pharmacy benefit manager 5 undertakes to provide, arrange for, pay for, or reimburse any of the costs of 6 prescription services for a beneficiary.7 (6) “Pharmacy benefits manager” means a business that administers the 8 prescription drug or device portion of health insurance plans through a 9 pharmacy benefit management plan on behalf of a health insurance plan.10 § 9472. PHARMACY BENEFIT MANAGER; LICENSE REQUIRED11 (a) No person shall act as a pharmacy benefit manager or administer a 12 pharmacy benefit management plan in this state without obtaining an annual 13 license from the commissioner.14 (b) The commissioner may suspend or revoke any license issued to a 15 pharmacy benefit manager under this subchapter or deny an application for a 16 license if the commissioner finds that the pharmacy benefit manager or any 17 officer, employee, or agent of the pharmacy benefit manager has failed to 18 satisfy any of the following requirements. A pharmacy benefit manager shall:19 (1) Fulfill its fiduciary obligations to health insurance plans and health 20 insurance plan beneficiaries in accordance with the provisions of section 9473 21 of this title.5 www.leg.state.vt.us 1 BILL AS INTRODUCED S.288 2 2004 Page 11 3 4 1 (2) File an annual disclosure statement and secure prior approval of 2 contracts in accordance with the provisions of section 9474 of this title.3 (3) Pay all fees, taxes, and charges required by law.4 (4) File a financial statement or statements and any reports, certificates, 5 or other documents the commissioner considers necessary to secure a full and 6 accurate knowledge of its affairs and financial condition.7 (5) Remain solvent, and its financial condition, method of operation, and8 manner of doing business shall remain such as to satisfy the commissioner that 9 it can meet its obligations to health insurance plans and all beneficiaries.10 (6) Comply with all the requirements of law, the provisions of this 11 subchapter, and the rules adopted pursuant to this subchapter.12 (c) A nonrefundable license application fee of $500.00 shall accompany 13 each application for a license to transact business in this state. The fee shall be14 collected by the commissioner and paid directly into the pharmacy benefit 15 management regulation special fund established and administered under 16 subchapter 5 of chapter 7 of Title 32 for the purpose of defraying expenses for 17 the regulation, supervision, and examination of all entities subject to regulation18 under this subchapter.19 (d) The license required by this section shall be signed by the 20 commissioner or a duly authorized agent of the commissioner and shall expire 21 on the next June 30 after the date on which it becomes effective.5 www.leg.state.vt.us 1 BILL AS INTRODUCED S.288 2 2004 Page 12 3 4 1 (e) All pharmacy benefit managers offering or providing pharmacy benefit 2 management plans shall obtain an annual renewal of their license from the 3 commissioner. The commissioner may refuse to renew the license of any 4 pharmacy benefit manager or may renew the license, subject to any conditions 5 or restrictions deemed by the commissioner to be needed to carry out the 6 purposes of this subchapter, if the commissioner finds that the pharmacy 7 benefit manager has violated any of the requirements for licensure established 8 in subsection (b) of this section. The commissioner shall not fail to renew the 9 license of any pharmacy benefit manager without giving the pharmacy benefit 10 manager notice and an opportunity to be heard in accordance with the 11 provisions of 3 V.S.A. chapter 25 (Administrative Procedure Act).12 (f) The commissioner may adopt such rules as are necessary to carry out 13 the purposes of this subchapter.14 § 9473. FIDUCIARY OBLIGATIONS OF PHARMACY BENEFIT15 MANAGERS16 A pharmacy benefit manager shall at all times discharge its obligations to 17 health insurance plans and health insurance plan beneficiaries in compliance 18 with the standards of conduct applicable to a “fiduciary” under the Employee 19 Retirement Income Security Act of 1974. In so doing, a pharmacy benefit 20 manager shall:5 www.leg.state.vt.us 1 BILL AS INTRODUCED S.288 2 2004 Page 13 3 4 1 (1) Discharge its duties with respect to health insurance plans and health2 insurance plan beneficiaries solely in the interest of such plans and 3 beneficiaries, and for the exclusive purpose of providing benefits to such plans 4 and beneficiaries and defraying reasonable expenses of administering health 5 insurance plan and health insurance plan beneficiary benefits. 6 (2) Discharge its duties with the care, skill, prudence, and diligence 7 under the circumstances then prevailing that a prudent fiduciary acting in like 8 capacity and familiar with such matters would use in the conduct of an 9 enterprise of a like character and with like aims.10 (3) Discharge its duties in accordance with the contract governing the 11 health insurance plan prescription drug coverage, insofar as such contract is 12 consistent with the provisions of this law and of the Employee Retirement 13 Income Security Act of 1974.14 (4) Provide any and all information requested by health insurance plans 15 so as to ensure that such plans are able to ascertain all material activities being 16 undertaken on their behalf or on behalf of health insurance plan beneficiaries.17 (5) Notify health insurance plans in writing of any proposed or ongoing 18 activity that involves, directly or indirectly, any conflict of interest as 19 contemplated by the standards applicable to a “fiduciary” under the Employee 20 Retirement Income Security Act of 1974.5 www.leg.state.vt.us 1 BILL AS INTRODUCED S.288 2 2004 Page 14 3 4 1 § 9474. ANNUAL STATEME NT; PRIOR APPROVAL OF CONTRACTS2 (a) Each pharmacy benefit manager providing pharmacy benefit 3 management plans in this state shall file a statement with each health insurance4 plan and with the commissioner annually by March 1. The statement shall be 5 verified by at least two principal officers and shall cover the preceding 6 calendar year. The annual statement shall be on forms prescribed by the 7 commissioner, and shall include:8 (1) A financial statement of the organization, including its balance sheet 9 and income statement for the preceding year.10 (2) The number of persons enrolled during the year, the number of 11 enrollees as of the end of the year, and the number of enrollments terminated 12 during the year.13 (3) Any other information relating to the operations of the pharmacy 14 benefit manager required by the commissioner pursuant to this subchapter.15 (b) A pharmacy benefit manager shall not enter into a contract with a health16 insurance plan unless the commissioner first determines, upon application by 17 the pharmacy benefit manager on a form and in a manner approved by the 18 commissioner, that the pharmacy benefit manager has disclosed to the health 19 insurance plan any of the following agreements and practices, and that the 20 commissioner has determined that the contract and any such agreement and 21 practice promotes the medical and financial interests of the health insurance 5 www.leg.state.vt.us 1 BILL AS INTRODUCED S.288 2 2004 Page 15 3 4 1 plan and the beneficiaries of the health insurance plan. The pharmacy benefit 2 manager shall disclose:3 (1) Any agreement with a pharmaceutical manufacturer to favor the 4 manufacturer’s products over a competitor’s products, or to place the 5 manufacturer’s drug on the pharmacy benefit manager’s preferred list or 6 formulary, or to switch the drug prescribed by the patient’s health care 7 provider with a drug agreed to by the pharmacy benefit manager and the 8 manufacturer.9 (2) Any agreement with a pharmaceutical manufacturer to share 10 manufacturer rebates and discounts with the pharmacy benefit manager, or to 11 pay “soft money” or other economic benefits to the pharmacy benefit manager.12 (3) Any agreement or practice to bill Vermont health benefit plans for 13 prescription drugs at a cost higher than the pharmacy benefit manager pays the 14 pharmacy.15 (4) Any agreement to share revenue with a mail order or internet 16 pharmacy company.17 (5) Any agreement to sell prescription drug data concerning Vermont 18 beneficiaries, or data concerning the prescribing practices of the health care 19 providers of Vermont beneficiaries.20 (6) Any corporate or other organizational or governing affiliation 21 between the pharmacy benefit manager and a pharmaceutical manufacturer.5 www.leg.state.vt.us 1 BILL AS INTRODUCED S.288 2 2004 Page 16 3 4 1 (7) Any other agreement of the pharmacy benefit manager with a 2 pharmaceutical manufacturer, or with wholesale and retail pharmacies, 3 affecting the cost of pharmacy benefits provided to Vermont beneficiaries. 4 (c) A contract filed under this section shall be deemed approved unless the 5 commissioner disapproves such contract within 30 days after filing with the 6 commissioner. Disapproval shall be in writing, stating the reasons therefor and7 a copy thereof delivered to the pharmacy benefit manager.8 § 9475. ASSESSMENT9 (a) The expenses of administering this subchapter, including the cost 10 incurred by the commissioner, shall be assessed annually by the commissioner 11 against all pharmacy benefit managers operating in this state. Before 12 determining the assessment, the commissioner shall provide an estimate of all 13 expenses for the regulation, supervision, and examination of all entities subject14 to regulation under this chapter. The assessment shall be in proportion to the 15 business done in this state.16 (b) All fees and assessments under this subchapter and paid to the 17 commissioner shall be deposited in the pharmacy benefit management 18 regulation special fund established and administered under subchapter 5 of 19 chapter 7 of Title 32 for the purpose of defraying the expenses for the 20 regulation, supervision, and examination of all entities subject to regulation 21 under this subchapter.5 www.leg.state.vt.us 1 BILL AS INTRODUCED S.288 2 2004 Page 17 3 4 1 (c) The commissioner shall give each pharmacy benefit manager notice of 2 the assessment, which shall be paid to the department annually on or before 3 March 1. Any pharmacy benefit manager that fails to pay the assessment on or4 before the date prescribed in this subsection shall be subject to a penalty 5 imposed by the commissioner. The penalty shall be ten percent of the 6 assessment and interest for the period between the due date and the date of full 7 payment. If a payment is made in an amount later found to be in error, the 8 commissioner shall:9 (1) If an additional amount is due, notify the company of the additional 10 amount and the company shall pay the additional amount within 14 days of the11 date of the notice.12 (2) If an overpayment is made, order a refund.13 (d) If an assessment made under this subchapter is not paid to the 14 commissioner by the prescribed date, the amount of the assessment, penalty, 15 and interest may be recovered from the defaulting company on motion of the 16 commissioner made in the name and for the use of the state in the appropriate 17 superior court after ten days’ notice to the company. The license of any 18 defaulting pharmacy benefit manager to transact business in this state may be 19 revoked or suspended by the commissioner until the manager has paid such 20 assessment.5 www.leg.state.vt.us 1 BILL AS INTRODUCED S.288 2 2004 Page 18 3 4 1 § 9476. ENFORCEMENT2 In addition to any other remedy provided by law, a health insurance plan or 3 a plan beneficiary aggrieved by a violation of this subchapter or a rule adopted 4 under this subchapter may file an action in superior court for injunctive relief 5 and an award of compensatory and punitive damages. The superior court may 6 award to the health insurance plan or plan beneficiary who prevails in an action7 under this section reasonable costs and attorney’s fees.8 * * * Joint Purchasing within Vermont * * *9 Sec. 8. 33 V.S.A. § 1998 is amended to read:10 § 1998. PHARMACY BEST PRACTICES AND COST CONTROL 11 PROGRAM ESTABLISHED12 (a) The commissioner of prevention, assistance, transition, and health 13 access shall establish a pharmacy best practices and cost control program 14 designed to reduce the cost of providing prescription drugs, while maintaining 15 high quality in prescription drug therapies. The program shall include:16 (1) A preferred list of covered prescription drugs that identifies 17 preferred choices within therapeutic classes for particular diseases and 18 conditions, including generic alternatives and over-the-counter drugs.19 (A) The commissioner, and the commissioner of banking, insurance, 20 securities, and health care administration shall implement the preferred drug 5 www.leg.state.vt.us 1 BILL AS INTRODUCED S.288 2 2004 Page 19 3 4 1 list as a uniform, statewide preferred drug list by encouraging all health benefit2 plans in this state to participate in the program.3 (B) The commissioner of personnel shall use the preferred drug list in4 the state employees health benefit plan only if participation in the program will5 provide economic and health benefits to the state employees health benefit plan6 and to beneficiaries of the plan, and only if agreed to through the bargaining 7 process between the state of Vermont and the authorized representatives of the 8 employees of the state of Vermont. The provisions of this subdivision do not 9 authorize the actuarial pooling of the state employees health benefit plan with 10 any other health benefit plan, unless otherwise agreed to through the 11 bargaining process between the state of Vermont and the authorized 12 representatives of the employees of the state of Vermont.13 * * *14 * * * Expanding Use of 340B Programs * * *15 Sec. 9. 33 V.S.A. § 2008 is added to read:16 § 2008. FEDERAL DISCOUNT PROGRAMS; STUDY17 The commissioner shall study and by January 1, 2005 report to the 18 governor, the senate and house committees on health and welfare, and the 19 health access oversight committee on the feasibility of providing discounted 20 prescription drugs to Vermont’s most vulnerable patient populations through 21 the use of Section 340B of the federal Public Health Service Act, 42 United 5 www.leg.state.vt.us 1 BILL AS INTRODUCED S.288 2 2004 Page 20 3 4 1 States Code, Section 256b (1999). The commissioner shall work with other 2 state agencies, representatives of state employees, and representatives of health3 care providers and facilities in the state to provide the following information:4 (1) A description of all health care providers and facilities in the state 5 potentially eligible for designation as “covered entities” under Section 340B, 6 including without limitation all hospitals eligible as disproportionate share 7 hospitals; recipients of grants from the United States Public Health Service; 8 federally qualified health centers; federally qualified look-alikes; 9 state - operated AIDS drug assistance programs; Ryan White CARE Act Title I, 10 Title II, and Title III programs; tuberculosis, black lung, family planning, and 11 sexually transmitted disease clinics; hemophilia treatment centers; public 12 housing primary care clinics; and clinics for homeless people.13 (2) A listing of potential applications of Section 340B and the potential 14 benefits to public, private, and third-party payors for prescription drugs, 15 including:16 (A) application to inmates and employees in youth correctional 17 facilities, county jails, and state prisons;18 (B) maximizing the use of Section 340B within state-funded 19 managed care plans;20 (C) including Section 340B providers in state bulk purchasing 21 initiatives; and5 www.leg.state.vt.us 1 BILL AS INTRODUCED S.288 2 2004 Page 21 3 4 1 (D) using sole source contracts with Section 340B providers to 2 furnish high-cost chronic care drugs.3 (3) Discounts available through Section 340B contracts, including 4 estimated cost savings to the state as a result of retail mark-up avoidance, 5 negotiated subceiling prices, and coordination with the Medicaid program in 6 order to minimize costs to the program and to other purchasers of prescription 7 drugs.8 (4) The resources available to potential applicants for designation as 9 covered entities for the application process, establishing a Section 340B 10 program, restructuring the health care system, or other methods of lowering the11 cost of prescription drugs. The resources must include state and federal 12 agencies and private philanthropic grants to be used for the purposes of this 13 section.14 * * * Study on Savings * * *15 Sec. 10. REPORT ON PRESCRIPTION DRUG SAVINGS16 The commissioner of prevention, assistance, transition, and health access 17 shall conduct a study to demonstrate any savings achieved through the use of 18 generic instead of brand-name drugs in state and, to the extent possible, private19 drug assistance plans. The findings of the study shall be reported to the health 20 access oversight committee and the senate and house committees on health and21 welfare by January 1, 2005.5 www.leg.state.vt.us 1 BILL AS INTRODUCED S.288 2 2004 Page 22 3 4 1 * * * Auditing PBM Contracts * * *2 Sec. 11. AUDITING PBM CONTRACTS3 The commissioner of prevention, assistance, transition, and health access 4 and the commissioner of personnel, in consultation with the commissioner of 5 banking, insurance, securities, and health care administration and the state 6 auditor, shall develop a pharmacy benefits manager audit plan. The purpose of7 the audit plan is to ensure that pharmacy claims and rebates are being paid 8 accurately and appropriately. Accordingly, the audit shall include a 9 performance audit, contract compliance audit, rebate audit, and pharmacy 10 claims analysis and audit. The audit plan shall include a cost estimate for 11 hiring an independent auditor, options for keeping the cost of the audit down, 12 for example, by partnering with other health benefit plans within or outside the13 state, as well as recommendations regarding possible revenue sources to cover 14 the cost of implementing the audit plan. The audit plan shall be detailed in a 15 report submitted to the health access oversight committee and the senate and 16 house committees on health and welfare by September 1, 2004.5 www.leg.state.vt.us

Bill As Introduced S.288

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