Text: HF203            Text: HF205
Complete Bill History


House File 204

HOUSE FILE BY FORD Passed House, Date Passed Senate, Date Vote: Ayes Nays Vote: Ayes Nays Approved A BILL FOR 1 An Act relating to fair market drug pricing including the 2 establishment of a prescription card program. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 2035HH 82 5 pf/cf/24 PAG LIN 1 1 Section 1. FAIR MARKET DRUG PRICING == LEGISLATIVE 1 2 FINDINGS. The general assembly finds that: 1 3 1. In this time of economic difficulty, the state of Iowa 1 4 needs to maximize its financial resources in order to provide 1 5 the maximum amount of health care coverage possible for low= 1 6 income residents. Now more than ever, the state of Iowa needs 1 7 to lower the prices it pays for prescription drugs. 1 8 2. Many Iowans are uninsured or underinsured for 1 9 prescription drug coverage and do not qualify for medical 1 10 assistance. These uninsured or underinsured Iowans pay 1 11 excessive prices for prescription drugs. In many cases, these 1 12 excessive drug prices have the effect of denying Iowans access 1 13 to medically necessary care, thereby threatening their health 1 14 and safety. 1 15 3. Among these uninsured and underinsured Iowans, many 1 16 require repeated doctor or medical clinic appointments, with 1 17 their health having degenerated because they cannot afford the 1 18 drugs prescribed for them. Many are admitted to or treated at 1 19 hospitals each year because they cannot afford the drugs 1 20 prescribed for them that could have prevented the need for 1 21 hospitalization. Many others enter expensive institutional 1 22 care settings because they cannot afford the prescription 1 23 drugs that could have supported them outside of an 1 24 institution. In each of these circumstances, uninsured and 1 25 underinsured Iowans too often become medical assistance 1 26 recipients because of their inability to afford prescription 1 27 drugs. Therefore, helping secure lower drug prices for 1 28 uninsured and underinsured Iowans directly benefits and 1 29 supports the medical assistance program. 1 30 4. The state is the only agent that, as a practical 1 31 matter, can play an effective role as a market participant on 1 32 behalf of all Iowans who are uninsured, underinsured, or are 1 33 medical assistance program beneficiaries. The state already 1 34 provides drugs and acts as a prescription benefits manager for 1 35 a variety of programs, and should expand that role to 2 1 negotiate voluntary drug rebates, using these funds to 2 2 maintain and expand medical assistance services while offering 2 3 lower drug prices to the uninsured and underinsured who do not 2 4 qualify for medical assistance. 2 5 Sec. 2. NEW SECTION. 249A.36 FAIR MARKET DRUG PRICING 2 6 PROGRAM. 2 7 1. PURPOSE. Recognizing that the state already acts as a 2 8 prescription benefits manager for a variety of health plans 2 9 and assistance programs, the purpose of this section is to 2 10 provide prescription drug coverage to new populations by 2 11 expanding the state's role as a participant in the 2 12 prescription drug marketplace, negotiating voluntary rebates 2 13 from drug companies, and using the funds to make prescription 2 14 drugs more affordable to the state medical assistance program 2 15 and to Iowans. Such a program will improve public health and 2 16 welfare, promote the economic strength of our society, and 2 17 both directly and indirectly benefit the state medical 2 18 assistance program. 2 19 2. DEFINITIONS. As used in this section, unless the 2 20 context otherwise requires: 2 21 a. "Federal poverty level" means the federal poverty level 2 22 as defined by the most recently revised poverty income 2 23 guidelines published by the United States department of health 2 24 and human services. 2 25 b. "Labeler" means a person that receives prescription 2 26 drugs from a manufacturer or wholesaler and repackages those 2 27 drugs for later retail sale, and that has a labeler code from 2 28 the federal food and drug administration under 21 C.F.R. } 2 29 207.20. 2 30 c. "Manufacturer" means a manufacturer of prescription 2 31 drugs as defined in 42 U.S.C. } 1396r=8(k)(5), including a 2 32 subsidiary or affiliate of a manufacturer. 2 33 d. "Participating retail pharmacy" means a retail pharmacy 2 34 or other business licensed to dispense prescription drugs in 2 35 this state that participates in the state medical assistance 3 1 program, or voluntarily agrees to participate in the 3 2 prescription card program. 3 3 e. "Wholesaler" means wholesaler as defined in section 3 4 155A.3. 3 5 3. DRUG DISCOUNT AND REBATE AGREEMENTS. 3 6 a. In addition to negotiating rebates with drug 3 7 manufacturers pursuant to section 249A.20A, the director shall 3 8 negotiate other discount prices or rebates for prescription 3 9 drugs from drug manufacturers and labelers for the 3 10 prescription card program and other state programs that pay 3 11 for or acquire prescription drugs. A drug manufacturer or 3 12 labeler that sells prescription drugs in this state may 3 13 voluntarily elect to negotiate any of the following: 3 14 (1) Supplemental rebates for the medical assistance 3 15 program over and above those required under 42 U.S.C. } 1396r= 3 16 8 as provided in section 249A.20A. 3 17 (2) Discount prices or rebates for the prescription card 3 18 program. 3 19 (3) Discount prices or rebates for any other state program 3 20 that pays for or acquires prescription drugs. 3 21 b. In negotiating discount prices and rebate terms, the 3 22 director shall take into consideration the rebate calculated 3 23 under the medical assistance rebate program pursuant to 42 3 24 U.S.C. } 1396r=8, any rebate negotiated pursuant to section 3 25 249A.20A, the price provided to eligible entities under 42 3 26 U.S.C. } 256b, and any other available information on 3 27 prescription drug prices, discounts, and rebates. 3 28 c. (1) The director shall determine whether to include 3 29 the products in the formularies or prior authorization 3 30 programs for any state program that pays for or acquires 3 31 prescription drugs, taking into consideration the following: 3 32 (a) The director and a drug manufacturer or labeler fail 3 33 to reach agreement on the terms of a supplemental rebate under 3 34 the medical assistance program or a discount or rebate for the 3 35 prescription card program. 4 1 (b) The discounts or rebates offered by the manufacturer 4 2 or labeler are not as favorable to the state as the prices 4 3 provided to eligible entities under 42 U.S.C. } 256b. 4 4 (2) The names of manufacturers and labelers that do not 4 5 enter into discount pricing or rebate agreements under this 4 6 section are public information and the department shall 4 7 release this information to the public and actively distribute 4 8 the information to doctors, pharmacists, and other health 4 9 professionals. 4 10 4. PRESCRIPTION CARD PROGRAM ESTABLISHED. 4 11 a. The department shall establish the prescription card 4 12 program as a state pharmaceutical assistance program under 42 4 13 U.S.C. } 1396r=8(c)(1)(C), to provide discounts to 4 14 participants for drugs covered by a rebate agreement. Using 4 15 funds from negotiated rebates, the department shall contract 4 16 with wholesalers and participating retail pharmacies to 4 17 deliver discounted prices to prescription card program 4 18 participants. 4 19 b. The drug discounts received by prescription card 4 20 program participants shall be calculated by the director on a 4 21 quarterly basis. That calculation shall provide discounts 4 22 approximately equal to the average amount of the negotiated 4 23 drug rebate minus an amount to cover the reasonable 4 24 administrative costs of the prescription card program. 4 25 c. (1) An individual is eligible to participate in the 4 26 prescription card program if the individual is a resident of 4 27 Iowa and has a net family income below three hundred fifty 4 28 percent of the federal poverty level. 4 29 (2) An individual is ineligible to participate in the 4 30 prescription card program if the individual is eligible for 4 31 assistance under the medical assistance program or is covered 4 32 by an insurance policy that provides benefits for prescription 4 33 drugs equal to or greater than the benefits provided under the 4 34 prescription card program, as specified by rules adopted by 4 35 the director. 5 1 d. The department shall establish simple procedures for 5 2 enrolling prescription card program participants and shall 5 3 undertake outreach efforts to build public awareness of the 5 4 program and maximize enrollment by eligible residents. 5 5 e. (1) The department shall adopt rules requiring 5 6 disclosure by participating retail pharmacies to prescription 5 7 card program participants of the amount of savings provided as 5 8 a result of the prescription card program. The rules shall 5 9 include provisions to protect information that is proprietary 5 10 in nature. 5 11 (2) A participating retail pharmacy shall verify to the 5 12 department the amounts charged to prescription card program 5 13 participants and nonparticipants, and shall provide the 5 14 department with utilization data necessary to calculate 5 15 rebates from manufacturers and labelers. The department shall 5 16 protect the confidentiality of all information subject to 5 17 confidentiality protection under state or federal law, rule, 5 18 or regulation. The department shall not impose transaction 5 19 charges on wholesalers or participating retail pharmacies that 5 20 submit claims or receive payments under the program. 5 21 (3) Wholesalers and participating retail pharmacies shall 5 22 be paid in advance for prescription card discounts or shall be 5 23 reimbursed by the department on a biweekly basis. 5 24 f. The department may require a wholesaler or 5 25 participating retail pharmacy to segregate drugs under the 5 26 prescription card program from other drug inventory. The 5 27 department may require a wholesaler or participating retail 5 28 pharmacy to maintain records of acquisition and disposition of 5 29 drugs under the prescription card program separately from the 5 30 wholesaler's or pharmacy's other records. 5 31 g. Disputes or discrepancies in rebate amounts shall be 5 32 resolved using the following process: 5 33 (1) If there is a discrepancy in the manufacturer's or 5 34 labeler's favor between the amount claimed by a pharmacy and 5 35 the amount rebated by the manufacturer or labeler, the 6 1 department, at the department's expense, may hire a mutually 6 2 agreed upon independent auditor. If a discrepancy still 6 3 exists following the audit, the manufacturer or labeler shall 6 4 justify the reason for the discrepancy or make payment to the 6 5 department for any additional amount due. 6 6 (2) If there is a discrepancy against the interest of the 6 7 manufacturer or labeler in the information provided by the 6 8 department to the manufacturer or labeler regarding the 6 9 manufacturer's or labeler's rebate, the manufacturer or 6 10 labeler, at the manufacturer's or labeler's expense, may hire 6 11 a mutually agreed upon independent auditor to verify the 6 12 accuracy of the data supplied to the department. If a 6 13 discrepancy still exists following the audit, the department 6 14 shall justify the reason for the discrepancy or provide a 6 15 refund to the manufacturer or labeler. 6 16 (3) Following the procedures established in subparagraph 6 17 (1) or (2), either the department or the manufacturer or 6 18 labeler may request a hearing. Supporting documentation shall 6 19 accompany the request for a hearing. 6 20 h. Discounts to participants in the prescription card 6 21 program shall begin no later than January 1, 2008. 6 22 5. ADMINISTRATION. 6 23 a. The department shall report the enrollment and 6 24 financial status of the prescription card program and report 6 25 savings from any supplemental medical assistance program 6 26 rebates and any other discounts or rebates to the general 6 27 assembly by February 1, annually. 6 28 b. If the director determines that it is beneficial to 6 29 both the prescription card program and another state program 6 30 to combine drug pricing negotiations to maximize discount 6 31 pricing and drug rebates, the director shall work with the 6 32 other state program to do so. 6 33 c. The department shall adopt rules to implement this 6 34 section. 6 35 d. The department shall seek any waivers of federal law, 7 1 rule, or regulation necessary to implement the provisions of 7 2 this section. 7 3 e. The department shall administer this section in a 7 4 manner that benefits the greatest number of residents while 7 5 remaining in compliance with federal law and regulations. If 7 6 necessary, the director may separate medical assistance 7 7 program negotiations from nonmedical assistance program 7 8 negotiations and preferred drug list decisions, or may limit 7 9 participation in the prescription card program to reduce the 7 10 number of participants. 7 11 EXPLANATION 7 12 This bill directs the director of human services, in 7 13 addition to negotiating rebates with drug manufacturers 7 14 pursuant to the Medicaid preferred drug list program, to 7 15 negotiate other discount prices or rebates for prescription 7 16 drugs from drug manufacturers and labelers for the 7 17 prescription card program and other state programs that pay 7 18 for or acquire prescription drugs. 7 19 The bill provides that the director is to determine whether 7 20 to include the products of labelers and manufacturers in the 7 21 formularies or prior authorization programs for any state 7 22 program that pays for or acquires prescription drugs, taking 7 23 into consideration: (a) if the director and a drug 7 24 manufacturer or labeler fail to reach agreement on the terms 7 25 of a supplemental rebate under the medical assistance program 7 26 or a discount or rebate for the prescription card program; or 7 27 (b) whether the discounts or rebates offered by the 7 28 manufacturer or labeler are not as favorable to the state as 7 29 the prices provided to eligible entities under 42 U.S.C. } 7 30 256b. The bill also provides that the names of manufacturers 7 31 and labelers that do not enter into discount pricing or rebate 7 32 agreements are public information and the department of human 7 33 services is to release this information to the public and 7 34 actively distribute the information to doctors, pharmacists, 7 35 and other health professionals. 8 1 The bill establishes the prescription card program as a 8 2 state pharmaceutical assistance program to provide discounts 8 3 to participants for drugs covered by a rebate agreement. 8 4 Using funds from negotiated rebates, the department is 8 5 directed to contract with wholesalers and participating retail 8 6 pharmacies to deliver discounted prices to prescription card 8 7 participants. An individual is eligible to participate in the 8 8 prescription card program if the individual is a resident of 8 9 Iowa and has a net family income below 350 percent of the 8 10 federal poverty level. An individual is ineligible to 8 11 participate in the prescription card program if the individual 8 12 is eligible for assistance under the medical assistance 8 13 program or is covered by an insurance policy that provides 8 14 benefits for prescription drugs equal to or greater than the 8 15 benefits provided under the prescription card program. The 8 16 bill directs the department to establish simple procedures for 8 17 enrolling prescription card program participants and to 8 18 undertake outreach efforts to build public awareness of the 8 19 program and maximize enrollment by eligible residents. The 8 20 bill directs the department to adopt rules requiring 8 21 disclosure by participating retail pharmacies to prescription 8 22 card program participants of the amount of savings provided as 8 23 a result of the prescription card program. The rules are to 8 24 include provisions to protect information that is proprietary 8 25 in nature. The bill specifies requirements for participating 8 26 retail pharmacies and wholesalers, provides for payment of 8 27 wholesalers and participating retail pharmacies, and provides 8 28 a process for addressing discrepancies or disputes in rebate 8 29 amounts. The bill provides that discounts to participants in 8 30 the prescription card program are to begin no later than 8 31 January 1, 2008. 8 32 The bill directs the department to report the enrollment 8 33 and financial status of the prescription card program and 8 34 report savings from any supplemental medical assistance 8 35 program rebates and any other discounts or rebates to the 9 1 general assembly by February 1, annually; provides that if the 9 2 director determines that it is beneficial to both the 9 3 prescription card program and another state program to combine 9 4 drug pricing negotiations to maximize discount pricing and 9 5 drug rebates, the director shall work with the other state 9 6 program to do so; directs the department to adopt rules to 9 7 implement the provisions of the bill; directs the department 9 8 to seek any waivers of federal law, rule, or regulation 9 9 necessary to implement the provisions of the bill; directs the 9 10 department to administer the bill in a manner that benefits 9 11 the greatest number of residents while remaining in compliance 9 12 with federal law and regulation; and provides that if 9 13 necessary the director may separate medical assistance program 9 14 negotiations from nonmedical assistance program negotiations 9 15 and preferred drug list decisions, or may limit participation 9 16 in the prescription card program to reduce the number of 9 17 participants. 9 18 LSB 2035HH 82 9 19 pf:nh/cf/24
Text: HF203            Text: HF205 Complete Bill History