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H.614
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H.614
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Introduced by Representative Koch of Barre Town
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Referred to Committee on
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Date:
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Subject: Human services; medical assistance; pharmacy best practices and cost
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control
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Statement of purpose: This bill proposes to codify the pharmacy best practices
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and cost control program enacted in the 2001 session of the general assembly,
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and to authorize additional prescription drug cost containment strategies.
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AN ACT RELATING TO PRESCRIPTION DRUG COST
CONTAINMENT
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It is hereby enacted by the General Assembly of the State of Vermont:
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Sec. 1. 33 V.S.A. § 1997 is added to read:
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§ 1997. PRESCRIPTION DRUG COST CONTAINMENT
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(a)(1) The commissioner of prevention, assistance, transition, and health
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access shall establish a pharmacy best practices and cost control program
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designed to reduce the cost of providing prescription drugs, while maintaining
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high quality in prescription drug therapies. The program shall include a
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preferred list of covered prescription drugs that identifies preferred choices
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within therapeutic classes for particular diseases and conditions, including
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generic alternatives, utilization review procedures, including a prior
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authorization review process, and any other cost containment activity adopted,
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by rule, by the commissioner designed to reduce the cost of providing
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prescription drugs while maintaining high quality in prescription drug
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therapies.
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(2) The commissioner may implement all or a portion of this program
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through a contract with a third party with expertise in the management of
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pharmacy benefits.
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(3) The commissioner shall implement the program for Medicaid and
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VScript. The commissioner, the commissioner of banking, insurance,
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securities, and health care administration and the secretary of administration
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shall take all steps necessary to implement the program for any other public or
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private health benefit plan within or outside this state that agrees to participate
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in the program. The commissioner shall enroll in the program individuals
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without adequate public or private coverage for prescription drugs.
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(4) For HIV and AIDS-related medications used by individuals with
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HIV or AIDS, the preferred drug list and any utilization review procedures
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shall not be more restrictive than the drug list and the application of the list
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used for the state of Vermont AIDS medication assistance program.
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(b)(1) The department shall provide information on how beneficiaries
enrolled in a pharmacy benefit plan participating in the pharmacy best
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practices and cost control program authorized in subsection (a) of this section
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can obtain a copy of the preferred drug list, whether any change has been made
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to the preferred drug list since it was last issued, and the process by which
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exceptions to the preferred list may be made.
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(2) The pharmacy best practices and cost control program shall
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authorize pharmacy benefit coverage when a patient’s health care provider
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prescribes a prescription drug not on the preferred drug list, or a prescription
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drug which is not the list’s preferred choice:
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(A) under the same terms as coverage for preferred choice drugs if:
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(i) the preferred choice has not been effective, or with reasonable
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certainty is not expected to be effective, in treating the patient’s condition; or
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(ii) the preferred choice causes or is reasonably expected to cause
adverse or harmful reactions in the patient; or
(B) if the patient agrees to pay any additional cost in excess of the
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benefits provided by the patient’s health benefit plan if allowed under the legal
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requirements applicable to the plan, otherwise to pay the full cost for the
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higher-priced drug.
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(3)(A) In connection with the pharmacy best practices and cost control
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program, the commissioner of prevention, assistance, transition, and health
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access shall report for review by the health access oversight committee, prior
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to initial implementation, and prior to any subsequent modifications:
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(i) the compilation that constitutes the preferred drug list or list of
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drugs subject to prior authorization or any other utilization review procedures;
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(ii) any utilization review procedures, including any prior
authorization procedures; and
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(iii) the procedures by which drugs will be identified as preferred
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on the preferred drug list, and the procedures by which drugs will be selected
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for prior authorization or any other utilization review procedure.
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(B) The health access oversight committee shall closely monitor
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implementation of the preferred drug list and utilization review procedures to
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ensure that the consumer protection standards enacted pursuant to subdivision
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(2) of this subsection are not diminished as a result of implementing the
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preferred drug list and the utilization review procedures, including any
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unnecessary delay in access to appropriate medications. The committee shall
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ensure that all affected interests, including consumers, health care providers,
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pharmacists and others with pharmaceutical expertise have an opportunity to
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comment on the preferred drug list and procedures reviewed under this
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subdivision (3).
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(4) The commissioner of prevention, assistance, transition, and health
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access shall report quarterly to the health access oversight committee
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concerning the following aspects of the pharmacy best practices and cost
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control program:
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(A) the efforts undertaken to educate health care providers about the
preferred drug list and the program’s utilization review procedures;
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(B) the number of prior authorization requests made, the number of
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requests denied, the number of denial appeals and the result of such appeals;
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and
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(C) the number of utilization review events (other than prior
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authorization requests), the number of such cases in which coverage of a drug
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is denied, the number of denial appeals and the results of such appeals.
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(5) On or before January 1, 2003, and on or before January 1 of each
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year for the duration of the pharmacy benefit manager contract, the
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commissioner of prevention, assistance, transition, and health access shall
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report to the house and senate committees on health and welfare, and to the
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health access oversight committee concerning implementation of any
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pharmacy benefit manager contract entered into by the pharmacy best practices
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and cost control program. The report shall include:
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(A) a description of the activities of the pharmacy benefit manager;
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(B) an analysis of the success of the pharmacy benefit manager in
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achieving each of the department’s public policy goals, together with the
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pharmacy benefit manager’s report of its activities and achievements;
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(C) an assessment of Medicaid and VScript program administrative
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costs relating to prescription drug benefits, including any recommendations for
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increasing the administrative efficiency of such programs;
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(D) a fiscal report on the state fiscal costs and savings to Vermont of
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the pharmacy benefit manager contract, including an accounting of any
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payments, fees, offsets, savings and other financial transactions or accountings;
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(E) any recommendations for enhancing the benefits of the pharmacy
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benefit manager contract, and an identification of, and any recommendations
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for minimizing any problems with the contract; and
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(F) if the department has not entered into a contract with a pharmacy
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benefit manager, or if any such contract has been rescinded, any
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recommendations for pursuing Vermont’s public policy goals relating to
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pharmaceutical costs, quality and access through other means.
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(6)(A) The fiscal report required by subdivision (5)(D) of this
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subsection shall include the disclosure, in a manner that preserves the
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confidentiality of any proprietary information as determined by the
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commissioner, of:
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(i) any agreements entered into by the pharmacy benefit manager
identified in subsection (d) of this section; and
(ii) the financial impact of such agreements on Vermont, and on
Vermont beneficiaries.
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(B) The commissioner shall not enter into a contract with a pharmacy
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benefit manager unless the pharmacy benefit manager has agreed to disclose to
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the commissioner the terms and the financial impact on Vermont and on
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Vermont beneficiaries of:
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(i) any agreement with a pharmaceutical manufacturer to favor the
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manufacturer’s products over a competitor’s products, or to place the
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manufacturer’s drug on the pharmacy benefit manager’s preferred list or
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formulary, or to switch the drug prescribed by the patient’s health care
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provider with a drug agreed to by the pharmacy benefit manager and the
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manufacturer;
(ii) any agreement with a pharmaceutical manufacturer to share
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manufacturer rebates and discounts with the pharmacy benefit manager, or to
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pay “soft money” or other economic benefits to the pharmacy benefit manager;
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(iii) any agreement or practice to bill Vermont health benefit plans
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for prescription drugs at a cost higher than the pharmacy benefit manager pays
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the pharmacy;
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(iv) any agreement to share revenue with a mail order or internet
pharmacy company;
(v) any agreement to sell prescription drug data concerning
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Vermont beneficiaries, or data concerning the prescribing practices of the
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health care providers of Vermont beneficiaries; or
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(vi) any other agreement of the pharmacy benefit manager with a
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pharmaceutical manufacturer, or with wholesale and retail pharmacies
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affecting the cost of pharmacy benefits provided to Vermont beneficiaries.
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(C) The commissioner shall not enter into a contract with a pharmacy
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benefit manager which has entered into an agreement or engaged in a practice
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described in subdivision (6)(B) unless the commissioner determines, and
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certifies in the fiscal report required by subdivision (5)(D) of this subsection,
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that such agreement or practice furthers the financial interests of Vermont, and
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does not adversely affect the medical interests of Vermont beneficiaries.
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(c) The commissioner of prevention, assistance, transition, and health
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access shall develop procedures for the coordination of VScript and Medicaid
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benefits with pharmaceutical manufacturer patient assistance programs
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offering free or low cost prescription drugs, including the development of a
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proposed single application form for such programs. The commissioner may
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contract with a nongovernmental organization to develop the single application
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form.
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(d) The pharmacy best practices and cost control program shall establish
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procedures for the timely review of prescription drugs newly approved by the
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federal Food and Drug Administration, including procedures for the review of
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newly-approved prescription drugs in emergency circumstances.
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(e) The commissioner, the commissioner of banking, insurance,
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securities, and health care administration, and the commissioner of
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personnel shall:
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(1) seek changes in public and private health insurance regulations
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and practices that would allow uniform monthly prescription refill
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anniversaries for individuals and families who have multiple prescriptions;
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(2) seek changes in health insurance regulations and practices that
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would allow people to buy larger supplies of drugs and refill prescriptions
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less often. In no case should the refill limit be lower for a Vermont retail
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pharmacy than it is for a mail-order pharmacy;
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(3) implement a program to provide free samples of generic drugs to
physician practices for distribution to uninsured patients; and
(4) seek to have public and private insurers increase the copayments for
nongeneric drugs in an amount equal to the difference in price.
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