Revision: Jan. 1, 2008, midnight
HB 628-FN-A – AS AMENDED BY THE HOUSE
06Mar2007… 0294h
2007 SESSION
01/09
HOUSE BILL 628-FN-A
AN ACT establishing the New Hampshire Rx advantage program and continually appropriating a special fund.
SPONSORS: Rep. DeJoie, Merr 11; Rep. Bergin, Hills 6; Rep. Rosenwald, Hills 22; Rep. S. Merrick, Coos 2; Sen. Foster, Dist 13; Sen. Hassan, Dist 23; Sen. DeVries, Dist 18
COMMITTEE: Health, Human Services and Elderly Affairs
This bill establishes the New Hampshire Rx advantage program for prescription drugs. Under this bill, participating pharmacies shall sell prescription drugs to qualified residents at a discounted price. The bill grants rulemaking authority to the New Hampshire pharmacy board and the commissioner of the department of health and human services for the purposes of the bill.
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Explanation: Matter added to current law appears in bold italics.
Matter removed from current law appears [in brackets and struckthrough.]
Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
06Mar2007… 0294h
07-0580
01/09
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Seven
AN ACT establishing the New Hampshire Rx advantage program and continually appropriating a special fund.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 Statement of Purpose. The general court finds that affordability is critical in providing access to prescription drugs for New Hampshire residents. Therefore, the general court hereby establishes the New Hampshire Rx advantage program for qualified New Hampshire residents, thereby increasing the overall health of New Hampshire residents, promoting healthy communities, and protecting the public health and welfare. It is the intent of this act to integrate the New Hampshire Rx advantage program as part of any statewide program for the uninsured and to have consumers self-qualify for the program. It is not the intent of this act to discourage employers from offering or paying for prescription drug benefits for their employees or to replace employer-sponsored prescription drug benefit plans that provide benefits comparable to those made available to qualified New Hampshire residents under this act. The New Hampshire Rx advantage program is also not intended to address past cuts in dispensing fees.
2 New Chapter; New Hampshire Rx Advantage Program. Amend RSA by inserting after chapter 161-K the following new chapter:
CHAPTER 161-L
NEW HAMPSHIRE RX ADVANTAGE PROGRAM
161-L:1 Definitions. In this chapter:
I. “Commissioner” means the commissioner of the department of health and human services.
II. “Covered drugs” means drugs that are on the New Hampshire preferred drug list.
III. “Department” means the department of health and human services.
IV. “Fund” means the New Hampshire Rx advantage program fund, established in RSA 161-L:5.
V. “Initial discounted price” for a drug means the price which has been discounted from a pharmacy’s usual and customary charge that participating retail pharmacies may charge qualified residents participating in the program for that drug.
VI. “Labeler” means an entity or person that receives prescription drugs from a manufacturer or wholesaler and repackages those drugs for later retail sale and that has a labeler code from the federal Food and Drug Administration under 21 C.F.R. section 207.20.
VII. “Participating retail pharmacy” or “retail pharmacy” means a retail pharmacy located in this state, or another business licensed to dispense prescription drugs in this state, that participates in the program.
VIII. “Program” means the New Hampshire Rx advantage program established under this chapter.
IX. “Qualified resident” means a resident of this state who has a family income equal to or less than 350 percent of the federal poverty level and who self-qualifies as an enrollee in the program. “Qualified resident” also means a resident of this state whose family incurs unreimbursed expenses for prescription drugs that equal 5 percent or more of family income or whose total unreimbursed medical expenses equal 15 percent or more of family income. For purposes of this definition, the cost of drugs provided under this chapter shall be considered an expense incurred by the family for eligibility determination purposes.
X. “Secondary discounted price” means the initial discounted price minus any further discounts paid for out of the fund.
XI. “Usual and customary charge” means the charge a pharmacy charges a customer for a prescription drug.
161-L:2 New Hampshire Rx Advantage Program Established. The department shall establish the New Hampshire Rx advantage program. The department may coordinate this program with other programs and may take actions to enhance efficiency, reduce the cost of prescription drugs, and maximize the benefits to the programs and enrollees, including providing the benefits of this program to enrollees in other programs. The components of the program shall be as follows:
I. A drug manufacturer or labeler that sells prescription drugs in this state through any other publicly-supported pharmaceutical assistance program may enter into a rebate agreement with the department for this program. The rebate agreement shall require the manufacturer or labeler to make rebate payments to the state each calendar quarter or according to a schedule established by the department.
II. The commissioner shall negotiate the amount of the rebate required from a manufacturer or labeler in accordance with this paragraph.
(a) The commissioner shall take into consideration the rebate calculated under the Medicaid Rebate Program pursuant to 42 U.S.C. section 1396r-8, the average wholesale price of prescription drugs, and any other information on prescription drug prices and price discounts.
(b) The commissioner shall use the commissioner’s best efforts to obtain an initial rebate amount equal to or greater than the rebate calculated under rebates pursuant to 42 U.S.C. section 1396r-8.
(c) With respect to the rebate taking effect no later than October 1, 2008, the commissioner shall use the commissioner’s best efforts to obtain an amount equal to or greater than the amount of any discount, rebate, or price reduction for prescription drugs provided to the federal government.
III. Each participating retail pharmacy shall sell covered drugs to qualified residents at the lower of the initial discounted price and the secondary discounted price as such prices are determined by the department pursuant to this chapter.
(a) The department shall establish discounted prices for drugs covered by a rebate agreement and shall promote the use of efficacious and reduced-cost drugs, taking into consideration reduced prices for state and federally-capped drug programs, differential dispensing fees, administrative overhead, and incentive payments.
(b) Beginning October 1, 2007, a participating retail pharmacy shall offer the initial discounted price.
(c) No later than October 1, 2008, a participating retail pharmacy shall offer the secondary discounted price if available.
161-L:3 Retail Pharmacies; Rules; Operation of Program.
I. The New Hampshire pharmacy board, established in RSA 318, shall adopt rules, pursuant to RSA 541-A, requiring disclosure by participating retail pharmacies to qualified residents relative to the amount of savings provided as a result of the program. The rules shall include protection of any information that is proprietary in nature.
II. The department shall not impose transaction charges under this program on retail pharmacies that submit claims or receive payments under the program.
III. A participating retail pharmacy shall submit claims to the department to verify the amount charged to qualified residents.
IV. On a weekly or biweekly basis, the department shall reimburse a participating retail pharmacy for the difference between the initial discounted price and the secondary discounted price provided to qualified residents under the program.
V. The department shall conduct ongoing quality assurance activities.
161-L:4 Nonparticipating Manufacturers and Labelers. The names of manufacturers and labelers who do and do not enter into rebate agreements pursuant to this chapter shall be public information. The department shall release such information to health care providers and the public on a regular basis and shall publicize participation by manufacturers and labelers that is of particular benefit to the public. The department shall impose prior authorization requirements in the program, as permitted by law, to the extent the department determines it is appropriate to do so in order to encourage manufacturer and labeler participation in the program and if the additional prior authorization requirements remain consistent with the goals of the program and the requirements of the federal Social Security Act, Title 19.
161-L:5 New Hampshire Rx Advantage Program Fund. There is hereby established in the office of the state treasurer a fund to be known as the New Hampshire Rx advantage program fund. The fund shall receive revenue from manufacturers and labelers who pay rebates as provided in 161-L:2, II and any appropriations or allocations designated for the fund. The purposes of the fund shall be to reimburse retail pharmacies for discounted prices provided to qualified residents; to reimburse the department for contracted services including pharmacy claims processing fees, administrative and associated computer costs, and other reasonable program costs; and to benefit any state sanctioned low cost drug program subsequently established. Moneys in the fund shall be nonlapsing and continually appropriated to the department. Interest on fund balances shall accrue to the fund. Surplus funds in the fund shall be used for the benefit of the program.
161-L:6 Rulemaking. The commissioner shall adopt rules pursuant to RSA 541-A, relative to:
I. Procedures for issuing program enrollment cards.
II. Outreach efforts to build public awareness of the program and to maximize enrollment of eligible residents.
III. Content and format of any forms required under this chapter.
IV. Procedures for entering into rebate agreements with drug manufacturers or labelers.
V. Manner of releasing information to the public under RSA 161-L:4.
161-L:7 Annual Report Required. The commissioner shall make an annual report beginning January 1, 2009 relative to the enrollment and financial status of the program, including any recommendations for legislation, to the speaker of the house of representatives, the president of the senate, and the governor.
3 Generic Drugs. Amend RSA 126-A:3, V to read as follows:
V. Pharmacists shall substitute generically equivalent drug products for all legend and non-legend prescriptions paid for by the department of health and human services, including the medicaid program, unless the prescribing practitioner specifies that the brand name drug product is medically necessary. Such notification shall be in the practitioner’s own handwriting and shall be retained in the pharmacist’s file. [The commissioner may waive the application of RSA 126-A:3, III if the commissioner determines such action is necessary to ensure the availability of prescription and other pharmaceutical services to persons served by the department or to avert serious economic hardship in the provision of prescriptions and other pharmaceutical services. The commissioner shall adopt rules under RSA 541-A relative to a waiver of the application.] The provisions of paragraph IV shall not apply to the dispensing by a pharmacy for medical assistance reimbursement for legend and non-legend drugs. The commissioner, in consultation with pharmacy providers, [may develop a new methodology for] shall establish medical assistance reimbursement for legend and non-legend drugs.
4 New Paragraph; Pharmacy Board; Rulemaking. Amend RSA 318:5-a by inserting after paragraph XVII the following new paragraph:
XVIII. Rules for disclosure and confidentiality relative to the New Hampshire Rx advantage program, pursuant to RSA 161-L:3.
5 New Subparagraph; New Hampshire Rx Advantage Program Fund. Amend RSA 6:12, I by inserting after subparagraph (252) the following new subparagraph:
(253) Moneys deposited in the New Hampshire Rx advantage program fund pursuant to RSA 161-L:5.
6 Effective Date. This act shall take effect 60 days after its passage.
LBAO
07-0580
Amended 04/05/07
HB 628 FISCAL NOTE
AN ACT establishing the New Hampshire Rx advantage program and continually appropriating a special fund.
FISCAL IMPACT
The Department of Health and Human Services states this bill, as amended by the House (Amendment #2007-0294h), will increase state restricted revenue and expenditures by an indeterminable amount in FY 2008 and each year thereafter. This bill will have no fiscal impact on county and local revenue and expenditures.
METHODOLOGY
The Department of Health and Human Services states this bill establishes a state-sponsored discount pharmacy program run by the Department to provide reduced priced prescription drugs to qualified New Hampshire residents. This Department states the bill is based on a similar program in the State of Maine known as the Rx Plus Program. A qualified New Hampshire resident is defined in the bill as a resident of the State who has a family income equal to or less than 350% of the Federal Poverty Limit (FPL), or a resident of the State whose family incurs unreimbursed prescription drug expenses equal to or greater than 5% of total family income. This bill would require the Department to adopt rules for determining eligibility for benefits under the program and for other administrative tasks including, issuing enrollment cards, outreach efforts to build public awareness, content and format of forms, and procedures for entering into rebate agreements with drug manufacturers and labelers. This bill indicates that consumers will self-qualify for the program. This bill establishes the New Hampshire Rx Advantage Program fund which will receive revenue from manufacturers and labelers who pay rebates, and contain any appropriations or allocations designated for the fund. The fund will reimburse retail pharmacies for discounted prices provided to qualified residents; reimburse the department for contracted services including pharmacy claims processing fees, administrative and associated computer costs, and other reasonable program costs; and be used to benefit any state sanctioned low cost drug program subsequently established. Moneys in the fund will be nonlapsing and continually appropriated to the department. The program would be mandatory for all drug manufacturers or labelers that sell prescription drugs in the state through any other publicly supported pharmaceutical assistance program. Those manufacturers and labelers would be required to enter into rebate agreements with the Department for the purposes of the program. Those manufactures or labelers who did not enter into agreements with the Department would have their names placed on a list, which would be made available to the public by the Department annually. Additionally, those manufacturers and labelers not entering into agreements with the Department would be subject to prior authorization requirements in the Medicaid program as permitted by law in order to encourage their participation in the program. The bill requires the Department to negotiate rebates with drug manufacturers in order to get the best price available for qualified residents. The Department must take into consideration the rebate calculated under the federal Medicaid Rebate Program, the average wholesale price of prescription drugs, and any other information necessary to achieve the best price. The Department must use “best efforts” to obtain initial rebates equal to or greater than rebates obtained under the 1990 Omnibus Budget and Reconciliation Act (OBRA). The administrative costs to begin the program and make it self-sustaining are subject to a wide range of variables. The Department estimates the number of potential uninsured at 134,000. Assuming program enrollment of 67,000 in FY 2008, 100,500 in FY 2009, 113,900 in FY 2010, and 120,600 in FY 2011, and an average of 3.5 prescriptions per month per member, the Department estimates the fiscal impact as follows:
FY 2008 FY 2009 FY 2010 FY 2011
Preliminary Rebates $7,905,933 $36,525,410 $54,099,351 $64,956,107
Secondary Rebates $0 $3,201,903 $13,524,838 $16,239,027
TOTAL REVENUE $7,905,933 $39,727,313 $67,624,189 $81,195,134
Staffing Costs $150,000 $156,000 $162,240 $168,730
Enrollee Cards
& Communication $335,000 $502,500 $569,500 $603,000
Vendor Costs $1,050,000 $0 $0 $0
Prescription Processing
Vendor ($0.56/per Rx) $18,970,862 $28,456,294 $32,250,466 $34,147,552
Subtotal $20,505,862 $29,114,794 $32,982,206 $34,919,282
Reimbursement to
Pharmacies $0 $14,088,373 $17,244,168 $19,719,213
TOTAL COSTS $20,505,862 $43,203,167 $50,226,374 $54,638,495
NET IMPACT ($12,599,929) ($3,475,854) $17,397,815 $26,556,639