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91_HB3036ham001
LRB9110165SMdvam02
1 AMENDMENT TO HOUSE BILL 3036
2 AMENDMENT NO. . Amend House Bill 3036 by replacing
3 everything after the enacting clause with the following:
4 "Section 1. Short title. This Act may be cited as the
5 Senior Citizen Prescription Drug Discount Program Act.
6 Section 5. Findings. The General Assembly finds that:
7 (a) Although senior citizens represent 12% of the
8 population, they use on average 32% of prescription drugs
9 that are dispensed.
10 (b) Senior citizens in the United States without
11 prescription drug insurance coverage pay the highest prices
12 in the world for needed medications.
13 (c) High prescription drug prices force many Illinois
14 seniors to go without proper medication or other necessities,
15 thereby affecting their health and safety.
16 (d) Prescription drug prices in the United States are
17 the world's highest, averaging 32% higher than in Canada and
18 60% higher than in Great Britain.
19 (e) Prescription drug prices listed on the Federal
20 Supply Schedule that serve the Veterans Administration, the
21 Department of Defense, and the Coast Guard average 52% below
22 the non-federal average manufacturer's price.
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1 (f) Regardless of household income, seniors without
2 prescription drug coverage are one serious illness away from
3 poverty.
4 (g) Reducing the price of prescription drugs would
5 benefit the health and well-being of all Illinois senior
6 citizens by providing more affordable access to needed drugs.
7 (h) Drug prices on the Federal Supply Schedule are
8 negotiated by the Department of Veterans Affairs and are the
9 best publicly available indicator of the prices that drug
10 companies charge their favored customers.
11 Section 10. Purpose. The purpose of this Program is to
12 require the Department of Revenue to establish and administer
13 a program the will enable eligible senior citizens to
14 purchase prescription drugs at discounted prices.
15 Section 15. Definitions. As used in this Act:
16 "Authorized pharmacy" means any pharmacy registered in
17 this State under the Pharmacy Practice Act of 1987 and
18 approved by the Department.
19 "Department" means the Illinois Department of Revenue.
20 "Director" means the Director of Revenue.
21 "Drug manufacturer" means any entity located within or
22 outside Illinois that is engaged in (i) the production,
23 preparation, propagation, compounding, conversion, or
24 processing of prescription drug products covered under the
25 Program, either directly or indirectly by extraction from
26 substances of natural origin, independently by means of
27 chemical synthesis, or by a combination of extraction and
28 chemical synthesis or (ii) the packaging, repackaging,
29 leveling, labeling, or distribution of prescription drug
30 products covered under the Program. "Drug manufacturer",
31 however, does not include a wholesale distributor of drugs or
32 a retail pharmacy licensed under Illinois law.
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1 "Eligible senior" means a person who is (i) a resident of
2 Illinois and (ii) 65 years of age or older.
3 "Federal Supply Schedule" or "FSS" means a price
4 catalogue containing goods available for purchase by federal
5 agencies. Drug prices on the FSS are negotiated by the
6 (U.S.) Department of Veterans' Affairs and are the best
7 publicly available indicator of prices drug companies charge
8 favored customers.
9 "Prescription drug" means any prescribed drug that may be
10 legally dispensed by an authorized pharmacy.
11 "Program" means the Senior Citizen Prescription Drug
12 Discount Program created under this Act.
13 "Rules" includes rules promulgated and forms prescribed
14 by the Department.
15 Section 20. The Senior Citizen Prescription Drug Discount
16 Program. The Senior Citizen Prescription Drug Discount
17 Program is established to protect the health and safety of
18 senior citizens. The Program shall be administered by the
19 Department. The Department shall (i) enroll eligible seniors
20 into the Program to qualify them for a discount on the
21 purchase of prescription drugs at an authorized pharmacy,
22 (ii) enter into rebate agreements with drug manufacturers,
23 and (iii) reimburse pharmacies for the cost of providing
24 discounts using the proceeds from the manufacturer rebate
25 agreements.
26 Section 25. Prescription drug prices.
27 (a) Prescription drug prices for eligible seniors at
28 authorized pharmacies may not exceed prices listed on the
29 Federal Supply Schedule plus a dispensing fee calculated
30 consistent with the Senior Citizens and Disabled Persons
31 Property Tax Relief and Pharmaceutical Assistance Act.
32 Nothing in this Act precludes any authorized pharmacy from
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1 charging less than the listed price on the Federal Supply
2 Schedule.
3 (b) In addition to the dispensing fee paid by the
4 eligible senior, authorized pharmacies are entitled to
5 compensation equal to the Average Wholesale Price (AWP) minus
6 10% for prescription drugs covered under this Act. Subject
7 to the requirements of the State Prompt Payment Act, the
8 Department shall compensate authorized pharmacies for the
9 amount above the Federal Supply Schedule price charged to a
10 participant in the Program up to the AWP minus 10% for
11 prescription drugs dispensed under the Program. The
12 Department may adjust the amount of compensation to
13 authorized pharmacies based upon the availability of funds in
14 the Senior Citizen Prescription Drug Discount Program Fund.
15 For the purpose of this Act, AWP shall be determined from the
16 latest publication of the Blue Book, a universally subscribed
17 pharmacist reference guide annually published by the Hearst
18 Corporation. AWP may also be derived electronically from the
19 drug pricing database synonymous with the latest publication
20 of the Blue Book and furnished in the National Drug Data File
21 (NDDF) by First Data Bank (FDB), a service of the Hearst
22 Corporation.
23 Section 30. Manufacturer rebate agreements.
24 (a) Each drug manufacturer that distributes a
25 prescription drug for sale in Illinois shall enter into a
26 rebate agreement with the Department under this Program for
27 all prescription drugs offered by the manufacturer for sale
28 in Illinois equal to the cost to the Department for
29 reimbursing authorized pharmacies under this Act pursuant to
30 subsection (b) of Section 25. The rebate agreement shall
31 become effective the first day of the calendar quarter that
32 begins 60 days after the date the agreement is entered into.
33 (b) The Department shall develop a model rebate
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1 agreement for prescription drugs dispensed on and after the
2 effective date of this Act.
3 (c) Rebate payment procedures. All rebates negotiated
4 under agreements described in this Section shall be paid to
5 the Department in accordance with procedures prescribed by
6 the Department. All rebates must be remitted to the
7 Department not later than 30 days after receipt of a request
8 for payment by the Department.
9 (d) The receipts from the rebates shall be deposited
10 into the Senior Citizen Prescription Drug Discount Program
11 Fund, a special fund in the State treasury, and shall be
12 used, subject to appropriation, to cover the cost of
13 reimbursing authorized pharmacies under this Act pursuant to
14 subsection (b) of Section 25.
15 Section 35. Program eligibility.
16 (a) Any person may apply to the Department for
17 participation in the Program in the form and manner required
18 by the Department. The Department shall determine the
19 eligibility of each applicant for the Program within 30 days
20 after the date of application. To participate in the Program
21 an eligible senior whose application has been approved by the
22 Department must pay $25 upon enrollment and annually
23 thereafter and shall receive a Program identification card.
24 The Department shall deposit the enrollment fees collected
25 into the Senior Citizen Prescription Drug Discount Program
26 Fund. The monies collected by the Department for enrollment
27 fees and deposited into the Senior Citizen Prescription Drug
28 Discount Program Fund must be separately accounted for by the
29 Department. The Program identification card is proof of
30 eligibility for benefits under this Act. If 2 or more
31 persons are eligible for any benefit under this Act and are
32 members of the same household, each participating household
33 member shall apply to the Department and pay the fee required
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1 for the purpose of obtaining an identification card.
2 (b) Proceeds from annual fees, subject to appropriation,
3 shall be used by the Department to offset the administrative
4 cost of this Act. If annual fees exceed the administrative
5 cost of this Act, the Department, subject to appropriation,
6 shall use the excess to lower the professional dispensing fee
7 per prescription paid under the Program.
8 (c) Any person who is eligible for pharmaceutical
9 assistance under the Senior Citizens and Disabled Persons
10 Property Tax Relief and Pharmaceutical Assistance Act is
11 presumed to be eligible for this Program. That person may
12 purchase prescription drugs under this Program that are not
13 covered by the pharmaceutical assistance program under the
14 Senior Citizens and Disabled Persons Property Tax Relief and
15 Pharmaceutical Assistance Act by using the identification
16 card issued under the pharmaceutical assistance program.
17 Section 40. Eligible pharmacies.
18 (a) Each pharmacy licensed under the Pharmacy Practice
19 Act of 1987 may participate as an authorized pharmacy unless
20 it has been removed from that status by the Department for
21 cause, as defined by the Department by rule. Any pharmacy
22 that has been removed as an authorized pharmacy by the
23 Department may apply for reinstatement as an authorized
24 pharmacy in accordance with standards and procedures
25 established by the Department by rule.
26 (b) The Department shall annually review the eligibility
27 of pharmacies to participate in the Program.
28 (c) The Department shall establish procedures for
29 properly contracting for pharmacy services, validating
30 reimbursement claims, validating compliance of dispensing
31 pharmacists with the contracts for participation required
32 under this Act, and otherwise providing for the effective
33 administration of this Act. The Director may enter into a
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1 written contract with any other State agency,
2 instrumentality, or political subdivision or with a fiscal
3 intermediary for the purpose of making payments to authorized
4 pharmacies pursuant to subsection (b) of Section 25 and
5 coordinating the Program with other programs that provide
6 payments for prescription drugs covered under the Program.
7 Section 45. The Department shall promulgate rules to
8 implement and administer the Program, which shall include the
9 following:
10 (1) Execution of contracts with pharmacies to
11 dispense prescription drugs covered under the Program.
12 The contracts shall stipulate terms and conditions for
13 the participation of authorized pharmacies and the rights
14 of the State to terminate participation for breach of the
15 contract or for violation of this Act or rules
16 promulgated by the Department under this Act.
17 (2) Establishment of maximum limits on the size of
18 prescriptions, new or refilled, which shall be in amounts
19 sufficient for 90 days, except as otherwise specified by
20 rule for medical or utilization control reasons.
21 (3) Establishment of liens upon any and all causes
22 of action that accrue to a beneficiary as a result of
23 injuries for which prescription drugs covered under the
24 Program are directly or indirectly required and for which
25 the Director made payment or became liable for under this
26 Act.
27 (4) Inspection of appropriate records and audits of
28 participating authorized pharmacies to ensure contract
29 compliance and to determine any fraudulent transactions
30 or practices under this Act.
31 Section 50. Report on administration of Program. The
32 Department shall report to the Governor and the General
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1 Assembly by March 1st of each year on the administration of
2 the Program under this Act.
3 Section 990. The State Finance Act is amended by adding
4 Section 5.541 as follows:
5 (30 ILCS 105/5.541 new)
6 Sec. 5.541. The Senior Citizen Prescription Drug
7 Discount Program Fund.
8 Section 999. Effective date. This Act takes effect July
9 1, 2000.